Tag Archives: tier

Retirement Milestones for ERS Tier 3 and 4 Members

Knowing your member milestones can help you plan ahead for your retirement. Most Employees’ Retirement System (ERS) Tier 3 and Tier 4 members (unless they retire under special retirement plans) retire under the Article 15 retirement plan. If you’re covered by this retirement plan, you have a set of milestones that affects how your pension benefit is calculated. This also means it affects how much you’ll receive at retirement.

Here are some important things to remember:

  • You are eligible to retire once you are age 55 and have five years of service credit. There may be reductions to your benefit if certain age requirements aren’t met.
  • You can retire with full benefits at age 62. However, if you are age 55 or older with 30 or more years of service credit, you can also retire with full benefits.
  • If you retire with less than 20 years of service credit, your benefit equals 1.66 percent of your final average salary (FAS) for each year of service.
  • If you retire and have 20 to 30 years of service credit, the benefit is 2 percent of your FAS for each year of service.
  • If you retire with more than 30 years of service credit, the benefit is 2 percent of your FAS for each year of service up to 30. For each year beyond 30, you will receive 1.5 percent of your FAS.

Retirement Milestones for ERS Tier 3 and 4 Members
Please visit our website for more information about ERS member milestones and retirement plans.

NYSLRS Basics: Final Average Salary

As a NYSLRS member, you have a defined-benefit retirement plan that provides a lifetime pension when you retire. Laws passed by the Legislature and signed by the Governor have established the formulas used to calculate these benefits. Your specific benefit will be based on two main factors: service credit and final average salary. You’re probably familiar with service credit — it’s generally the years of service you’ve spent working for a participating employer. But, what is a final average salary (FAS)?

When we calculate your pension, we find the set of years (one, three or five, depending on your tier and retirement plan) when your earnings were highest. The average of these earnings is your FAS. Usually your FAS is based on the years right before retirement, but they can come anytime in your career. In fact, the years used to calculate your FAS may not match up to a calendar year or even a fiscal year. For FAS purposes, a “year” is any period during which you earned one full-time year of service credit.

Types of Final Average SalaryNYSLRS Basics: Understanding your Final Average Salary

Your tier and plan determine how your FAS is calculated:

  • Three-year FAS: Members in Tier 1, 2, 3, 4, and 5.
  • Five-year FAS: Members in Tier 6.
  • One-year FAS: Members in the Police and Fire Retirement System (PFRS). Your employer must choose to offer this benefit. It’s not available to PFRS members covered by Article 14 and generally not available to PFRS Tier 6 members.

Exclusions and Limits

The law limits the FAS of all members who joined on or after June 17, 1971. For example, for most members, if your earnings increase significantly through the years used in your FAS, some of those earnings may not be used toward your pension. The specific limits vary by tier; check out your retirement plan booklet on our Publications page for details.

Since 2010, with the creation of Tiers 5 and 6, the Legislature and the Governor have introduced additional limits to the earnings that can be used toward the FAS:

Tier 5

  • Overtime pay is capped — $18,448.11 in calendar year 2017 and $19,001.55 in 2018.

Tier 6

  • Overtime pay is capped — $15,721 in fiscal year 2017 and $16,048 in 2018.
  • Lump sum vacation pay and wages from more than two employers are no longer included in your FAS.
  • Any earnings beyond the Governor’s salary — currently $179,000 — are left out of your FAS.

Find out more about how FAS are calculated on our website.

Want to read more NYSLRS Basics? Check out our posts on when you can retire and choosing your pension payment option.

NYSLRS Basics: When Can You Retire?

There are core elements behind each NYSLRS retirement plan that every member should know. Knowing your retirement plan details like what your pension payment options are and how your final average salary (FAS) works is essential. Learning these NYSLRS Basics can give you a good foundation of information and help you prepare for retirement.

When Can I Retire?

This is a popular question we hear from members. Because of the large number of retirement plans we manage, there isn’t one single answer to this question, but we do have answers.

If you’re in a regular retirement plan (the vast majority of members are in regular plans), you can retire any time on or after your 55th birthday. However, some service credit requirements do apply:

  • Tier 1 members, depending on their plan, may need two or five years of service credit if they recently changed employers
  • Tier 2, 3, or 4 members need five or more years of service credit
  • Tier 5 and 6 members need ten or more years of service credit

Note: service credit is defined as the credit you receive for your paid public employment with a NYSLRS participating employer.

If you’re in a special retirement plan (most police officers, firefighters, sheriffs and correction officers are in special plans), you can retire at any age as long as you’ve met the service credit requirement for that plan. Special plan members can retire once they reach 20 or 25 years of service credit, whichever their plan requires.

