Tag Archives: Overtime

Overtime Limits for Tier 5 and 6 Members

While the exact formula used to calculate a NYSLRS pension varies by tier and plan, your pension will be based on your service credit and final average earnings (FAE). Your FAE is the average annual earnings you received during the period when your earnings were highest (36 consecutive months for Tier 5 and 60 consecutive months for Tier 6). Your FAE can include overtime pay you earned in that period, but, for Tier 5 and 6 members, the law limits how much overtime can be used when calculating your pension.

You can still earn overtime pay beyond the limit — it just won’t be factored into your FAE. On the other hand, members aren’t required to make contributions on overtime pay that is above the limit.

overtime limits

Tier 5 Overtime Limits

The overtime limit for Tier 5 Employees’ Retirement System (ERS) members increases each calendar year by 3 percent. In 2023, the limit for Tier 5 ERS members is $22,028.01.

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

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). In 2023, the limit for Tier 6 ERS members is $19,729.

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

Learn More

There may be other limitations to your FAE. For example, for most members, if your earnings increase significantly during the years used in your FAE, it’s possible that some of those earnings may not be used toward your pension. The specific limits vary by tier. Visit our Final Average Earnings page for more information.

You can learn more about the overtime limits, FAE and retirement calculations in your retirement plan booklet. Find yours using our Find Your NYSLRS Retirement Plan Publication tool.

Tier 6 FAS Limits (ERS)

 

 

First, a year of earnings in the FAS period can’t exceed the average of the previous four year’s earnings by more than 10 percent. Anything beyond that will not be included in the pension calculation.

Additionally, several types of payments will not be part of the FAS calculation for ERS Tier 6 members:

  • Lump-sum vacation pay,
  • Wages from more than two employers,
  • Payment for unused sick leave,
  • Payments for working during a vacation,
  • Any payments that cause your annual salary to exceed that of the Governor (currently $179,000),
  • Termination pay,
  • Payments made in anticipation of retirement,
  • Lump-sum payments for deferred compensation and
  • Any payments made for time not worked.

Generally speaking, here’s what an ERS Tier 6 FAS will include: regular salary, holiday pay, overtime pay (regular and noncompensatory) earned in the FAS period and up to one longevity payment per year, if earned in the FAS period.

Overtime Limits

While overtime pay generally is part of an ERS Tier 6 FAS, the amount that can be included is limited. The limit is adjusted for inflation each year based on the change in the Consumer Price Index over the one-year period ending September 30 of the previous year. Under a new law, beginning January 1, 2018, the Tier 6 limit will be updated on a calendar year basis instead of on a fiscal year basis.

The 2018 calendar year overtime limit for Tier 6 members is $16,406.

For more information about the Tier 6 FAS, find your retirement plan booklet on our Publications page, or check out our Final Average Salary and Overtime Limits for Tier 6 pages.