Retirees: Know Your Post-Retirement Earnings Limit

forjuly1As a New York State and Local Retirement System (NYSLRS) retiree, it’s possible to work a public job after retirement and receive your pension, but there are limits to your post-retirement earnings. If you’re self-employed, work for a private employer, work for another state, or work for the federal government, you don’t have to worry about post-retirement earnings. You can earn as much as you want in your new job and still collect your full NYSLRS benefit.

But if you collect a NYSLRS pension and want to return to work in the public sector, there are two sections of the Retirement & Social Security Law (RSSL) you have to comply with that deal with post-retirement earnings.

Section 212

Under Section 212 of the RSSL, you may earn up to the annual amount set by law. The limit for 2015 is $30,000. Typically, your earnings are not limited in the year you reach age 65.

However, if you are under the age of 65 and earn more than the Section 212 limit during a calendar year, you may:

  • Pay back NYSLRS an amount equal to the retirement benefit you received after you reached the mandated limit. If you continue to work, your retirement benefit will be suspended.

OR

  • Rejoin NYSLRS, in which case your retirement benefit will stop.

Section 211

If you return to work and earn more than the Section 212 limit, your pension will be suspended unless your public employer requests a Section 211 approval for you. This will allow you to continue receiving your retirement benefit without reduction.

Section 211 approvals are given for a fixed period of time, normally up to two years.

If you earn more than the Section 212 limit and do not get Section 211 approval, your benefit will be reduced or suspended.

If you have questions about working after retirement, please read our publication, What If I Work After Retirement? (VO1648).

Dual Membership in NYSLRS

As a New York State and Local Retirement System (NYSLRS) member, you’re either part of the Employees’ Retirement System (ERS) or the Police and Fire Retirement System (PFRS). In some cases, however, it’s possible to have a dual membership, or be a member of both systems. As of last year, 3,392 members had memberships in both ERS and PFRS.

How Does Dual Membership Work?

You can be a member of more than one retirement system if you hold a different position in each system. Let’s say you work as a fire fighter—this would mean that you’re already a member of PFRS. One day, 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. After you fill out the membership application, you’re now an ERS member, while at the same time being a PFRS member.

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

There are other implications to dual membership as well. Assuming you met the service credit and age requirements, you could retire from both systems. You’d need to file a separate retirement application for ERS and PFRS, and we’d work on calculating each pension. We’d calculate your ERS pension using the final average salary (FAS) you earned while working as a bus driver. We’d then use the FAS you earned as a fire fighter to calculate your PFRS pension.

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

Dual membership in NYSLRS is nothing fancy—just make sure to follow your retirement plan in each system.

If you have any questions about dual membership, please contact us.

Income Inequality and Pension Reform

Is the shift away from defined benefit pension plans hurting more than helping?

Today’s pension reform means increasing employee contributions, cutting pension benefits, and switching from defined benefit (DB) plans to defined contribution (DC) plans. In fact, according to a new study from the National Conference on Public Employees Retirement Systems (NCPERS), 15 million additional workers would have defined benefit plans if there had not been a trend over the past 30 years to convert pensions into defined contribution (DC) plans. However, there may be a hidden cost to this approach. As these reforms negatively affect plan participants and beneficiaries, income inequality appears to increase.

In the study, NCPERS looks at the growing debate between DB and DC plans. Those in favor of DC plans claim that DB public pension plans aren’t sustainable and taxpayers can’t afford to pay them. Others defend DB pensions, arguing the pension benefits are a type of deferred compensation and not the responsibility of taxpayers. Regardless of what side of the debate you’re on, here’s the hard reality:

  • In a DB plan, the employee receives a lifetime benefit based on years of service and salary.
  • In a DC plan, there’s no guarantee the employee will have enough or any retirement income upon retirement.

Income Inequality Worsening for Seniors

Despite the positive aspects of DB pensions, the trend against them continues, and the effects could be damaging. Several studies mentioned by NCPERS point out the reduction of retirement benefits and the shift away from DB pensions increase income inequality—even poverty—in the elderly. One study from the National Institute on Retirement Security (NIRS) found that poverty rates in senior citizen households without pensions were almost nine times higher than those with pensions.Income Inequality: The Elderly Poverty Rate is 9 times greater with no defined benefit income

The Economic Impact of NYSLRS Retirees

These are startling findings, considering the important role of pensions and retiree spending in the economy. In the US, retirees spend almost $838 billion each year, which employs millions of Americans and tens of millions indirectly. For every dollar paid in pension benefits, there’s $2.37 in economic output. In New York, retirees play an important role in the state economy. New York State and Local Retirement System (NYSLRS) retirees generate $11.3 billion in economic activity by spending $9.6 billion in the state. The pension benefits earned by NYSLRS retirees flows directly back into the local communities and economies.