Retiring at Age 55 vs. Full Retirement Age

Keep in mind that even though you could retire as early as 55, you may receive a benefit reduction* for not waiting until the full retirement age. (Visit our Early Age Reduction page to see the reductions for your tier.) Under NYSLRS regular retirement plans, you can retire with no reduction once you reach your full retirement age.Full_Benefit_Retirement_Age

It’s important to know that if you decide to retire with a reduced benefit, the reduction is permanent – it doesn’t end once you reach your full retirement age. Keep this in mind once you start preparing for retirement.

Knowing what your full retirement age is and when you’re first eligible to retire is just one part of the NYSLRS Basics series. Look out for a future post on retirement option selection.


*There are some exceptions: Tier 1 members can retire at age 55 without a benefit reduction; ERS Tier 2, 3 & 4 members and Tier 5 Uniformed Court Officers and Peace Officers employed by the Unified Court System can retire at age 55 with 30 or more years of service credit without a benefit reduction.

NYSLRS – One Tier at a Time: ERS Tier 6

When you join the New York State and Local Retirement System (NYSLRS), you’re assigned a tier based on the date of your membership. There are six tiers in the Employees’ Retirement System (ERS) and five in the Police and Fire Retirement System (PFRS). Each tier has a different benefit structure established by New York State legislation. Our series, NYSLRS – One Tier at a Time, walks through each tier to give you a quick look at the benefits in both ERS and PFRS.

Today’s post looks at Tier 6 in the Employees’ Retirement System. Anyone who joined ERS on or after April 1, 2012 is in Tier 6. There are 91,607 ERS Tier 6 members as of March 31, 2015, making them the second largest tier group in ERS.

If you’re an ERS Tier 6 member, you can find your retirement plan publication from the list below for more detailed information about your benefits:

Be on the lookout for the last NYSLRS – One Tier at a Time post next month. Want to learn more about the different NYSLRS retirement tiers? Check out some earlier posts in the series:

NYSLRS – One Tier at a Time: PFRS Tier 6

When you join the New York State and Local Retirement System (NYSLRS), you’re assigned a tier based on the date of your membership. There are six tiers in the Employees’ Retirement System (ERS) and five in the Police and Fire Retirement System (PFRS). Each tier has a different benefit structure established by New York State legislation. Our series, NYSLRS – One Tier at a Time, walks through each tier to give you a quick look at the benefits in both ERS and PFRS.

Today’s post looks at Tier 6 in the Police and Fire Retirement System. Anyone who joined PFRS on or after April 1, 2012 is in Tier 6. PFRS Tier 6 members currently make up 8.4 percent of NYSLRS’ total membership, totaling 2,861 members, making it the second largest tier in PFRS.

Check out the graphic below for the basic retirement information for PFRS Tier 6 members.

PFRS-Tier-6-Benefits

Where to Find PFRS Tier 6 Information

If you’re a PFRS Tier 6 member, please find your retirement plan publication from the list below for more details about your benefits:

Please visit our Publications page for special plans under miscellaneous titles.

Stay tuned for more NYSLRS – One Tier at a Time posts. Next time, we’ll take a look at another ERS tier. Want to learn more about the different NYSLRS retirement tiers? Check out some earlier posts in the series:

NYSLRS – One Tier at a Time: ERS Tier 5

When you joined the New York State and Local Retirement System (NYSLRS), you were assigned a tier based on the date of your membership. There are six tiers in the Employees’ Retirement System (ERS) and five in the Police and Fire Retirement System (PFRS). Each tier has a different benefit structure established by State Law.

Today’s post looks at ERS Tier 5, which covers ERS members who joined from January 1, 2010 through March 31, 2012. As of March 31, 2016 there were 53,123 ERS Tier 5 members — 8.7 percent of NYSLRS’ total membership.

The graphic below illustrates basic retirement information for Tier 5 members.ERS Tier 5

Where to Find More ERS Tier 5 Information

ERS Tier 5 members can find more details about their benefits in the publications listed below:

For benefit information about special plans for miscellaneous titles, please visit our publications page.

Stay tuned for more NYSLRS – One Tier at a Time posts. Want to learn more about the different NYSLRS retirement tiers? Check out some earlier posts in the series:

NYSLRS Loans: What You Need To Know

If you’ve taken a loan against your New York State and Local Retirement System (NYSLRS) contributions, please remember to pay it back before you retire. An outstanding NYSLRS loan balance at retirement will permanently reduce your retirement benefit. You can’t make loan payments after you retire, and the reduction doesn’t go away after we recover the funds.

