Monthly Archives: October 2017

Age Milestones for Retirement Planning

Age Milestones for Retirement PlanningWhether you’re 22 or 52, you should be planning for retirement.

NYSLRS retirement benefits are based on tier status, years of service, and average salary. Age is also an important number, and not just the age when you plan to retire. Here are some age milestones to keep in mind while planning for your retirement.

Under 50: It’s never too early to start saving for retirement. Even modest savings can add up over time as investment returns grow and interest compounds.

50: The Age 50 and Over Catch-Up provision allows you to save more pre-tax dollars in a retirement account starting in the calendar year in which you turn 50.

55: The earliest age most NYSLRS members can retire. (Does not apply to members in special retirement plans.) Your pension may be permanently reduced if you retire at 55.

59½: The age you can draw down money from a tax-deferred retirement savings plan, such as an IRA, without facing a potential federal tax penalty. (The penalty does not apply to New York State Deferred Compensation savings if you are retired or have left public service.)

62: Full service retirement age for Tiers 2, 3, 4 and 5 and PFRS Tier 6. Earliest age you can begin collecting a Social Security pension, but the benefit would be reduced. For more information, read When to Start Receiving Retirement Benefits.

63: Full retirement age for ERS Tier 6 members.

65: Age most people are eligible for Medicare benefits.

66: Full Social Security retirement age if you were born from 1943 through 1954. Add two months for each year from 1955 through 1959.

67: Full Social Security age if you were born in 1960 or later.

70: If you do not take your Social Security benefit at full retirement age, your benefit will increase each year until you reach age 70. Delaying Social Security after 70 will not increase your benefit.

70½: If you have tax-deferred retirement savings and are no longer working, you must begin withdrawing some of this money after you turn 70½.

One Last Number: Having a rough idea of your life expectancy is essential to retirement planning.

For more information about retirement planning, read our publication Straight Talk About Financial Planning For Your Retirement.

Know Your Benefits: Disability Retirements

Many of us dream about retirement, but not one of us pictures leaving the workplace because we can’t perform our duties anymore. Yet the truth is debilitating medical conditions do happen. Though we hope you never have to use them, NYSLRS members have certain benefits available should you become permanently disabled from performing the duties of your job.

This post is an overview of common disability benefits and how to file for them. It is important to review your retirement plan booklet for specific benefit and eligibility information, and contact us with any questions you have, before you file an application.

Disability Retirements

Benefits

Most members are eligible for what’s called an ordinary disability retirement benefit. Usually, it provides whichever is greater:

  1. 66 percent of your final average salary (FAS) for each year of credited service; or
  2. 66 percent of your FAS for each year of credited service, plus 1.66 percent of your FAS for each year of service you might have earned before age 60, up to one-third of your FAS.

To qualify for an Article 15 disability retirement benefit, you must have at least ten years of credited service, unless your disability results from an accident you sustain on the job. If your disability results from an on-the-job accident, not due to your own willful negligence, there is no minimum service requirement.

Some members have plans that may provide an accidental disability retirement benefit. The benefit amount varies depending on your system (Employees Retirement System or Police and Fire Retirement System), tier and plan. It’s a lifetime benefit, but may be reduced by amounts received from workers’ compensation or Social Security. There is no minimum service requirement for an accidental disability retirement.

“Accident” has a special meaning when used in connection with Retirement System disability benefits. Whether an incident is an “accident” is determined on a case by case basis, using court decisions for guidance.

Members of the Police and Fire Retirement System as well as some members of the Employees Retirement System, such as sheriffs and correctional officers, may be entitled to a performance-of-duty disability benefit. The benefit amount and eligibility requirements vary depending on your system, tier and plan.

Filing

You, your employer, or someone you authorize may file a disability application on your behalf. If you think you might be eligible for a disability retirement, you may want to file your application sooner, rather than later, because there are strict filing deadlines that must be met. If you meet the requirements for a service retirement too, you can apply for both at the same time. If your disability application is approved, you will be able to choose which benefit you accept.