As more negative changes affect DB pension plans and retiree benefits, the decrease in retiree spending will be felt throughout the economy.

“Personal income loss has a ripple effect, and everyone suffers when income inequality rises and economic growth weakens,” said NCPERS President Mel Aaronson. “Spending by retirees is vital to communities, yet local spending can easily be undermined by shortsighted changes to defined benefit pension plans.”

New York State Comptroller Thomas P. DiNapoli, Administrator of NYSLRS and sole trustee of the Common Retirement Fund, has often said that DC plans would put more people at risk in their retirement years. During an editorial board meeting of The Syracuse Post Standard last October 20, he also maintained that switching to a defined contribution plan won’t change the state’s obligation to provide a pension to the 1 million people already in the system. “A 401(k) was never meant to be the substitute for a pension,” DiNapoli said.

Protecting the Pension System

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. With the help of New York State Attorney General Eric Schneiderman, DiNapoli has restored $6 million to the pension system.

Earlier this year, they charged a Polk County, Florida woman with the theft of $120,000 from the pension system. The woman didn’t notify NYSLRS about her uncle’s death, and took out the pension benefits paid to his bank account for 12 years.

“Attorney General Schneiderman and I will continue our partnership to protect public money, including the retirement funds that so many New Yorkers depend upon,” DiNapoli said.

Here are some other pension scamming cases from May:

Defendant Accused of Stealing Deceased Mother’s Benefits

A New Jersey woman allegedly stole over $162,000 in pension benefits. According to the Comptroller and Attorney General’s Office, she failed to notify NYSLRS of her mother’s death. As a result, she continued to receive her mother’s benefits for six years even though her mother didn’t list her as a beneficiary.

If convicted, she could face up to five to 15 years in state prison.

Man Accused Of Stealing Deceased Godfather’s Retirement Benefits

A New Jersey man allegedly stole $78,000 in pension benefits payable to his godfather. When his godfather died in 2003, his godfather’s wife collected the benefits until her death in 2006. The man did not notify NYSLRS of their deaths, and used his power of attorney to access their bank account. He withdrew the pension benefits for six years.

If convicted, he could face up to five to 15 years in state prison.

Double-Dipping Retiree Owes Almost Half a Million Dollars

A retired police officer will repay $456,647 to NYSLRS. From 1996 to 2012, the retiree received a pension while earning a full-time salary at a public community college. Even though he knew of the retiree earnings limit, he exceeded it and didn’t report his public income to the state.

The retiree forfeited all future pension payments he would have earned, and will use them to pay back his debt.

If you want to learn more about how Comptroller DiNapoli safeguards public funds, visit the Comptroller’s Fighting Public Corruption page.

NYSLRS Retirees: 1% COLA Payment Coming September 30

If you’re a New York State and Local Retirement System (NYSLRS) retiree, you may be eligible for a cost-of-living adjustment (COLA) this September. A COLA payment permanently increases* your NYSLRS retirement benefit. It’s based on the cost-of-living index, and is designed to address inflation as it occurs. The September 2015 COLA payment equals 1.0 percent, for a maximum annual increase of $180.00, or $15.00 per month before taxes.

How is the COLA Payment Calculated?

The COLA payment is calculated based on 50 percent of the annual rate of inflation, measured at the end of the fiscal year (on March 31). It cannot be less than 1 percent or greater than 3 percent of your retirement benefit. The COLA is calculated using the first $18,000 of the annual Single Life Allowance pension (even if you selected a different payment option), or the actual pension, if less than $18,000.

Who Is Eligible for a COLA Payment?

In order to receive your COLA, you must be:

  • Age 62 or older and retired for five or more years; or
  • Age 55 or older and retired for ten or more years (for uniformed employees such as police officers, firefighters and correction officers covered by a special plan that allows for retirement, regardless of age, after a specific number of years); or
  • A disability retiree for five years; or
  • The spouse of a deceased retiree receiving a lifetime benefit under an option elected by the retiree at retirement. (Eligible spouses are entitled to half the COLA amount that would have been paid to the retiree when the retiree was eligible); or
  • A beneficiary receiving the accidental death benefit for five or more years on behalf of a deceased Retirement System member.

SSA COLA

The COLA a NYSLRS retiree receives is different than the COLA the United States Office of Social Security provides retirees. More than 58 million Social Security recipients began receiving a 1.7 percent COLA in January 2015.

If you want to learn more about COLA, read our publication, Permanent COLA.


*Please note: There are other deductions, such as health insurance, which may offset the COLA increase.


