Category Archives: General News

A Good Plan Can Ease Transition to Retirement

When people talk about retirement planning, they’re usually talking about money. But there is another aspect that people often forget. What will you do with all that newfound free time?

Sure, after decades of hard work, thoughts of sleeping late and taking it easy seem pretty good. But retirement is a big transition, and many retirees don’t consider its potential psychological consequences.

steps to ease transition to retirement

Create a Plan and Schedule

While you may have some complaints about your job, it is an important part of your life. It helps define who you are and can give you a sense of accomplishment. It provides structure, mental stimulation and social interaction. Leaving the workforce creates a big void, and watching daytime TV or frequent trips to the grocery store may not be enough to fill that void. Empty or aimless hours can lead to boredom, disenchantment and even depression.

You may have a long list of things to do, places to go, books to read, but it won’t mean much if you don’t act. To successfully manage your time, you’ll need to actively plan and create a schedule. Set down how you will spend each day of the week, blocking out time for chores, social engagements, hobbies and exercise. Sticking to a schedule will give your days structure and give you a sense of purpose.

Stay Active and Engaged

For most people, staying busy and remaining socially engaged are essential to a satisfying retirement. That’s why some retirees go back to work full-time, while others opt for part-time or seasonal jobs.

But a retirement job doesn’t necessary mean continuing to do the same old thing. Retirement is an opportunity to reinvent yourself. Do something you’ve always wanted to do, something fun and challenging.

Hopefully, you’ve planned your retirement so you won’t need to work to meet basic needs, so your retirement gig won’t have to pay a lot. In fact, maybe the job for you is one that doesn’t pay at all, at least monetarily. There are countless organizations looking for volunteers, so it shouldn’t be hard to find opportunities that match your skills and interests.

Volunteering just a few hours a week will give you something to look forward to and keep you connected to the outside world. And studies show that it can improve both your mental and physical well-being.

Exercise Your Body and Brain

Regular exercise not only keeps you physically fit, it also increases your sense of well-being. Whatever you do to get exercise, make it part of your regular schedule. Consider taking a fitness class at a local gym, which also adds a social element to your workout. (And you can up the ante by trying something new, like a martial arts class.)

Don’t forget to exercise your brain. A course or workshop can help you discover a new side to yourself (the painter, the mystery writer, the master of topiary). You may want to enroll in classes at a local community college or even return to school full-time.

Whatever you do, make sure it’s part of a plan – a plan for a happier retirement.

A Look Inside NYSLRS

NYSLRS paid $12.03 billion in benefits to 470,596 retirees and beneficiaries during the state fiscal year that ended on March 31. Seventy-five percent of the cost of those benefits came from returns on investments of the New York State Common Retirement Fund (the Fund).

The Fund was valued at $207.4 billion at the end of the fiscal year. The average return on Fund investments was 11.35 percent for the year, exceeding the long-term expected return rate of 7 percent.

a look at NYSLRS retirement fund, benefits and membership

 

NYSLRS Membership

But NYSLRS is more than just the pension fund. The system had 652,030 members as of March 31, including county workers, professional firefighters and State troopers. Here are some facts about them:

  • NYSLRS’ 533,415 active members (that is, members still on a public payroll) work for more than 3,000 public employers statewide.
  • One-third of those active members work for New York State. The rest work for counties, cities, towns, villages, school districts and public authorities.
  • Nearly 94 percent of active members are in the Employees’ Retirement System (ERS). The Police and Fire Retirement System (PFRS) accounts for 6 percent of NYSLRS membership.

More than one-third of all NYSLRS members are in Tier 6. (But two-thirds of PFRS members are in Tier 2.)

NYSLRS Retirees and Beneficiaries

The average pension for an Employees’ Retirement System (ERS) retiree was $23,680; the average for a Police and Fire Retirement System (PFRS) was $50,922. But NYSLRS pension payments don’t just benefit the system’s retirees and beneficiaries. Because 79 percent of NYSLRS retirees and beneficiaries live in New York, $9.8 billion worth of benefits stayed in the State. And that money supported local businesses, paid local taxes and generated economic development statewide.

An Award-Winning Publication

Extensive information about NYSLRS members and retirees, the Fund, and Fund investments can be found in the 2018 Comprehensive Annual Financial Report (CAFR). NYSLRS received a Certificate of Achievement for Excellence in Financial Reporting for the 2017 CAFR. The Certificate of Achievement is a national award recognizing excellence in the preparation of state and local government financial reports. NYSLRS has won this award for the last 14 years.

NYSLRS Basics: Special Beneficiary Designations

As a NYSLRS member, it’s important for you to name beneficiaries. When you die, your beneficiaries may be eligible to receive a death benefit. You can choose anyone you wish to receive your death benefit; it does not have to be a family member. In fact, it doesn’t even have to be a person. You can name your estate, a charity or a trust, but it helps to know how these special beneficiary designations work.

