Tag Archives: Service credit

Overtime Limits for Tier 5 and 6 Members

The formula used to calculate your NYSLRS pension varies by tier and plan, but your credited service and final average salary (FAS) are the main factors. You earn service credit for paid service with participating employers, and you also may claim it for some previous public service. Your FAS is the average wage you earned during the time period when your earnings were highest (36 consecutive months for Tier 5 and 60 consecutive months for Tier 6).

Your FAS can include overtime pay that you earned during that period. However, for Tier 5 and 6 members, there are limits to how much overtime can be used to calculate your pension.

While you can earn overtime beyond the limit, anything over it will not count toward your FAS or your retirement benefit. Members and employers aren’t required to make contributions on overtime pay that is above the limit, and your employer shouldn’t report it to us.

Tier 5 Overtime Limits

The overtime limit for Tier 5 Employees’ Retirement System (ERS) members increases each calendar year by 3 percent. This year, the limit for Tier 5 ERS members is $19,001.55. For 2019, it will be $19,571.60.

For Tier 5 Police and Fire Retirement System (PFRS) members, the overtime limit is 15 percent of your regular earnings each calendar year.

Tier 5 & 6 Overtime Limits

Tier 6 Overtime Limits

The overtime limit for Tier 6 ERS members increases each calendar year based on the annual increase of the Consumer Price Index (CPI). For 2018, the limit is $16,406.

For Tier 6 PFRS members, the overtime limit is 15 percent of your regular earnings each calendar year.

Find more information about the overtime limit, FAS and retirement calculations in your retirement plan booklet, available on our Publications page.

Learn More

Find more information on our overtime limits pages for Tier 5 and Tier 6. And, find your retirement plan booklet on our Publications page for details about overtime, FAS and retirement calculations.

Creditable Service for Police & Fire Members

The New York State and Local Police and Fire Retirement System (PFRS) provides service and disability retirement benefits, as well as death benefits to more than 35,000 police officers and firefighters.

Most PFRS members are covered by a plan that allows for retirement after 20 or 25 years, regardless of age, without penalty. As a member, you earn credit toward that requirement through paid public employment with participating employers. However, not all public service counts toward your 20 or 25 years.

What Credit Counts Towards Retirement?

The public service that can be used toward your 20 or 25 years is determined by the specific retirement plan under which you’re covered. Check your retirement plan booklet for details.

There are booklets for state police , forest rangers , regional state park police , state university police , EnCon police and members covered under Sections 384, 384-d and 384-e of Retirement and Social Security Law (RSSL). More plan booklets are available on our Publications page.

The most common PFRS plan, which covers nearly 50 percent of PFRS members, was established by Section 384-e of RSSL. With this plan, you earn creditable service:

  • As a firefighter or police officer under the 384-e plan;
  • As a member or officer of the New York State Police; or
  • In the military, as specified by law.

In the 384-e retirement plan, civilian service, as well as service as a sheriff, corrections officer or volunteer firefighter, is not creditable.

creditable service for police and fire retirement system members

Transferring Membership or Purchasing Service Credit — Contact Us First

If you have worked for multiple New York State public employers and are unsure if all of your service is creditable towards your 20 or 25 year plan, contact us before transferring membership or purchasing service credit . Please note: the public service that can be used toward your 20 or 25 years is determined by legislation and differs among plans offered to PFRS members. You should also be sure to request an estimate from us well before your planned date of retirement if there is any question about your creditable service.

Get an Estimate

PFRS members should request an estimate from us as early as 18 months before you plan to retire. It’s the best way to make sure you have all the credit you’re entitled to. Simply fill out and return a Request for Estimate (RS6030) form.

Getting Credit for Your Military Service

If you served in the U.S. Armed Forces, you may be eligible to buy back up to three years of active service credit. Because service credit is a factor in calculating a NYSLRS pension, in most cases buying military service credit will increase your pension.

Military Service Credit

To be eligible, veterans must:

  • Have been honorably discharged;
  • Have at least five years of credited service in the Retirement System;
  • Have not received credit for this service in any other public retirement system in New York State; and
  • Apply for and purchase military service credit before they retire.

How to Apply for Military Service Credit

To apply and request a cost for military service credit:

1. Fax your name, contact information and a copy of your DD-214 to 518-486-6405 or 518-402-7799;

or

2. Mail a letter with your name and contact information, and a photocopy of your DD-214, to:
    Military Service Unit
    110 State Street
    Albany, NY 12244-0001

If after reviewing your application we determine you are eligible, we will send you a letter that will tell you how much credit you are eligible to purchase and the cost. Most members in Tier 1, 2, 3 or 4 can use our online benefit projection calculator to see how the credit would impact your pension. Tier 5 and 6 members can get that information by calling 1-866-805-0990, or using our secure email form (www.emailNYSLRS.com).

