Tag Archives: benefits

Protecting the Pension System

Protecting the Pension SystemSince 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.

To learn more about how Comptroller DiNapoli safeguards public funds, and how you can help, visit the Comptroller’s Fighting Public Corruption page. You can also read about past pension fraud investigations.

Update Your Beneficiaries

It’s easy and important

How long has it been since you thought about your NYSLRS beneficiaries? A year, two years, five? Did you get married since then? Get divorced? Have a child?

When you die, your NYSLRS death benefit will be paid to the last beneficiaries you designated. That’s the law. That’s why it’s so important that you check your NYSLRS beneficiary designations periodically.

Luckily, it’s easier to do than ever.

The new Retirement Online is a convenient way to review account details and conduct business with NYSLRS in real time. Now, instead of sending a form through the mail, you can simply sign in to Retirement Online to view your designations and submit changes instantly.

Register and sign in to Retirement Online today to update your beneficiaries and access a variety of other time-saving features.

Types of Beneficiaries

You can designate primary and contingent beneficiaries:

  • A primary beneficiary receives your death benefit. If you name more than one primary beneficiary, they will split the benefit equally.
  • A contingent beneficiary receives a benefit only if all your primary beneficiaries are deceased when you die.

Special Benefit Designations for Beneficiaries

Special Beneficiary Designations

Your beneficiary doesn’t have to be a person:

  • When you die, your estate is all the money and property you owned. If you make your estate a beneficiary, the executor of your estate will distribute your benefit according to your will. If you outlive both your primary and contingent beneficiaries, your benefit will go to your estate by default.
  • A trust is a legal arrangement giving a person you choose legal control over property — such as a death benefit. The trust itself would be your NYSLRS beneficiary, not the individuals for whom you established the trust. (You may want to speak with your attorney if you’re thinking about making your trust a beneficiary.)
  • You can name a charitable, civic, religious, educational or other kind of organization as a beneficiary too.

For more information about beneficiaries, check out our booklet, Why Should I Designate a Beneficiary? (VO1706).

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).

Four Facts about Divorce and Your Pension

Courts consider pensions marital property. So, if you file for divorce, a judge may award your ex-spouse part of your pension or other NYSLRS benefits. The process for dividing retirement assets after a divorce can be complex. Here are four things you need to know:

1. NYSLRS Requires a DRO

To divide your NYSLRS benefits, we need a domestic relations order (DRO). This court order, issued after a final judgment of divorce, gives us specific instructions on how your benefits should be distributed. NYSLRS provides on online fillable DRO that complies with the plan’s requirements for implementation. You are not required to use the online form; however, the System will give priority review to these DROs since the language is pre-approved.

2. A Judge has to Approve Your DRO

Before we can implement a DRO, a trial court judge must review and sign it, and you need to file it with the appropriate County Clerk’s Office. That can be a lengthy process; our Matrimonial Bureau can check your DRO for compliance with the law before you submit the draft order to the court. This way, if the DRO does not meet the requirements, you will have a chance to make revisions.

Once a judge does sign off, we’ll need a certified copy of the DRO and your judgment of divorce. We start payments to your ex-spouse once we’ve calculated and finalized your retirement benefit. If we receive the DRO and judgment before we finalize your retirement benefit, we’ll make retroactive payments back to your date of retirement.

3. Some Beneficiary Designations are Revoked

Reviewing your beneficiary designations periodically is always important, but after a divorce, it’s essential to make sure your benefits will be distributed according to your wishes. As of July 7, 2008, beneficiary designations for certain benefits are revoked when a divorce, annulment or judicial separation becomes final. Please read our Guide to Domestic Relations Orders and review our DRO FAQs before you finalize your divorce.

4. Contact an Attorney with DRO Experience

This last one is not a fact, but it’s a good idea. A lawyer, who’s worked with DROs previously, can help ensure the DRO you submit to the court fairly represents the intentions of both parties.

How Can NYSLRS Help?

We developed an online template  that makes it easier to create a properly formatted DRO. Just enter your tier, plan and employment status, and answer the questions that follow.