There are two main types of beneficiaries. A primary beneficiary is someone you choose to receive your benefit if you die. A contingent beneficiary would receive the benefit if the primary beneficiary dies before you. If a beneficiary dies before you, you should update your beneficiary information to ensure that your benefit is distributed according to your wishes. You can name more than one primary or contingent beneficiary.

Retirement Online is the convenient and secure way to update your beneficiaries. If you don’t already have an online account, you can learn more on our website.

Benefit Distribution

If you name more than one primary beneficiary, each will share the benefit equally. You can also have a certain percentage of the benefit paid to each beneficiary. The percentages don’t have to be equal, but they must add up to 100 percent. (For example, John Doe, 50 percent; Jane Doe, 25 percent; and Mary Doe, 25 percent). The same rule applies for multiple contingent beneficiaries.

Special Beneficiary Designations

Here are the rules pertaining to special beneficiary designations:

special beneficiary designations

Trusts

If you have executed a trust agreement or provided for a trust in your will, your trust can be your primary or contingent beneficiary. To name a trust, sign in to Retirement Online or use our Trust with Contingent Beneficiaries form (RS5127-T).  We’ll need a copy of your trust document, which you can mail to NYSLRS.

With this type of designation, the trust is the beneficiary, not the individuals who will receive the trust. If you revoke the trust or it expires, you will want to make new beneficiary designations as soon as possible to ensure benefits are paid according to your wishes.

You should talk to a lawyer if you’d like more information on trust agreements.

Estates

You may name your estate as the primary or contingent beneficiary of your death benefit. If you name your estate as your primary beneficiary, you cannot name a contingent. If a benefit is payable, the executor of your estate will distribute it according to your will.

Entities

You may name any charitable, civic, religious, educational or health-related organization as a primary or contingent beneficiary.

Minor Children

If your beneficiary is under age 18 at the time of your death, your benefit will be paid to the child’s court-appointed guardian. You may also choose a custodian to receive the benefit on the child’s behalf under the Uniform Transfers to Minors Act (UTMA). Before making this type of designation, please contact us for more information.

More Information

Please note that some of these beneficiary designations will be subject to a NYSLRS legal review.

For more information, please read our publication “Why Should I Designate a Beneficiary?” You can find your current NYSLRS beneficiaries listed in Retirement Online, or in your Member Annual Statement, which is sent out every summer.

Firefighters Deserve A Salute Every Day

Recognizing Firefighters

It’s National Fire Prevention Week this week and, while attention is properly focused on promoting fire prevention, we also think it’s a great time to recognize all the firefighters who are members of the New York State and Local Retirement System (NYSLRS).

Of the 533,415 members in NYSLRS, 32,470 are in the Police and Fire Retirement System (PFRS). More than 6,000 of these brave men and women are firefighters.

NYSLRS Firefighters data

NYSLRS Membership and Firefighters

All firefighters working for participating employers are PFRS members. With that membership comes a variety of benefits, including certain death and disability benefits as well as a pension. As firefighters and other PFRS members progress through their careers they become eligible for these benefits. For example, from day one, PFRS members are covered by job-related death and disability benefits. However, with ten years of service credit, most members are also eligible for a non-job-related disability benefit.

In addition, most PFRS employers offer their employees special retirement plans. A special plan lets members retire after completing 20 or 25 years of credited service in specific job titles rather than reaching a certain age. Most firefighters — and, in fact, nearly 80 percent of all PFRS members (25,784) — are enrolled in a set of special 20- and 25-year plans. Whether members need 20 or 25 years depends on their retirement plan.

Firefighters are Heroes

To the members of the New York State Professional Fire Fighters Association, the Firemen’s Association of the State of New York and the New York State Association of Fire Chiefs; to the county fire marshals, supervising fire marshals, fire marshals, assistant fire marshals, assistant chief fire marshals and chief fire marshals: Thank you for your service to New York and its citizens. We are grateful for the valuable service you provide all of us.

Earning NYSLRS Service Credit as a School Employee

In an earlier post, we talked about how full-time and part-time service credit works for NYSLRS members. We mentioned how earning NYSLRS service credit for workers in an educational setting can be a little different.
There are non-teachers earning NYSLRS service credit.

While most New York teachers and administrators are in the New York State Teacher’s retirement system, other school employees are members of the New York State and Local Retirement System (NYSLRS). In fact, 1 out of 5 NYSLRS members works for a school district. Most work according to the school year, which could be only 10 or 11 months long. So how do we determine service credit for them?