World Trade Center Presumption

If you participated in World Trade Center rescue, recovery or clean-up operations, you may be eligible to apply for a benefit under the World Trade Center Presumption Law. The deadline for members to file a notice with NYSLRS has been extended to September 11, 2018.

Resources/More Information

For specific benefit and eligibility information, be sure to read your retirement plan booklet on our Publications page. Also, check out our Disability Retirements page and our VO1802 Life Changes: Applying for Disability Retirement booklet. You can reach our Call Center by email using our secure contact form or toll-free at 1-866-805-0990 (518-474-7736 in the Albany, New York area).

NYSLRS’ Membership by Tier

NYSLRS, comprised of the Employees’ Retirement System (ERS) and Police and Fire Retirement System (PFRS), had 652,324 members as of March 31, 2017. Our members are State, local government and school district employees from across New York, including 617,143 in ERS and 35,181 in PFRS. Eighty-one percent of our members are active, which means they were on a public payroll as of March 31.

As new public employees come on board and more Tier 3 and 4 members reach retirement age, Tier 6 is expected to represent the majority of NYSLRS members in a few years.

Tier 6 includes members who joined NYSLRS since April 1, 2012. In just five years, they’ve grown to more than 174,000 members, making up 26.7 percent of total membership.

Here’s a look at our membership by Tier, as of March 31:
NYSLRS' Membership
Tier 1: NYSLRS’ oldest tier, whose members first joined the system before July 1, 1973 (July 31 for PFRS members). Tier 1 now represents only one half of 1 percent of our membership. There are only 54 Tier 1 PFRS members remaining.

Tier 2: With 29,186 members, Tier 2 represents 4.5 percent of membership. More than 87 percent of Tier 2 members are in PFRS.

Tier 3&4: Tiers 3 and 4, which have similar retirement plans, represented nearly 90 percent of membership just seven years ago. The 392,699 Tier 3 and 4 members now make up 60 percent of the total. (Note: There is no Tier 4 in PFRS.)

Tier 5: Tier 5 covers members who joined in a period of a little over two years (January 2010 through March 2012). With 53,118 members, Tier 5 now represents 8.1 percent of membership.

Tier 6: This tier covers both ERS and PFRS members who joined since April 1, 2012. Its ranks have grown by nearly 29 percent over the past year.

A Look Inside NYSLRS

Want an inside view of NYSLRS and the New York State Common Retirement Fund (Fund)? Curious about how the Fund is managed and how well its investments are performing? Then check out the latest Comprehensive Annual Financial Report (CAFR).

The 2017 CAFR, which covers the state fiscal year that ended on March 31, 2017, is chock full of facts and figures that offer a detailed look at the Retirement System and the Fund. The biggest story is the financial health of the Fund. The Fund’s assets were valued at $192.4 billion at the end of the fiscal year and continued to grow, reaching an estimated value of $201.3 billion as of September 30, 2017. The average return on Fund investments in fiscal year 2017 was 11.48 percent, well above the long-term expected rate of return of 7 percent.

The soundness of NYSLRS was confirmed by several recent independent studies, which concluded that the New York State’s pension system is one of the best-funded public pension systems in the nation. And that means NYSLRS’ 652,324 members and 452,455 retirees and beneficiaries can rest assured their pensions will be there for them in retirement.

A Look Inside NYSLRS

The average pension for an Employees’ Retirement System (ERS) retiree was $23,026; the average for a Police and Fire Retirement System was $49,123. In all, NYSLRS paid out $11.3 billion in benefits during the fiscal year. (Fund investment earnings covered 75 percent of the cost of these benefits.) But NYSLRS pension payments don’t just benefit the system’s retirees and beneficiaries. Because 78 percent of NYSLRS retirees and beneficiaries live in New York, $9.1 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

NYSLRS received a Certificate of Achievement for Excellence in Financial Reporting for the 2016 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 13 years.