NYSLRS – One Tier at a Time: PFRS Tier 1

When you joined the New York State and Local Retirement System (NYSLRS), you were assigned to 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 series, NYSLRS – One Tier at a Time, walks through each tier and gives you a quick look at the benefits members are eligible for before and at retirement.

Today’s post looks at Tier 1 in the Police and Fire Retirement System, which has only 123 members. PFRS Tier 1 represents the smallest percentage – 0.4 percent – of NYSLRS’ total membership.

PFRS-Tier-1-Benefits_002

If you’re a PFRS Tier 1 member, you can find your retirement plan publication below for more detailed information about your benefits:

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

Retirement Savings and Confidence Continue to Decline

A new National Institute on Retirement Security (NIRS) report reveals that the median retirement account balance has dipped to $2,500 for working age American households, down from $3,000.

NIRS researchers discovered that some 62 percent of working households age 55–64 have retirement savings less than one times their annual income, which is far below what Americans need to be self-sufficient in retirement. NIRS reported that the typical near-retirement working household only has about $14,500 in retirement savings.

Retirement-CrisisEven after counting households’ entire net worth, the report revealed that two-thirds (66 percent) of working families still fell short of conservative retirement savings targets for their age and income, based on working until age 67.

Retirement Crisis Feared By Many

Another NIRS report found that an overwhelming majority of Americans – 86 percent – believe that the nation faces a retirement crisis. Nearly 75 percent of Americans are concerned about their ability to achieve a secure retirement. Some 82 percent say a pension is worth having because it provides steady income that won’t run out, while 67 percent indicate that they would be willing to take less in salary increases in exchange for guaranteed income in retirement.

Comptroller DiNapoli’s Position On Retirement Security

New York State Comptroller Thomas P. DiNapoli, the administrator of NYSLRS and trustee of the Common Retirement Fund, has long addressed the topic of retirement security and called it “an issue that we have to confront.” In remarks he delivered last June during a Retirement Summit at The New School’s Schwartz Center for Economic Policy, the Comptroller called attention to the “staggering” national retirement savings shortfall that’s between $7 trillion and $14 trillion.

Comptroller DiNapoli is encouraging “not just a discussion of the race to the bottom, but a broader discussion about retirement security.”

The NYSLRS Member Annual Statement

We started mailing our 2015 Member Annual Statements last week. The mailing takes approximately six to eight weeks to complete. Most members typically receive their statement by mid-July.

Your Statement contains important information about your NYSLRS membership, including your reported salary, service credit and beneficiaries. Depending upon your own circumstances, your Statement may also contain information about projected annual benefits, loan balances and past service account balances.

When You Receive Your Statement

Your Statement is automatically mailed to your employer, who is responsible for distributing it to you. (If you’ve left public employment, we mail your Statement to the home address we have on file for you.) When you receive your Statement, be sure to review it carefully. Your Statement is a valuable tool that can help you plan for retirement, so you should verify that the information in it is accurate. You can contact us to correct most errors, but if you have a question about your reported salary, you should contact your employer.

Member ID Cards

Your Statement also includes a Member Identification Card. Your Member ID Card contains the registration number you have been assigned within NYSLRS. Please use this number, rather than your Social Security number, whenever you contact us.

By limiting the use of your Social Security number, you’re helping us protect you and your personal information. And with incidences of identity theft so prevalent in society, we’re committed to ensuring the safety of that information.

When you receive your Statement, be sure to clip out your Member ID card and save it in a secure and easily accessible place so your registration number will always be handy.

What If You Have Questions About Your Statement?

 The Member Annual Statement Overview and Tutorial requires Adobe Flash Player version 11.4 or later. You must have at least this version installed on your computer to view this presentation.Our website features a special interactive, online presentation about the Member Annual Statement. It offers a page-by-page explanation of your Statement, and also contains answers to additional Frequently Asked Questions. You can view the entire presentation, or go directly to the information you need.

For more information about your Statement, you can contact us via this email form. One of our representatives will respond back to you within 3 to 5 business days.

This is 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 (PSRW) was created in 1985 to honor the men and women who serve our nation as federal, state, county and local government employees. Congress officially designated the first week of May as PSRW. This year, it is being celebrated May 3 through May 9.

PSRW publicly honors all the men and women who dedicate their careers – and sometimes their lives – to keep others safe and provide for the common needs of our society. These individuals strive to help make life better in our communities.

The Public Servants of NYSLRS

NYSLRS is a public retirement system full of stories about State workers and municipal employees finding value and meaning in the work they do, especially when they help another New Yorker. These are stories you may not read or hear about, because to some public employees, they’re just doing their job.

Whether they are picking up our garbage, educating our children, or cleaning our roads during snowstorms, NYSLRS members deliver the critical resources and services many New Yorkers depend on. Likewise, many NYSLRS members and retirees also 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:

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: