There may come a time when you leave public employment. Even though you’d no longer work for a New York public employer, you’d still be a NYSLRS member. If you ever leave public employment, you should be aware of the effect it could have on your membership and benefits.
What Happens to My Contributions If I Leave Public Employment?
If you have less than ten years of service credit, you may end your membership and request a refund of your contributions by filing a Withdrawal Application (RS5014) .
If you are not vested (eligible for a retirement benefit) and do not withdraw your contributions, they will continue to earn 5 percent interest for seven years. After seven years, if you are still off the public payroll, your membership will automatically end and your contributions will be deposited into a non-interest-bearing account. Your contributions will not be automatically refunded.
How Will Leaving Public Employment Affect My Death Benefits?
If you have at least ten years of service credit, 50 percent of your death benefit may still be payable if you die after leaving public employment. If you have less than ten years of service credit, the 50% death benefit is only available to you if you die within one year of leaving public service.
How Can I Pay Back My Outstanding Loans?
If you have any outstanding NYSLRS loans when you leave the public payroll, you must make payments directly to NYSLRS at least once every three months. You must repay your loan within five years of the date it was issued or you will default on the loan. Please note: since you will be required to pay ordinary income tax and possibly an additional 10 percent penalty on the taxable portion of the loan, defaulting on a loan carries considerable tax consequences.You also won’t be eligible to take a NYSLRS loan once you are off the public payroll.
How Can I Stay Informed About My Membership If I Leave Public Employment?
If you leave public employment, but haven’t ended your NYSLRS membership, you’ll still:
- Receive a Member Annual Statement each year.
- Be able to request an estimate of your pension.
- Be able to meet with an information representative at any of our consultation sites.
You’ll also need to keep your membership information updated. This includes information like:
- Keeping your beneficiary information current.
- Notifying us of name and address changes (for both you and your beneficiary).
- Filing an Application for Service Retirement (RS6037) if and when you are eligible to retire. (We will not pay out a retirement benefit unless you apply for it.)
Read our publication Life Changes: What if I Leave Public Employment? (VO1800) for more information.