To submit your proposed DRO for review, email it, along with scanned copies of your judgment of divorce, to our Matrimonial Bureau at dro@osc.state.ny.us. For DRO proposals prepared using our online worksheet, the review process is simplified and we can complete our review faster.

If you have any questions about divorce and your benefits, please contact our Hearing Administration and Matrimonial Bureau staff.

Email: dro@osc.state.ny.us

Address:
NYSLRS 110 State Street
Mail Drop 7-9
Albany, New York 12244

Tier 6 Benefits – A Closer Look

Tier 6 members (those who joined NYSLRS since April 1, 2012) are eligible for a lifetime pension benefit with 10 years of credited service. And that pension can replace a portion of your salary throughout your retirement.

Your NYSLRS pension will be based on your Final Average Salary (FAS) and the number of years you work in public service. FAS is the average of the five highest-paid consecutive years. For most members, those higher-paid years come at the end of their careers. Since retirement is still some years in the future for most of you, we won’t focus on the dollar amount of your FAS today. But we can look at what percentage of that salary would be replaced by your pension if you continue in the system until retirement age.

For Tier 6 members of the Employees’ Retirement System (ERS), the benefit is 1.66 percent of your FAS for each year you work, up to 20 years. (Benefit calculations for members of the Police and Fire Retirement System vary based on plan.) At 20 years, the benefit equals 1.75 percent per year (for a total of 35 percent). After 20 years, the benefit grows by 2 percent per year.

Financial advisers say you will need to replace between 70 to 80 percent of your salary to maintain your lifestyle during retirement. Let’s see how we can get there.
Tier 6 Salary Replacement
NYSLRS Pension: Say you begin your career at age 30 and work until your full retirement age of 63. That’s 33 years of Service Credit. You’ll get 35 percent of your FAS for the first 20 years, plus 26 percent for the last 13 years, for a total benefit that would replace 61 percent of your salary. If you started at age 25, and continue till 63, you’d get 71 percent of your FAS. If you didn’t start till age 35, you’d still get 51 percent at 63.

Social Security: You also should factor in Social Security. We know, you may have heard that Social Security might not be there for you, but the situation isn’t that dire. According to the Social Security Administration, under current law, payroll taxes will cover about 79 percent of benefits by 2034. Social Security now replaces about 36 percent of the wages of a typical worker who retires at full retirement age. So even if benefits take a hit – and that’s a big IF – Social Security might still replace around 25 to 30 percent of a typical worker’s pay.

Savings: Retirement savings can also replace a portion of your income. How much, of course, depends on how much you save. The key is to start saving early so your money has time to grow. If you haven’t already looked into the New York State Deferred Compensation Program, please consider doing so now.

Spending Changes in Retirement

Just like starting your first job, getting married or having kids, retirement will change your life. Some changes are small, like sleeping in or shopping during regular business hours. Others, however, are significant and worth examining ahead of time…like how much you’ll spend each month or each year.

An Employee Benefit Research Institute study offers some good news for prospective retirees. Household spending generally drops at the beginning of retirement — by 5.5 percent in the first two years, and by 12.5 percent in the third and fourth years. On the other hand, a significant portion of households — nearly 46 percent — actually spend more in the first two years of retirement.

So, have you considered how you’ll spend money once you retire?

Prepare a Post-Retirement Budget

Like a fiduciary choir, financial advisors all sing the same refrain: Start young; save and invest regularly to meet your financial goals. If you do, making the switch from saving to spending in retirement can be easy. But, in order to plan, you need a budget.

The first step toward a post-retirement budget is a review of what you spend now. For a few months, track how you spend your money. Don’t forget to include periodic costs, like car insurance payments or property taxes. By looking at your current spending patterns, you can get an idea of how you’ll spend money come retirement.

Then, consider your current monthly income, and estimate your post-retirement income. If your post-retirement income is less than your current income, you might want to plan to adjust your expenses or even consider changing your retirement plans.

We have monthly expense and income worksheets to help with this exercise. You can print them out and start planning ahead for post-retirement spending.