Loan Reduction Examples

Here are some loan reduction examples you might find helpful:

Loan Reduction Amount at Retirement (ERS Tiers 3, 4, 5 and 6)

At Age Outstanding Loan Balance Annual Pension Reduction
55 $1,000 $53.18
$5,000 $265.90
$10,000 $531.80
60 $1,000 $59.35
$5,000 $296.74
$10,000 $593.47
62 $1,000 $62.35
$5,000 $311.74
$10,000 $623.48
65 $1,000 $67.59
$5,000 $337.95
$10,000 $675.90
70 $1,000 $79.12
$5,000 $395.60
$10,000 $791.20

Loan Reduction Amount at Retirement (PFRS Tiers 3, 5 and 6)

At Age Outstanding Loan Balance Annual Pension Reduction
45 $1,000 $45.02
$5,000 $225.11
$10,000 $450.23
50 $1,000 $49.06
$5,000 $245.31
$10,000 $490.63
55 $1,000 $54.46
$5,000 $272.30
$10,000 $544.60
60 $1,000 $61.70
$5,000 $308.49
$10,000 $616.98
62 $1,000 $65.25
$5,000 $326.26
$10,000 $652.53
65 $1,000 $71.45
$5,000 $367.27
$10,000 $714.54

Tax Implications

Members who retire with outstanding NYSLRS loans that exceed the federal limit for non-taxable loans may face significant tax consequences. Part or all of your loan balance may be considered taxable funds that were credited to your account and would be subject to federal income tax in the year that you retire. Also, if you’re under age 59½ at the time your loan becomes reportable, you may be subject to an additional 10 percent penalty tax.

Contact Us

For the payoff balance on your NYSLRS loan, call our automated phone service toll-free at 1-866-805-0990 or 518-474-7736 within the Albany, New York area. For information on how to make additional payments or increase your loan payment amount, please visit our Loans: Getting One and Paying it Back page.

NYSLRS – One Tier at a Time: ERS Tiers 3 & 4

(We know that’s two, but let us explain)

When you join the New York State and Local Retirement System (NYSLRS), you’re assigned a tier based on the date of your membership. There are six tiers in the Employees’ Retirement System (ERS) and five in the Police and Fire Retirement System (PFRS) – so there are many different ways to determine benefits for our members. Our new series, NYSLRS – One Tier at a Time, walks through each tier and gives you a quick look at the benefits the members are eligible for before and at retirement.

Today’s post looks at Tiers 3 and 4 in the Employees’ Retirement System. Now, we know these are technically two tiers, but many of the members in these tiers are eligible to retire under the same retirement plan: Article 14 (for Tier 3 members) or Article 15 (for Tier 3 and 4 members). They also represent the largest percentage – 64.2 percent – of our ERS membership. Of our current 496,441 ERS members, 318,939 are in Tiers 3 and 4.

Check out the graphic below for the basic retirement information for Tier 3 and 4 members.
If you’re an ERS Tier 3 or 4 member, find your retirement plan publication from the list below for more detailed information about your benefits:

Stay tuned for more NYSLRS – One Tier at a Time posts. Next time, we’ll take a look at one of our PFRS tiers.

Knowing Your Retirement Plan is the Key to Retirement Planning

Be proactive in learning about your retirement plan.Whether you’re new to public service and occasionally catch yourself dreaming of life after work, or a longtime NYSLRS member counting down the days to your retirement date, information is the key to being fully prepared for and feeling confident about your retirement years. The single most important thing you can do to achieve this goal is to know what NYSLRS retirement plan you’re in. Once you know that, the next thing you must do is understand the benefits your plan offers you.

But here’s the challenge: while the average public pension system in this country administers eight plans, NYSLRS manages a head spinning 346 different retirement plans. Determining the retirement plan you have starts with your answer to two key questions.

Two Questions, Many Answers

What System Are You In?Question One: Which retirement system are you in? NYSLRS is made up of two different systems, although they are each administered by the same staff. They are:

Which Tier Are You In?Question Two: Which tier are you in?

Your tier is a distinct group of membership based on when you joined NYSLRS. At this time, there are six tiers in ERS and five tiers in PFRS. Your plan benefits depend on what tier you are in. For some members, your job title and choices made by your employer may also affect the benefits available to you. But for the most part, once you know what System and tier you are in, you can use that knowledge to find your plan publication on our website.

Take the Time to Understand Your Retirement Plan

It cannot be stated enough how important it is to read your plan publication to learn all you can about your benefits. It is the key to solid retirement planning because each plan publication provides a wealth of information to help you understand things like:

How many years you’ll need to work in order to receive a pension.

What will your pension amount be and how is determined.

What kind of death and disability benefits are available to you.

Plan publications may also be available from your employer.

If you’re still not sure what plan you’re covered by, ask your employer or check your latest Member Annual Statement.

Remember, no one has a more vested stake in your retirement than you do. But in order to have the best understanding of what lies ahead, you need to dive head first into retirement planning. By taking a little time to get familiar with your retirement plan and the benefits it provides, you’ll be better prepared for your financial future.