You probably have a lot on your mind right now, but one thing you don’t need to worry about is your NYSLRS pension. Despite the turmoil in the financial markets, your retirement benefits are secure.
want to assure the more than one million men and women who rely on the State
pension fund for retirement security that we are well-positioned to weather the
ongoing volatility,” said New York State Comptroller Thomas P. DiNapoli. “To
our retirees, your pensions are safe and we will continue to pay your benefits
The New York State Common Retirement Fund, which holds and invests NYSLRS assets, has long been recognized as one of best managed and best funded public pension plans in the nation. The strength of the Fund puts NYSLRS in a good position as we navigate through the current economic turmoil.
Fund’s professional managers take a conservative approach to investing and
focus on sustained, long-term results. This approach allows the Fund to capitalize
on investment opportunities in good times and cushions it against market ups
and downs. In recent months, as they recognized increased volatility in the
market, Fund managers began making adjustments to the Fund’s investment
portfolio to prepare for an expected downturn in the economy. They are actively
managing the Fund through these difficult times and are confident the markets
will ultimately recover.
Comptroller Thomas P. DiNapoli’s efforts to prevent and stop pension fraud help protect the integrity of NYSLRS and the retirement security of its members and beneficiaries.
The Comptroller’s Office works with law enforcement and local prosecutors to help root out pension fraud. Over the last several years, these investigations have led to dozens of arrests and the recovery of millions of dollars.
Recent Pension Fraud Cases
A Dutchess County woman failed to notify
NYSLRS about her mother’s death and continued to collect her mother’s pension checks. She collected nearly $42,000 before she was
caught, and pleaded guilty to petit larceny in July 2019. She was sentenced to
three years’ probation and has agreed to pay full restitution.
A Westchester County woman kept her deceased mother’s deposited pension
checks and spent the money on personal
expenses, including cellphone and utility bills. The amount she stole from the
retirement system totaled $60,288. She pleaded guilty to a felony grand larceny
charge and was sentenced to five years’ probation. She also paid back $22,000,
part of her requirement to make full restitution.
Comptroller DiNapoli is also committed to fighting public corruption in state and local government. He partners
with law enforcement to bring corrupt officials to justice and recoup stolen
Since he took office in 2007, DiNapoli’s anti-corruption
initiatives have resulted in more than 200 arrests and the recovery of $60
million in taxpayer money.
How You Can Help
The Comptroller encourages the public to report allegations of wrongdoing by:
Calling the toll-free Fraud Hotline at 1-888-672-4555;
A recent survey gauged how important retirement benefits are to state and local government workers, and the crucial role that pensions and other benefits play in recruiting and retaining workers.
In 2015, more than 19 million Americans worked for state or local
governments, according to U.S. Census Bureau data. Retirement benefits,
including defined benefit and defined contribution plans, were available to
most of those workers.
Last year, the National Institute on Retirement Security
commissioned a survey
of more than 1,100 public sector employees. Teachers, police officers,
firefighters and other public workers were asked questions on a variety of
work-related subjects, from job satisfaction to health care benefits. The
majority of public workers surveyed (86 percent) cited retirement benefits as a
major reason they stay in their jobs.
Defined Benefit vs. Defined
An overwhelming number (94 percent) of government employees
surveyed said pensions help attract and retain workers. The same percentage had
a favorable view of defined benefit pension plans.
As a NYSLRS member, you are part of a defined benefit plan, also known
as a traditional pension plan. Your pension is a lifetime benefit based on
years of service and earnings. It is not based on your individual contributions
to the Retirement System.
With defined contributions plans, such as 401(k)-style
retirement savings plans, the employer, employee
or both make contributions to an individual retirement account. The money in
the account is invested, and the amount the employee has at retirement is based
on investment returns. A market downturn can affect the value of the benefit
and employees risk outliving their money.
When Retirement Benefits Get Reduced
In an effort to cut costs, some state and local governments have replaced
defined benefit plans with defined contribution plans. But these moves have had
The Institute’s study cites the experience of Palm Beach, Florida,
which gutted its defined benefit plan. The town soon realized that it was
spending large sums to recruit and train new police officers, only to see them
move to nearby communities with better benefits. The town reconsidered and
improved its pension plan.
