Tag Archives: New York State & Local Retirement System

Planning for an Unplanned Retirement

Retirement comes too soon for some people. Poor health, an injury, family situations, layoffs and other unforeseen circumstances could force you into an unplanned retirement.

unplanned retirement

You may already have a plan based on the date you would like to retire, but do you have a backup plan if that date comes a few years earlier than expected?

Know Your Benefits

As a NYSLRS member, you’re entitled to benefits that may help. Most vested members can begin collecting a lifetime pension as early as age 55, though your benefit may be permanently reduced if you retire before full retirement age. (Full retirement age for NYSLRS members is either 62 or 63, depending on your tier. Full retirement age for Social Security benefits depends on your year of birth.)

If you can no longer do your job because of a physical and mental condition, you may be eligible for a Social Security Disability, or a NYSLRS disability benefit if your disability is permanent.

You may also want to look into Workers’ Compensation if you are injured on the job or Unemployment Insurance if you have been laid off from a position.

Other Ways to Plan for the Unexpected

Doing your homework is important. The more you understand the potential benefits available to you, the better you can estimate your income if you are forced to retire early. Unfortunately, the numbers you come up with may not be enough when dealing with an unplanned retirement.

But one potential source of income can make a big difference: retirement savings. Your savings could help you get by until you are eligible to collect your NYSLRS pension or another retirement benefit. If you are not saving for retirement, consider starting now. And if you are saving, consider increasing your savings. It could become a lifeline if the unexpected happens.

New York State employees and some municipal employees can also save for retirement through the New York State Deferred Compensation Plan. Ask your employer if you are eligible.

For more information about the benefits offered by your NYSLRS retirement plan, visit our website to read your plan publication.

Protecting Your Identity Online: Tips for Secure Passwords

Secure Passwords

The rules for password creation have changed in recent years, so you may have to unlearn some of the things you’ve been taught in the past about secure passwords.

The National Institute of Standards and Technology (NIST), the federal agency that created the original password guidelines, recently revised those guidelines. Its current recommendations are based on research on both the habits of users and the techniques of hackers. Here are some of their findings:

  • Length is a major factor in a password’s strength, so the longer the password, the better.
  • Complex passwords, with a mix of character types, are hard for people to remember, and do little to deter hackers.
  • Strong passwords can be created from short phrases that are easy for you to remember, but would be meaningless to anyone else.
  • Passwords may be used indefinitely as long as they’re strong and have not been compromised. Obviously, if you have an account with a company that just had a data breach, you’ll want to change that password.

Other Ideas on Secure Passwords

Changing passwords every 30, 60 or 90 days was recommended for thwarting hackers, but some security experts now question that tactic. Changing passwords on a regular schedule may have little security value and can lead to bad habits. Research has shown that people tend to make only minor changes when updating their passwords or create weak passwords that are easier for them to memorize. You’re better off creating a strong password, memorizing it and holding on to it.

While NIST has changed some of its guidelines, some of the old ones still apply. Don’t share your secure passwords with anyone, or leave them on sticky notes by your computer. Create unique passwords for important accounts, such as your bank account and your email, and avoid bad passwords such as “password,” “12345678,” “qwerty” and “iloveyou.”

Your Member Annual Statement is Coming

We’ve started distributing the 2019 Member Annual Statements (MAS) to more than 600,000 NYSLRS members. The process is done in stages over six to eight weeks. School employees receive their statements first; most others should see theirs by mid-July.

Your MAS contains important information about your NYSLRS membership, including your reported salary, service credit and beneficiaries. Depending upon your circumstances, you may also see projected annual benefits, loan balances or past service account balances.
member annual statement

When You Receive Your Statement

Be sure to review the information in your MAS carefully. If you need to update your beneficiaries or change your address, email or phone number, you can use Retirement Online — our convenient and secure self-service tool. You can contact us to correct most errors, but if you have a question about your reported salary, please ask your employer.

The information in your statement is valuable year-round; after you check it over, file your MAS away securely. It’s very likely you’ll reference it again in the future.

Member ID Cards

Your statement also includes a member identification card, with both your registration number and NYSLRS ID number. As we complete our series of computer upgrades, we will phase out the old registration numbers and keep just the NYSLRS IDs.