Earning NYSLRS Service Credit When You Work Full-Time

If you’re a school employee who works full-time, you receive one year of service per school year. Generally, a full-time 10-month school year requires at least 180 days worked in any school year. Depending on your employer, a full academic year can range from 170 to 200 days.

Earning NYSLRS Service Credit When You Work Part-Time

Part-time school employees earn service credit based on the number of days they work. The number of hours in a full-time day is set by your employer (it’s between six and eight hours). If you don’t work full-time, your employer converts the number of hours you worked into the equivalent number of full-time days. Your employer reports that number to us, and your days worked are plugged into the formulas below.

Regardless of whether you work full- or part-time, depending on the length of your school year, your service is credited in the following ways:

For all BOCES and school district employees, as well as
teachers working at New York State schools for the deaf and blind

Number of days works ÷ 180 days

For college employees

Number of days worked ÷ 170 days

For institutional teachers

Number of days worked ÷ 200 days

Infographic showing how to calculate part-time service credit for school employees

Check Your Member Annual Statement

Your Member Annual Statement is provided to you every summer. For most members, your statement will show how much service credit you’ve earned for 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. You can also check your Retirement Online account to find your service credit totals.

For more information on service credit, read our booklet, Service Credit for Tiers 2 through 6 (VO1854), or your own retirement plan publication.

Dual Membership in NYSLRS

The New York State and Local Retirement System (NYSLRS) consists of two retirement systems: the Employees’ Retirement System (ERS) and the Police and Fire Retirement System (PFRS). Your job title determines what system you’re in. In some cases, however, it’s possible to have a dual membership, to be a member of both systems. As of State fiscal year end 2018, 1,574 members had memberships in both ERS and PFRS.

How Does Dual Membership Work?

dual membership in NYSLRSLet’s say you work as a fire fighter, so you’re a member of PFRS. You decide to take on a part-time job as a bus driver for your local school district. Your school district participates in ERS, so you’re eligible for ERS membership. You fill out the membership application, and now you’re a member of both ERS and PFRS. The date you join each system determines your tier in each membership.

Implications of Dual Membership

As a member of both systems, you’d have separate membership accounts. Let’s look again at our fire-fighting bus driver example. While working as a fire fighter, you make any required contributions and earn service credit toward your PFRS pension only. The same is true for your work as a bus driver—your required contributions and earned service credit only go toward your ERS pension, not your PFRS pension.

There are other implications to dual membership. Assuming you’re vested in both memberships and meet the service credit and age requirements, you could retire and collect a pension from both systems. You’d need to file separate retirement applications for ERS and PFRS, and we’d calculate each pension separately. We’d calculate your ERS pension using the final average salary (FAS) you earned as a bus driver and your PFRS pension using the FAS from your time as a fire fighter.

And, since you’d have both an ERS pension and a PFRS pension, you would need to choose a beneficiary for each in the event of your death.

Questions?

You’ll want to make sure to know the details of your retirement plan in each system. If you have any questions about dual membership, or to discuss your particular situation when you decide to retire, please contact us.

Top 5 Retirement Myths

retirement myths versus facts

Retirement law can be confusing. Sometimes a small misunderstanding can have a big impact on your benefit. That’s why it’s important to correct some common retirement myths. Here are the top five:

Retirement Myth #1

mythMy NYSLRS loan has gone into default, but I’ve already paid taxes on it. That means I no longer need to repay it.

factYou still need to repay your loan. In fact, it continues to accrue interest until you do. And, if you haven’t paid back your loan by the time you retire, your pension amount will be reduced.

Retirement Myth #2

mythI am required to contribute toward my retirement. When I do retire, my benefit will be based on what I contributed.

fact Your required member contributions aren’t a factor in the calculation of your pension. Your pension is based primarily on your service credit and the salary you earn while working for public employers. Your retirement plan and, in most cases, your age at retirement are also factors.

Retirement Myth #3

mythI can’t collect my pension until I start receiving Social Security.

fact You can collect your pension as soon as you meet the eligibility requirements of your retirement plan. Most members can retire as early as age 55, though there may be a permanent reduction in your benefit if you retire before full retirement age (62 or 63 depending on your tier). You should check the eligibility requirements for your plan and tier when you’re planning for retirement.

Retirement Myth #4

mythIf I am vested (have enough service to be eligible for a pension benefit) and no longer working for a public employer, NYSLRS will automatically start paying my pension as soon as I’m eligible.

fact Only you can decide when it’s time to retire. You must file an Application for Service Retirement (RS6037) to begin collecting your pension benefits.

Retirement Myth #5

mythI recently applied for retirement by giving my employer the paperwork.

factGiving your employer your NYSLRS forms does not mean that you have filed for retirement. To receive your NYSLRS pension, you must file your retirement application with the Office of the State Comptroller. Your application, or any form, is “filed with the Comptroller,” when it’s received by our Albany office or one of our consultation sites.