Then there’s the case of West Virginia, where officials found that switching to a defined contribution plan for teachers actually cost more money. Because the traditional pension plan stopped receiving contributions from new teachers and their employers, it became harder for the state to meet its pension obligations. After 14 years, the state went back to offering a defined benefit plan to all new teachers. Teachers already in the 401(k)-style plan were allowed to switch to the traditional plan, and 79 percent made the switch. State officials project that the return to a defined benefit system will save them $1.2 billion in the first 30 years.
Meanwhile, Alaska is still struggling with its decision to drop its defined benefit plan. A report by the Alaska Department of Public Safety cited “the inability to provide a defined benefits retirement system” as a factor in the “critically low staffing levels” for Alaska state troopers.
The Fund was valued at $210.5 billion at the end of the fiscal year. The average return on Fund investments was 5.23 percent for the year.
But NYSLRS is more than just the pension fund. The system had 658,176 members as of March 31, including county workers, professional firefighters and State troopers. Here are some facts about them:
NYSLRS’ 533,610 active members (that is, members still on a public payroll) work for 3,020 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.
Nearly 39 percent of all NYSLRS members are in Tier 6. (But more than 62 percent of PFRS members are in Tier 2.)
NYSLRS Retirees and Beneficiaries
The average pension for an Employees’ Retirement System (ERS) retiree was $24,345; the average for a Police and Fire Retirement System (PFRS) was $52,804. 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, $10.3 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 2019 Comprehensive Annual Financial Report (CAFR). NYSLRS received a Certificate of Achievement for Excellence in Financial Reporting for the 2018 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 15 years.
January is a great time to set goals for the coming year. And setting pre-retirement goals is crucial in planning for a successful retirement. Here are five goals to consider for 2018:
1. Choose a sensible savings plan that works for you.There are several ways to save for retirement, including starting a deferred compensation plan like the New York State Deferred Compensation Plan. An important part of developing a savings plan is to start early. The sooner you start saving, the more time your money has to grow. Check out our Weekly Investment Plan chart to see how a weekly investment can grow by age 65.
2. Track your expenses and income. Tracking your current expenses for a month or two will give you a better idea of how much you’re likely to spend in retirement and how much you’ll need to supplement your pension. Use the expense and income worksheets on our website to create a retirement budget. Be sure to include periodic expenses, such as car insurance and property taxes.
3. Request a pension estimate. If you’re within 18 months of your anticipated retirement date, it’s a good idea to request an estimate of what your retirement benefit will be. You can do this by sending us an email using our secure contact form or by calling 1-866-805-0990 (518-474-7736 in the Albany, NY area). If you are not certain that you’ve received credit for all your public service in New York State, you can submit a Request for Estimate form (RS6030) and be sure to provide detailed information about your public employment in section eight of the form. If your planned retirement date is farther away, you may want to use our online Benefit Calculator. This estimates your pension based on information you provide, so have your Member Annual Statement handy before you start, or sign in to your Retirement Online account to check your current service credit.
4. Pay off any NYSLRS loans. An outstanding loan balance at retirement will permanently reduce your NYSLRS retirement benefit. You cannot make loan payments after you retire, and the pension reduction does not go away after we recover the balance of the loan. Visit the Loans page on our website for information about making additional payments or increasing your loan payment amount.
5. Consider seeking the advice of a financial planner. Financial planners don’t manage your money, but can help you assess your present financial condition and develop a practical plan to meet your specific goals and needs. Also consider doing your own research by seeking Do-It-Yourself financial planning guides on the web.
If you ever have any retirement-related questions, please contact us.
Since taking office, New York State Comptroller Thomas P. DiNapoli has fought against the abuse of public funds. One of his top priorities is to protect the New York State and Local Retirement System (NYSLRS) from pension scammers.
To date, DiNapoli’s investigations of retirement fraud have led to 24 arrests and the recovery of nearly $3 million in retirement funds. Here are some cases from earlier this year:
Woman Pleads Guilty to Theft of Dead Mother’s Benefits
A Madison County woman pleaded guilty to a felony grand larceny charge for collecting $67,000 of her dead mother’s NYSLRS pension checks. When her mother died in 2009, Tammy Banack did not inform NYSLRS or her bank, and her mother’s pension checks continued to be deposited in a joint checking account. Banack agreed to repay the stolen pension benefits and received five years’ probation.