Monthly budgeting worksheets (PDF)

Monthly Worksheets (PDF)

For those of you who carry smart phones, Forbes put together a list of popular apps for tracking your daily spending. All of them are free, though some do sell extra features. Many of them can automatically pull in information from your bank and credit card accounts, but if you’d rather avoid that exposure or if you use cash regularly, we recommend you try an app that lets users enter transactions manually.

Filing Your Application for Retirement

You’ve carefully planned your retirement, received your benefits estimate and are ready to take the big step. But before you can start receiving a pension, you’ll need to complete and submit your Application for Service Retirement (RS6037). You can also get a copy of the form from your employer or by contacting our Call Center.

Timing is important. We must have your application on file at least 15 days, but not more than 90 days, before your retirement date. (The 15-day rule does not apply if you are over 70 or left the public payroll before age 55.)

Be sure to list all of you public employment on the form. If you’ve ever been a member of another public retirement system in New York State, you’ll need to note that as well. Because your application is a legal document, you must sign it in the presence of a notary public. Many members make an appointment at a Consultation Site to file their applications. Our information representatives can notarize your application, help you with your paperwork and answer any questions.

Filing for Retirement

If you don’t wish to file in person, you can send your application by mail. Mailing the application “Certified Mail — Return Receipt Requested” will help you track this important document. Certified mail is also a good idea if you are close to a filing deadline because we consider the day it was mailed as the filing date. The mailing address is:

NYSLRS
110 State Street
Albany, NY 12244-0001

At the same time you submit your application you can also file a W-4P, so federal taxes can be withheld from your payments, and a Direct Deposit Enrollment Application, so your pension can be deposited directly into your bank account. If you’ve had a recent pension estimate, you can submit a payment option election form along with your retirement application. You should also submit a photocopy of proof of your date of birth

For more information, read our booklet “Life Changes: How to Prepare to Retire” or contact us.

How Much Will My Pension Be?

Estimate Your Pension

For anyone thinking about retirement, one big question looms: How much money will I have to live on after I stop working? Your NYSLRS pension is a lifetime benefit. Having a good idea of what that monthly amount will be is essential to effective retirement planning. Fortunately, we offer tools to help you estimate your future pension.

Most members* can use our Benefit Projection Calculator to estimate their pension. You can use this calculator even if your planned retirement date is a long way off. The calculator provides estimates based on information you enter. By changing each variable (date of retirement, average salary, beneficiary information), you can see the impact it would have on your pension benefit.
how to estimate pension infographic
If you are a vested member who has enough NYSLRS service to be eligible for a pension, you can request a benefit projection by calling our automated information line at 1-866-805-0990 (518-474-7736 in the Albany, New York area). This service is available 24 hours a day, seven days a week.

If you are nearing retirement eligibility and you aren’t certain that you have credit for all of your NYSLRS-eligible employment, complete and submit a Request for Estimate (RS6030) form. If you are a member of the Employees’ Retirement System (ERS), you may use this form if you will be eligible to retire within five years. Members of the Police and Fire Retirement System (PFRS) can submit this form within 18 months of their retirement eligibility date.

As part of your retirement planning process, you may also want to check on your Social Security benefits.

*At this time, you cannot use this calculator if you are in ERS Tier 5 or 6; PFRS Tier 3, 5 or 6; or certain special plans.

Welcome New Members

Welcome to new members of the New York State and Local Retirement System (NYSLRS).

NYSLRS is here to help you plan for a financially secure retirement. Your retirement may be far in the future, but decisions you make now will have a big impact on your later years. Here are a few things you should know:

How Pensions Work

A NYSLRS pension is a defined benefit plan. Under this type of plan, once you are eligible for a pension and apply for retirement, you will receive a monthly payment for your lifetime. Your pension benefits are determined by a preset formula set by law. However, many employees in the United States, particularly in the private sector, are enrolled in 401(k)-style plans. The ultimate value of a 401(k) plan is based on the contributions made and investment returns. While 401(k) plans and other individual retirement accounts are a way to supplement your pension and Social Security payments, they do not provide the same level of security as defined benefit plans. Unlike your pension, these plans do not guarantee a lifetime benefit. Learn more about how pensions work.