For more information, visit the Military Service Credit page on our website.

How Full-Time and Part-Time Service Credit Works

Service credit plays a vital part in your pension calculation and your eligibility for other NYSLRS benefits. As a NYSLRS member, you earn service credit by working for an employer who participates in the Retirement System. All your paid public employment is creditable. You would not, however, earn credit for any period when you are not receiving a salary, such as an unpaid leave of absence. If you work full-time or part-time, you’re earning service credit, just at different rates.

Earning Service Credit When You Work Full-Time

When you work on a full-time, continuous basis throughout your career, we’ll calculate your total service credit from your date of employment up until the date you leave paid employment. Most full-time workers earn a year of service credit for working 260 work days in a year. For a full-time 12-month employee, 260 work days constitutes a full year. For our members who work for school districts, a full-time 10-month academic year can be 180 work days. (If you work in an educational setting, we covered that in an earlier blog post.)

Earning Service Credit When You Work Part-Time

Your service credit is prorated if you work part-time. Part-time employment is credited as the lesser of:

the number of days worked ÷ 260 days

or

your reported annual salary ÷ (the State’s hourly minimum wage × 2,000)

You can think of it like this: let’s say you work 130 days in a year. If a year’s worth of service credit is earned for working 260 days full-time, you’d earn half a year (0.5) of service credit for your part-time work.

Check Your Member Annual Statement

From May to July, we’ll send out this year’s Member Annual Statements. For most members, your statement will show how much service credit you’ve earned over the past fiscal year (April 1, 2017 – March 31, 2018). It will also show your total service credit as of March 31, 2018. Make sure to look it over to see how much service credit you’ve earned over your career.

For more detailed information about service credit, please refer to your specific retirement plan publication.

Dig into the NYSLRS Summer Reading List

Looking for some perfect summer beach reading? Why not check out these page-turners from NYSLRS? They’re light on colorful characters and exotic settings. But, what they lack in plot intrigue, they make up for in important retirement information.

summer reading

1.  Service Credit for Tiers 2 through 6

Service credit is one of the main components that determine your NYSLRS pension. Whether you’re a new member or well into your career, it’s important to understand what it is, its role in your pension calculation and the various types of service for which Tier 2, 3, 4, 5 and 6 members can receive credit. ( Read it now. )

2.  Retirement Plan for ERS Tier 3 and 4 Members (Articles 14 and 15)

Nearly 300,000 Tier 3 and 4 members of the Employee’s Retirement System (ERS) are covered by this plan. The publication explains some of the benefits and the services available to you, including a service retirement, a vested retirement, a disability retirement, death benefits and more. ( Read it now. )

3.  Membership in a Nutshell

NYSLRS membership can be overwhelming when you first join. There’s new terminology: What’s a tier or service credit or a final average salary? There are services like loans and benefit projections as well as new responsibilities like keeping your account information up to date. This guide will help you navigate NYSLRS and your new retirement plan. ( Read it now. )

4.  Retirement Plan for ERS Tier 6 Members (Article 15)

More than 130,000 Tier 6 ERS members are covered by this Plan. The publication explains some of the benefits and the services available to you, including a service retirement, a vested retirement, a disability retirement, death benefits and more. ( Read it now. )

5.  Life Changes: A Guide for Retirees

Already retired? As a NYSLRS retiree, you know that you will receive a monthly retirement benefit for life. However there may be other benefits available to you, as well as services that we provide retirees. This guide will answer many of the questions you may have and explain your responsibilities as a retiree. ( Read it now. )

Not covered by the retirement plans above? Maybe you’re a police officer, a firefighter, a sheriff or a correctional officer. Find your plan as well as publications covering other general topics of interest on our Publications page. They’re great reading any time of year.

Know Your Benefits: Your NYSLRS Pension

Generally, three main components determine your NYSLRS pension: your retirement plan, your final average salary (FAS) and your total service credit.

Your Retirement Plan

NYSLRS retirement plans are established by law. Your plan lays out the formula we’ll use to calculate your pension as well as eligibility requirements. It’s important to read your plan booklet, which you can find on our Publications page.  If you aren’t certain what retirement plan you’re in, check your Member Annual Statement or ask your employer.