Man Pleads Guilty to Stealing Pension Checks
A Brooklyn man was arrested for cashing over $22,000 of his mother’s NYSLRS pension checks after she died. Jimmie Buie pleaded guilty and was sentenced to up to three years in prison. He was also ordered to repay the money. The office of New York State Attorney General Eric T. Schneiderman assisted in this case and the Banack case.
Town Clerk Admits Faking Retirement Benefits
Following a review of monthly retirement reports, the Office of the State Comptroller discovered that a town clerk had been unlawfully using a town computer to inflate her retirement service credit. Springport Town Clerk Deborah Waldron pleaded guilty, resigned and paid fines and surcharges. Her actual hours and benefits were recalculated to ensure she does not receive extra money she did not earn.
Brother Guilty of Bank Larceny in Pension Scheme
Joseph F. Grossmann, a former Albany resident, pled guilty to Bank Larceny after he used fake documents and other schemes to collect $130,624 in his deceased sister’s name. He was sentenced to three years of probation (including one year of home confinement) and ordered to pay back the money.
Unfortunately, research and statistics tend to back up these dire warnings. According to the Pew Charitable Trusts, a significant portion of Americans — 42 percent — lack access to an employer-sponsored retirement plan such as a 401(k), 403(b) or 457(b). Among those whose employers do offer a plan, only 49 percent actually participate.
There is promising news about retirement, though, if you look for it. Americans — particularly Millennials (those born 1979 through 1996) — are starting to save for retirement much sooner than previous generations. According to the TransAmerica Center for Retirement Studies, Millennials begin to put away for retirement at a median age of 22. Generation X workers waited until 27, and Baby Boomers didn’t start until age 35.
Perhaps this earlier focus on saving is responsible for other good news. For example, Fidelity Investments reports record 401(k) balances in 2016: $92,500 at the end of the fourth quarter, which is up $4,300 from 2015. And, earlier this year, the Employee Benefit Research Institute found that 55.4 percent of investors — more than ever before — are maxing out their individual retirement account (IRA) contributions.
That said …
Americans do have a retirement problem. New York State Comptroller Thomas P. DiNapoli speaks regularly about the need for policies at the state and federal levels of government to ensure retirement security for everyone, including workers in the private sector.
As individuals, the solution is simple: We need to save, and we need to start early. NYSLRS members have the rare advantage of a well-funded, defined-benefit pension. However, your pension and Social Security benefits are only part of a well-rounded financial plan. Consider contributing to a New York State Deferred Compensation Plan (NYSDCP) account. NYSDCP is a voluntary retirement savings plan — similar to private sector 401(k) or 403(b) plans — created for employees of New York State and other participating employers. If you work for a local government employer, please check with your human resources administrator to find out what savings plans are available to you.
Saturday is Earth Day. Since 1970, April 22 has been set aside as a day to draw attention to environmental issues. Today, 47 years after the first Earth Day, we face perhaps the greatest threat to the planet: climate change as a result of carbon emissions.
As trustee of the New York State Common Retirement Fund (CRF), Comptroller Thomas P. DiNapoli seeks sound and sustainable investments in strategies and companies that are developing and using low-carbon technologies.
The CRF’s investments in New York-based companies such as Crystal IS in Green Island and the High Sheldon wind farm in Sheldon are examples of low-carbon investment opportunities that provide solid returns for the Fund, create jobs and generate local tax revenues, while helping promote a lower carbon economy.
As an investor, DiNapoli continually seeks improvements in environmental practices and lower carbon emissions from the companies in the CRF’s portfolio. For example, he has asked ExxonMobil* and other portfolio companies to explain how they can adjust their business model to meet the worldwide effort to limit global warming, and has urged the Securities and Exchange Commission to ask fossil fuel companies to explain how they are addressing climate change. The CRF has created a $2 billion public equity index that excludes or reduces investments in the worst carbon emitting corporations, and increases CRF’s investments in companies that are lower emitters. In addition, DiNapoli has increased the CRF’s total commitment to sustainable investments to $5 billion to take advantage of the growing low carbon economy.