As identity theft becomes more and more prevalent, please help us protect you and your personal information. Reference either your registration or NYSLRS ID number — not your Social Security number — whenever you contact us.

When you receive your statement, be sure to clip out your ID card. Keep it in a secure but easily accessible place, so you’ll always have your numbers handy.

Questions about Your Statement?

Check out our interactive, online presentation that features answers to common MAS questions.

We can provide MAS reprints once we finish mailing statements — usually by mid-July. Contact us then, if you need to order a reprint.

Retirement Online is Back

Earlier this month, NYSLRS finished a series of computer system upgrades to improve the services available to our customers. Retirement Online was unavailable during the upgrade period, but it is now once again available to NYSLRS members, retirees and beneficiaries.

Retirement Online is Back

Using Retirement Online

Register and sign in to Retirement Online to:

  • View benefit information. You don’t need to rely on your annual statement or call our Contact Center. With Retirement Online, you can review up-to-date information about your account when it’s convenient for you.
  • Update contact information. Change your address, phone number or email address online instead of calling or emailing. If you submitted an address change form during the upgrade, we are processing those now.
  • View or update beneficiaries. It’s a good idea to keep your beneficiary designations up to date. View your selections and submit changes instantly. If you submitted a paper beneficiary designation form during the upgrade, your beneficiary change is effective as of the date we received it, however, updates may not appear in your Retirement Online account until your form is processed.
  • Apply for a loan. You may be eligible to take out a loan against your NYSLRS contributions. Do it safely and conveniently with Retirement Online. If you submitted a loan application during the upgrade, we are processing those now.
  • Generate an income verification letter. Sometimes a business or government agency requires you to verify your pension income. Generate and print an official income verification letter any time you need one.

As a result of this spring’s upgrades, we expect to roll out even more features later this year. Members will be able to estimate their pension benefit, purchase service credit and apply for retirement; retirees will get to manage their direct deposit information and more. Stay connected to NY Retirement News for details.

Membership in a Nutshell

If you’re a new NYSLRS member, or have been part of the Retirement System for years, you’re sure to have at least some questions about your NYSLRS benefits. What is vesting? Final average salary? Maybe you’re wondering what tier you’re in or why that even matters. Whether you’re a firefighter on Long Island or a State worker in Buffalo, you can find answers to many of your questions in Membership in a Nutshell. This publication is about the basics. It defines terms and explains concepts that are common to all NYSLRS retirement plans. Consider it essential reading.
Membership in a Nutshell

What’s Inside Membership in a Nutshell?

Membership in a Nutshell provides a brief description of the Retirement System, which comprises the Employees’ Retirement System (ERS) and the Police and Fire Retirement System (PFRS). It also explains the Comptroller’s role as administrator of the System.

That’s followed by a list of some of the benefits provided to members, including:

  • Service Retirement Benefits (Pensions)
  • Disability Benefits
  • Death Benefits
  • Vesting of Benefits
  • Loans for Contributing Members

A larger section is dedicated to the details of membership, such as tier status, membership contributions, earning service credit and becoming vested.

Services We Offer

Perhaps the most helpful section describes Services We Offer Members. We want to provide you with the information you’ll need to plan for your retirement and make critical decisions about your future.

Retirement Online is a safe and convenient way to conduct business with NYSLRS, and to access benefit information such as your tier, retirement plan, service credit and beneficiaries. Register today if you don’t already have an account.

As you get closer to retirement, you can request an estimate of your pension from NYSLRS based on our records of your salary and years of service. We also offer one-on-one consultations with NYSLRS information representatives who can explain your benefits, answer your questions and help you feel confident about making your retirement decision.

Your Obligations

As a member, it’s important that you keep your information with NYSLRS up to date. This section discusses the different kinds of information, such as your mailing address and beneficiaries, that you should keep current. Much of this information can be updated using Retirement Online, or you can contact us.

More Information

There’s more information in this publication, but we’ll let you find it for yourself. We’ll also be featuring other publications in future blogs, including such favorites as:

Public Service Recognition Week

Public Service Recognition Week
This week we proudly celebrate the more than 600,000 members and 400,000 retirees of the New York State and Local Retirement System (NYSLRS) for their service to the people of New York State.