NYSLRS Pension Chart

Final Average Salary

Your FAS is the average of your earnings during the set period of time when they were the highest. For ERS and PFRS members in Tiers 1 through 5, that period is three consecutive years; for Tier 6 members, it’s five consecutive years. Some PFRS members may be eligible for a one-year period, if their employer offers it. We will use your FAS, age at retirement, total service credit and the formula from your retirement plan to calculate your NYSLRS pension.

Generally, the earnings we can use for your FAS include regular salary, overtime and recurring longevity payments earned within the period. Some payments you receive won’t count toward your FAS, even when you receive them in the FAS period. The specifics vary by tier, and are listed in your retirement plan booklet.

In most cases, the law also limits how much your pensionable earnings can increase from year to year in the FAS period. Earnings above this cap will not count toward your pension.

Our Your Retirement Benefits publications, (ERS and PFRS), provide the limits for each tier and examples of how we’ll determine your FAS.

Service Credit

Service credit is credit for time spent working for a participating public employer. For most members who work full-time, 260 workdays equals one year of service credit. Members who work part-time or in educational settings can refer to their retirement plan publication for their service credit calculation.

Service credit is a factor in the calculation of your NYSLRS pension. Generally, the more credit you have, the higher your pension will be. Some special plans (usually for police officers, firefighters or correction officers) let you retire at any age once you’ve earned 20 or 25 years of service credit. In other plans, if you retire without enough service credit and don’t meet the age requirements of your retirement plan, your pension will be reduced.

Planning Ahead for Your NYSLRS Pension

As you get closer to retirement age, keep an eye on your service credit and FAS. Make sure we have an accurate record of your public employment history. You can sign in to Retirement Online or check your latest Member Annual Statement to see the total amount of service credit you’ve earned. You may also want to take a look at our budgeting worksheet or try our Benefit Projector Calculator as you plan for your retirement.

If you have questions, or want to find out more information about what makes up your NYSLRS pension, please contact us.

Will Your Retirement Age Affect Your Benefit?

Only you can decide when it’s time to retire, but you should know that your age at retirement can affect your pension benefit. Some New York State and Local Retirement System (NYSLRS) members are in special plans that allow for retirement after a certain number of years, regardless of age (for example, police officers, firefighters, correction officers or sheriffs). But for most members, you can retire with full benefits at the age specified by your plan. Most members can choose to retire as early as age 55, but if you do, you may receive a permanently reduced pension benefit.

Full Retirement Ages

Most retirement plans have an age requirement to retire with full benefits. For Employees’ Retirement System (ERS) members in Tiers 2, 3, 4 and 5 and Police and Fire Retirement System (PFRS) members in Tiers 2, 3, 5 and 6, the full retirement age is 62. For ERS Tier 6 members, it’s 63. PFRS Tier 6 members who have left their PFRS employer are eligible for their benefits at age 63.

Service Credit Exceptions

In some retirement plans, members with a certain amount of service credit can retire at age 55 without being subject to benefit reductions. Benefit reductions don’t apply to ERS Tier 2, 3 or 4 members who have 30 or more years of service credit and Tier 2, 3, 4 and 5 Uniformed Court Officers and Peace Officers employed by the Unified Court System who have 30 or more years of service.

Benefit Reductions

Retirement benefits for all other ERS Tier 5 and Tier 6 members, and PFRS Tier 2, 3, 5 and 6 members not in a special 20- or 25-year plan, will be reduced for early retirement — even if they have 30 years of service credit.

These benefit reductions are prorated by month, so the closer you are to your full retirement age, the less the reduction will be. Once you retire with a reduced benefit, that reduction is permanent.

Here’s a look at how reductions break down by membership tier:

Contact us if you have any questions about benefit reductions or any other retirement-related topics. Please review your retirement plan booklet for a full description of the benefits you’re entitled to as well as any reductions and restrictions.

Retirement on the Horizon? Here Are a Few Things to Think About

Things to think aboutYou’re probably looking forward to the day when you file your application for a NYSLRS pension. But before you retire, there are a few questions you should ask yourself. After all, by filing for retirement, you’re making critical decisions about your financial future. And once you’ve retired, some of those decisions will be irrevocable. Whether your planned retirement date is just around the corner or a few years off, this checklist could help you avoid costly mistakes.

Do I have all the service credit I think I have?
Under some retirement plans, service milestones (20 years, 30 years, full retirement age) can have a big impact on the amount of your benefit. If you’re aiming for one of these milestones, but retire just short of reaching it, your pension will take a big hit. To make sure you have enough service credit on your planned retirement date, sign in to Retirement Online to see how much service credit you currently have. You can also file a Request for Estimate form or talk with an information representative at our Contact Center (1-866-805-0990 or 518-474-7736 in the Albany, New York area).