The Comptroller’s sustainable investment strategy is crucial to the long-term health of the CRF. Addressing investment risks presented by climate change is a major part of that strategy. Rising seas, severe storms, floods and droughts are likely to disrupt the global economy. Moving toward a low carbon future reduces risk to the CRF’s investments, spurs innovation and opens new investment opportunities.
“I am pleased Exxon has agreed to undertake this important analysis,” said DiNapoli. “Climate change is one of the greatest threats to our pension fund’s long-term value. Exxon’s decision demonstrates that investors have the power to hold corporations accountable and to compel them to address our very real climate-related concerns. We will continue to monitor Exxon’s response to climate change as we urge the company, and others in the energy sector, to find ways that they can adapt to the growing lower carbon economy.”
Where did you go? Not far, it turns out. Seventy-eight percent of NYSLRS retirees and beneficiaries stay in New York State. However, the rest have made homes around the country and even around the world.
It’s all about becoming vested, earning enough service credit to qualify for a pension benefit — even if you leave public employment. We went through the ins and outs of becoming vested for members of both the Employees’ Retirement System (ERS) and the Police and Fire Retirement System (PFRS).
You won’t need to pay New York State or local taxes on your NYSLRS retirement benefit, but other states and federal income tax are another matter. We gave members and retirees some insight into federal tax withholding and the 1099-R form.
A solid lead up to retirement is essential, but picking the right retirement date is important too. We gave members some tips about when to submit their applications, how to pick a date and what their first benefit payments will look like.
NYSLRS members are spread out over two systems, six tiers and 346 retirement plan combinations. It can be easy for information to get jumbled between coworkers and between plans. So, we cleared up some common misconceptions we’ve heard from members and retirees over the years. This is an entry in our Retirement Myths series.
The better you understand your road to retirement, the better you can plan for it. We took a look at the journey for Tier 3 and 4 ERS members and pointed out several retirement benefit milestones they’ll pass along the way. We also took a look at Tier 5 and Tier 6 member milestone, too.
Under the direction of Comptroller DiNapoli, NYSLRS has put in place a system of safeguards designed to prevent and identify potential incidents of pension fraud. One such safeguard uses data analytics to uncover and stop improper payments.
Post-Retirement Employment Violations
Our investigative efforts include a focus on post-retirement employment. New York State law restricts the amount of money public sector retirees can earn if they return to public service employment after retirement. The law permits public sector retirees under the age of 65 to earn up to $30,000 per year from public employment before their pension benefits are suspended.
As of this March, our review of post-retirement employment cases have uncovered more than $700,000 in benefit payments subject to recovery. For example, a former Newburgh City Fire Chief, who double-dipped by collecting $95,000 in pension payments while still working as fire chief, was federally convicted.
The “Muscle” in the Pension Fraud Fight
In some cases, the pension fraud NYSLRS uncovers gets referred to Comptroller DiNapoli’s wider umbrella program to root out public corruption and fraud involving public funds. The Comptroller’s aggressive initiative included partnering with federal, state and local prosecutors and law enforcement statewide, including DiNapoli’s groundbreaking “Operation Integrity” task force with Attorney General Schneiderman. To date, Comptroller DiNapoli’s various partnerships have garnered more than 130 arrests and $30 million in ordered recoveries.
NYSLRS’ partnership with DiNapoli’s “Operation Integrity” has resulted in the investigation, prosecution and recovery of stolen pension payments, exposing $2.75 million in pension fraud in recent years.
Here are some recent cases where pension scammers have been thwarted:
Comptroller DiNapoli and NYSLRS will not tolerate pension fraud. These arrests and convictions serve as warnings to those who might steal pension benefits: if you think you can steal the hard-earned benefits of NYSLRS members and retirees, you are gravely mistaken. When fraud is identified, Comptroller DiNapoli will work with law enforcement to hold the pension scammers accountable. The clear message to anyone who tries to defraud our pension system is that you will be found, and you will pay.
If you suspect someone of pension fraud, call the Comptroller’s toll-free Fraud Hotline at 1-888-672-4555, file a complaint online at firstname.lastname@example.org, or mail a complaint to: Office of the State Comptroller, Division of Investigations, 14th Floor, 110 State St., Albany, NY 12236.