New Members Checklist

Service Credit

Your NYSLRS pension will be based on factors such as your tier, retirement plan, age at retirement, final average salary, and service credit. One year of full-time employment with a participating employer is equal to a one year of service credit. Part-time employment is prorated. You may also be able to buy service credit for previous public employment or military service, which in most cases would increase your pension.

Start Saving Now

Because having a defined benefit pension plan is only one part of building a financially secure future, it’s essential that you save additional money for retirement. State workers and employees of participating local governments can take advantage of the New York State Deferred Compensation Plan. You can start by having as little as $10 deducted from each paycheck. You may choose how your money will be invested from a variety of options. Because of how compound interest works, the earlier you start saving, the better off you’ll be.

More Information

You’ll find more information in our booklet Membership in a Nutshell. We also publish booklets about specific retirement plans. If you know which system you’re in (Employees’ Retirement System or Police and Fire Retirement System) and your tier, you should be able to find your plan. If you are not sure what plan you’re in, ask your employer.

NYSLRS’ Top Five Retirement Myths from 2016

Retirement Myths vs FactsWith two retirement systems, six tiers and 346 retirement plan combinations, it’s quite possible that the NYSLRS benefit information your coworker is talking about may not apply to you. That’s why, periodically, we like to clear up some common misconceptions we hear from members and retirees. Here are our top five retirement myths from 2016.


Myth #1  “NYSLRS can change the rules determining pension contributions and retirement benefits.

Fact  We can’t. The contributions you make and the benefits you enjoy are dictated by law — as passed by the Legislature and signed by the Governor. NYSLRS administers these programs.

This is also true for retirement incentives; the decision to offer an incentive comes from the Legislature and the Governor. Individual employers, like your town or police department, may decide to offer their own incentives to employees, but these do not affect a member’s NYSLRS pension benefits.


Myth #2  “Your final average salary (FAS) is based on the years immediately preceding your retirement

Fact  While the number of years used to calculate your FAS varies by tier and plan, they aren’t limited to your final years of employment. We look at your entire employment history while you were a member of NYSLRS to find the consecutive years when you earned the most, and those years are used in the calculation for your FAS. For more information, visit our website.


Myth #3  “NYSLRS membership ends when you stop working for a NYSLRS participating employer.

Fact  Even when you leave public employment before you’re eligible to retire, you’re still a NYSLRS member. If you’re vested, you will be eligible for a pension benefit once you reach the retirement age specified by your plan. If you’re not vested, your contributions stay with NYSLRS and continue to earn 5 percent interest for seven years. If you leave public employment with less than 10 years of service, you can end your NYSLRS membership and request a refund of your retirement contributions.

What else happens when you leave public employment? Check out your plan publication to learn more about your benefits. You can also visit our website for more information.


Myth #4  “You can’t make extra payments to pay off a NYSLRS loan faster.

Fact  You can make additional payments or pay your loan in full at any time, with no prepayment penalties. For the payoff balance on your loan, call our automated phone service (1-866-805-0990 or 518-474-7736 in the Albany, New York area and press 3 for members; then 1 or 2 for the Employees’ Retirement System or the Police and Fire Retirement System; and then 1 for loan services). For more information, visit Loans: Getting One and Paying it Back.


Myth #5  “If Call Center lines are busy, there’s no way to get benefit information.

Fact  Even when the Call Center phone lines are busy, our automated phone system can help members and retirees with a number of tasks 24 hours a day, seven days a week.

Press 3 for Member Services, which includes current loan balance and application status information.

Press 4 for Retiree/Beneficiary Services, which includes COLA eligibility and federal tax withholding information.

Press 6 for Other Services, which includes requesting forms by fax.

Another way to get benefit information is to visit the Contact Us page on our website, which has answers to many commonly asked questions. You can also email us using our secure email form.


Avoid the myths — get the latest news about NYSLRS, your benefits and preparing for retirement with ENews, our monthly email newsletter. Sign up today, and recommend E-News to a friend.