A Brief History of Public Service Recognition Week

Public Service Recognition Week was created in 1985 to honor the men and women who serve our nation as federal, state, county and local government employees. They dedicate their careers — and sometimes their lives — to keep others safe and provide for the common good. Their work makes life in our communities better.

This year, Public Service Recognition Week is being celebrated May 5 through May 11.

The Public Servants of NYSLRS

NYSLRS is full of stories about public servants finding value and meaning in the work they do, especially when they help other New Yorkers.

Whether they are protecting our communities, fighting fires, clearing our roads after snowstorms or simply helping government function better, NYSLRS members deliver the critical resources and services many New Yorkers depend on. Even outside of work, many NYSLRS members and retirees give back to our State by serving their communities as volunteers and supporters of charitable causes.

Comptroller DiNapoli’s Faith in Public Service

New York State Comptroller Thomas P. DiNapoli is the administrator of NYSLRS and trustee of the Common Retirement Fund. His public service career began when he was elected as a trustee to the Mineola Board of Education at the age of 18, making him the first 18-year-old in New York State to hold public office. Comptroller DiNapoli is understandably proud about the career path he has chosen, and he often speaks about the contributions that New York’s public employees make, not just as engaged citizens, but as individuals who bring value to the communities where they live.

Where Are Your Important Documents?

We accumulate a lot of documents over a lifetime — things like birth certificates, diplomas, deeds, wills and insurance policies. If you’re like most people, you probably have papers stuffed in drawers, filing cabinets or boxes in the attic. If you ever needed an important document, do you think you could find it? What’s more, if you passed away, would your loved ones be able to find what they need?
where are your important documents?

Organize Your Important Documents

Important documents and contact information should be kept in a secure but accessible place in your home. This includes personal documents, such as your passport, birth certificate, marriage certificate, will and burial instructions. You should also include information about your retirement benefits, income taxes, bank accounts, credit cards and online accounts. And don’t forget the names and phone numbers of your attorney, accountant, stock broker, financial planner, insurance agent and executor of your will.

To make this a little easier, we’ve developed a fillable form called Where My Assets Are. Fill it out, print it and use it to organize your important papers. It will help you or your loved ones locate these documents when they are needed. It’s a good idea to review and update this information regularly.

Be aware that if you keep a safe deposit box, it may be sealed when you die. Don’t keep burial instructions, power of attorney or your will in a safe deposit box because these items may not be available until a probate judge orders the box to be opened. However, a joint lessee of the box, or someone authorized by you, would be permitted to open the box to examine and copy your burial instructions.

Get Your Affairs in Order

Read our publication Getting Your Affairs in Order and A Guide for Survivors for guidance about preparing your survivors, organizing your files, and who to contact if a loved one dies.

Power of Attorney

Power of AttorneyThe NYSLRS Special Durable Power of Attorney form allows you to designate someone else to act on your behalf regarding retirement benefit transactions. The person you designate, referred to as an “agent,” could be your spouse, another family member or a trusted friend.

Why is this important? Under normal circumstances, NYSLRS won’t release your benefit information to anyone else without your permission — even to your spouse. With a power of attorney (POA) on file, we would be able to discuss your benefits with the agent you appointed.

The NYSLRS POA form is specific to retirement transactions and meets all New York State legal requirements. You may want to designate a power of attorney in case of emergency, hospitalization or unexpected illness, but you don’t have to wait until something happens before you file a NYSLRS POA form.

What Can Your Agent Do?

The NYSLRS form is for a “durable” POA, which means the person you designate can act for you if you become incapacitated. But the NYSLRS POA form only covers Retirement System transactions. It does not authorize your agent to make health care decisions for you or make changes to your Deferred Compensation plan.

Your agent can get account-specific information about your benefits by phone, email or mail. Your agent can request copies of documents in your retirement file or update your address or phone number. If you are still an active member, your agent can also take out a NYSLRS loan or file a retirement application for you. If you are retired, the agent can change the amount of taxes withheld from your pension.