Have a concern that wasn’t covered? Visit our Contact Us page for more answers. If you have account-specific questions, you can also send us a message through our secure email form.

Infographic regarding spending habits

Spending Changes in Retirement

Just like starting your first job, getting married or having kids, retirement will change your life. Some changes are small, like sleeping in or shopping during regular business hours. Others, however, are significant and worth examining ahead of time… like how much you’ll be spending in retirement each month or each year.

An Employee Benefit Research Institute (EBRI) study offers some good news for prospective retirees. Household spending generally drops at the beginning of retirement — by 5.5 percent in the first two years, and by 12.5 percent in the third and fourth years. (Although, nearly 46 percent of households actually spend more in the first two years of retirement.)

Analysis from the Bureau of Labor Statistics in the U.S. Department of Labor seems to support the research from EBRI. In “A closer look at spending patterns of older Americans,” the author analyzed data from the 2014 Consumer Expenditure Survey, and she also found a progressive drop in spending as age increases. (Income declines with age as well.)

While data supporting EBRI’s study is helpful, it turns out that the highlight of the Consumer Expenditure Survey results is a detailed look at how the things we spend our money on change as we grow older.

Infographic regarding spending habits

As interesting as that is, it’s just a general look at how older Americans are managing their money. What really matters is: How will you spend your money once you retire?

Prepare a Post-Retirement Budget

Like a fiduciary choir, financial advisors all sing the same refrain: Start young; save and invest regularly to meet your financial goals. If you do, the switch from saving to spending in retirement can be easy.

But, in order to make that transition, you need a budget.

The first step toward a post-retirement budget is a review of what you spend now. For a few months, track how you spend your money. Don’t forget to include periodic costs, like car insurance payments or property taxes. By looking at your current spending patterns, you can get an idea of how you’ll spend money come retirement.

Then, consider your current monthly income, and estimate your post-retirement income. If your post-retirement income is less than your current income, you might want to plan to adjust your expenses or even consider changing your retirement date.

We have monthly expense and income worksheets to help with this exercise. You can print them out and start planning ahead for post-retirement spending.

Monthly budgeting worksheets (PDF)

Monthly Worksheets (PDF)

For those of you who carry smart phones, Forbes put together a list of popular apps for tracking your daily spending. All of them are free, though some do sell extra features. Many of them can automatically pull in information from your bank and credit card accounts, but if you’d rather avoid that exposure or if you use cash regularly, you may prefer an app that lets users enter transactions manually.

See You at the Fair

The Great New York State FairThe 178th Great New York State Fair opens next week and NYSLRS will be there.

The 13-day celebration of everything New York runs through Monday, September 3 (Labor Day). Our information representatives will be at the fairgrounds, as they have been for more than 20 years, to help members and retirees with their retirement planning and benefit questions. In the past, many NYSLRS members have stopped by the booth to get a benefit projection. You’ll also be also be able to pick up retirement plan brochures and forms or have a consultation with one of our information representatives.

The NYSLRS booth will be in the Center of Progress Building, building 6 on the State Fair map, near the Main Gate. Once inside, you can find us against the wall on the east side.

Find Unclaimed Funds at the State Fair

OSC’s Office of Unclaimed Funds booth will be in the same building, just across from the NYSLRS booth. An unclaimed fund is lost or forgotten money, perhaps in old bank account or insurance policy that has been turned over to the State. See if any of that money might be yours. So far this year,  State Comptroller Thomas P. DiNapoli and the Office of Unclaimed Funds has returned more than $284 million.

Comptroller DiNapoli visits the New York State Fair

Comptroller Thomas P. DiNapoli greets a NYSLRS member at the Fair.

The Retired Public Employees Association (RPEA) will also have a booth in the Center of Progress Building.

Special State Fair Days

Wednesday, August 22

  • Opening Day — $1 admission

Friday, August 24

  • Pride Day — LGBT choirs, parade

Monday, August 27

  • Law Enforcement Day — Free admission for law enforcement personnel and corrections officers
  • Senior Citizen’s Day — Free admission for senior citizens (60+)

Tuesday, August 28

  • Comptroller DiNapoli Visits the Fair — He manages the $207.4 Billion State Pension Fund and is the administrator of NYSLRS. He’ll be stopping by NYSLRS’s booth during the day.
  • Fire & Rescue Day — Free admission for active and retired members of fire departments and emergency services organizations
  • Senior Citizen’s Day — Free admission for senior citizens (60+)

Wednesday, August 30

  • Women’s Day

Thursday, August 31

  • Armed Forces Day — Free admission for active duty or veterans

Note: ID required for free admissions listed above. For details, check out the complete schedule of Special Fair Days.