Do I have previous service credit I want to purchase?
You may be able to buy credit for previous public employment or military service, which in most cases would increase your pension. But you can’t purchase service credit after you retire. You can use the “Information about Your Public Employment” section of the Request for Estimate form to request credit for previous public and military service. Read our booklet, Service Credit for Tiers 2 through 6, for more information.

Do you have a balance on a NYSLRS loan?
You cannot pay off your NYSLRS loan after you retire. If you retire with an outstanding balance, your pension will be permanently reduced. You can check your loan balance with Retirement Online or through our automated phone system. Call the toll-free number (above), then press 3 for members, 1 or 2 for the Employees’ Retirement System or the Police and Fire Retirement System, and 1 for loan services. If your retirement is still a few years away, you can increase your payroll deductions or send in extra payments to pay off your loan.

Am I ready to retire?
Are you really ready? The fact that you can retire doesn’t necessarily mean you should. Am I financially prepared? Am I psychologically ready for retirement? These are questions you’ll have to answer for yourself, but there are resources available:

Age Milestones for Retirement Planning

Age Milestones for Retirement PlanningWhether you’re 22 or 52, you should be planning for retirement.

NYSLRS retirement benefits are based on tier status, years of service, and average salary. Age is also an important number, and not just the age when you plan to retire. Here are some age milestones to keep in mind while planning for your retirement.

Under 50: It’s never too early to start saving for retirement. Even modest savings can add up over time as investment returns grow and interest compounds.

50: The Age 50 and Over Catch-Up provision allows you to save more pre-tax dollars in a retirement account starting in the calendar year in which you turn 50.

55: The earliest age most NYSLRS members can retire. (Does not apply to members in special retirement plans.) Your pension may be permanently reduced if you retire at 55.

59½: The age you can draw down money from a tax-deferred retirement savings plan, such as an IRA, without facing a potential federal tax penalty. (The penalty does not apply to New York State Deferred Compensation savings if you are retired or have left public service.)

62: Full service retirement age for Tiers 2, 3, 4 and 5 and PFRS Tier 6. Earliest age you can begin collecting a Social Security pension, but the benefit would be reduced. For more information, read When to Start Receiving Retirement Benefits.

63: Full retirement age for ERS Tier 6 members.

65: Age most people are eligible for Medicare benefits.

66: Full Social Security retirement age if you were born from 1943 through 1954. Add two months for each year from 1955 through 1959.

67: Full Social Security age if you were born in 1960 or later.

70: If you do not take your Social Security benefit at full retirement age, your benefit will increase each year until you reach age 70. Delaying Social Security after 70 will not increase your benefit.

70½: If you have tax-deferred retirement savings and are no longer working, you must begin withdrawing some of this money after you turn 70½.

One Last Number: Having a rough idea of your life expectancy is essential to retirement planning.

For more information about retirement planning, read our publication Straight Talk About Financial Planning For Your Retirement.

What Unused Sick Leave Might Mean For You at Retirement

If you’ve accumulated unused, unpaid sick leave, you may be able to use it toward your NYSLRS pension benefit.

New York State employees are eligible for this benefit. You also may be eligible if your employer has adopted Section 41(j) for the Employees’ Retirement System (ERS), or 341(j) for the Police and Fire Retirement System (PFRS), of Retirement and Social Security Law. Not sure? Ask your employer or check your Member Annual Statement.

Here’s How It Works

Your additional service credit is determined by dividing your total unused, unpaid sick leave days by 260. Most ERS members can get credit for up to 165 days (7½ months) of unused sick leave. The benefit is capped at 100 days (4½ months) for most Tier 6 members. State employees in certain negotiating units may be able to use 200 days (about nine months). Those extra “months” would be used in calculating your retirement benefit.

Also, depending on your employer, your unused sick leave may be used to cover some health insurance costs during your retirement. Please check with your employer for information about health insurance.

Restrictions

Unused sick leave cannot be used to reach NYSLRS retirement milestones. Let’s say you have 19½ years of service credit. At 20 years, your pension calculation would improve substantially. You also have 130 days of unused sick leave. Can you add the six months of sick leave credit to get you to 20 years? No. Retirement law does not permit it. You’ll have to work those extra six months to get the 20-year benefit rate, though sick leave credits can still be used in your final pension calculation.

Also, credit for unused sick can’t be used to:

  • Qualify for vesting
  • Reach a minimum retirement age
  • Increase your pension beyond the maximum allowed under your retirement plan
  • Meet the service credit requirement for a special 20- or 25-year plan

Check your retirement plan booklet for more information.