Special Authority

If you use NYSLRS POA form, and your agent is your spouse, domestic partner, parent or child, they will have “gifting authority.” That means they can direct deposit money into a joint bank account, designate or change your death benefit beneficiaries, or choose a retirement payment option that provides for a beneficiary after your death.

If you wish to assign gifting authority to an agent who is not your spouse, domestic partner, parent or child, you must indicate that you want your agent to have the ability to designate him or herself as a beneficiary. This can be done in the “Modifications” section of the NYSLRS POA form.

Find Out More

A power of attorney is a powerful document. Once you appoint someone, that person may act on your behalf with or without your consent. We strongly urge you to consult an attorney before you execute this document.

You can also find information on the Power of Attorney page on our website.

What to Know About ERS Tier 6

Tier status is a major factor in determining your NYSLRS retirement benefits. Employees’ Retirement System (ERS) members who joined NYSLRS on or after April 1, 2012, are in Tier 6. They have plenty of company. There were 205,020 ERS Tier 6 members as of March 31, 2018, making up one-third of ERS membership.

ERS Tier 6 members contribute to the Retirement System based on their earnings, but the amount of their pensions will be determined by years of service and final average salary, not by the amount of their contributions.

ERS Tier 6 Membership Milestones

ERS Tier 6 members need ten years of service credit to become vested. Once vested, they’re eligible for a lifetime pension benefit as early as age 55, but if they retire before the full retirement age of 63, their benefit will be reduced. Tier 6 correction officers, however, can retire with 25 years of service, regardless of age, without penalty.

ERS Tier 6 Benefits

The Final Average Salary (FAS) Calculation

An ERS Tier 6 member’s final average salary is the average of their earnings in the five highest-paid consecutive years of employment. Earnings in any year included in the period cannot exceed the average earnings of the previous four years by more than 10 percent.

Tier 6 Service Retirement Benefit

Generally, if an ERS Tier 6 member retires with less than 20 years, the benefit is 1.66 percent of their final average salary for each year of service. If a member retires with exactly 20 years of service, the benefit is 1.75 percent of their final average salary for each year of service (35 percent of the member’s final average salary).

If a member retires with more than 20 years of service, they receive 35 percent for the first 20 years, plus 2 percent for each additional year. For example, a member with 35 years of service can retire at 63 with a pension worth 65 percent of their final average salary.

If you’re an ERS Tier 6 member, you can find out more about your benefits in one of these plan booklets:

Taxes After Retirement

Calculating post-retirement expenses is crucial to retirement planning. For instance, predicting how much you will pay in taxes can be difficult, because your tax bill depends on your individual circumstances. Most retirees spend less on taxes than they did when they were working, largely because their incomes have gone down. But there are other reasons you may have a lighter tax burden after retirement.

taxes after retirement

New York State Taxes

As a NYSLRS retiree, your pension will not be subject to New York State income tax. New York doesn’t tax Social Security benefits, either.

You may also get a tax break on any distributions from retirement savings, such as deferred compensation, and benefits from a private-sector pension. Find out more on the Department of Taxation and Finance website.

Be aware that you could lose these tax breaks if you move out of New York. Many states tax pensions, and some tax Social Security. For information on tax laws in other states, visit the website of the Retired Public Employees Association.

Federal Taxes

Unfortunately, most of your retirement income will be subject to federal taxes, but there are some bright spots here.

Your Social Security benefits are likely to be taxed, but at most, you’ll only pay taxes on a portion of your benefits. You can find information about it on the Social Security Administration website. (If you’re already retired, use the Social Security Benefits Worksheet in the Form 1040 instructions to see if any of your benefits are taxable.)

Throughout your working years, you’ve paid payroll taxes for Social Security and Medicare. For most workers, that’s 6.2 percent (Social Security) and 1.45 percent (Medicare) out of every paycheck. But Social Security and Medicare taxes are only withheld from earned income, such as wages. Pensions, Social Security benefits and retirement savings distributions are exempt. Of course, if you get a paying job after retirement, then Social Security and Medicare taxes will be deducted from that pay check.

Once you turn 65, you may be able to claim a larger standard deduction on your federal tax return. For more information on the amounts of this deduction, please see the 2018 IRS Tax Map.

To better understand how your retirement income will be taxed, it may be helpful to speak with a tax adviser.