Tag Archives: retirement planning

Getting Credit for Your Military Service

If you served in the U.S. Armed Forces, you may be eligible to buy back up to three years of active service credit. Because service credit is a factor in calculating a NYSLRS pension, in most cases buying military service credit will increase your pension.

Military Service Credit

To be eligible, veterans must:

  • Have been honorably discharged;
  • Have at least five years of credited service in the Retirement System;
  • Have not received credit for this service in any other public retirement system in New York State; and
  • Apply for and purchase military service credit before they retire.

How to Apply for Military Service Credit

To apply and request a cost for military service credit:

1. Fax your name, contact information and a copy of your DD-214 to 518-486-6405 or 518-402-7799;

or

2. Mail a letter with your name and contact information, and a photocopy of your DD-214, to:
    Military Service Unit
    110 State Street
    Albany, NY 12244-0001

If after reviewing your application we determine you are eligible, we will send you a letter that will tell you how much credit you are eligible to purchase and the cost. Most members in Tier 1, 2, 3 or 4 can use our online benefit projection calculator to see how the credit would impact your pension. Tier 5 and 6 members can get that information by calling 1-866-805-0990, or using our secure email form (www.emailNYSLRS.com).

For more information, visit the Military Service Credit page on our website.

Just Started A New Public Sector Job? Remember This Step…

Are you a current New York State & Local Retirement System (NYSLRS) member working at a new job in the public sector? Even though you’re already a member, make sure your new employer sends us a membership application for you.

The Importance of the Filling a New Membership Application

woman on job interview

By sending a new membership application, your employer provides us with updated information about your membership, like the start date of your new position and your job title. But, it’s important for other reasons as well. Up-to-date member information:

  • Ensures that your employment history and benefit projection are accurately reported in your Member Annual Statement;
  • Helps guarantee that benefit determinations are based on the most current information;
  • Highlights any delays between when you began working and when your employer started reporting you;
  • Ensures that we will receive the correct contribution amount for your membership; and
  • Allows us to update your retirement plan in our records, should you change plans as a result of your new employment.

Starting a new public sector job is also a good opportunity to update your beneficiary information . You should check your beneficiaries regularly to make sure any benefits will be paid according to your wishes. Payments are made to the last named beneficiary.

Retirement Online is the convenient and secure way to review and update your beneficiary information. Register or Sign In , and then click “Update My Beneficiaries.”

Being a Friend

While you have applications on your mind, think about any friends or coworkers you may have. Perhaps, like you, they have recently changed jobs. Remind them to make sure their employers submit new applications.

Or, maybe you know a coworker who isn’t a mandatory member of NYSLRS, but who has that option. Suggest they consider joining NYSLRS.

It’s a good idea to join even if you aren’t sure you’ll ever apply for a benefit. By becoming a NYSLRS member, you lock in your tier and protect your benefits. And, if you do decide to leave public employment and withdraw your membership, you’ll receive 5 percent on your contributions, which can be a competitive return.

For more information about the benefits of NYSLRS membership, check out our Membership in a Nutshell publication.

How Full-Time and Part-Time Service Credit Works

Service credit plays a vital part in your pension calculation and your eligibility for other NYSLRS benefits. As a NYSLRS member, you earn service credit by working for an employer who participates in the Retirement System. All your paid public employment is creditable. You would not, however, earn credit for any period when you are not receiving a salary, such as an unpaid leave of absence. If you work full-time or part-time, you’re earning service credit, just at different rates.

Earning Service Credit When You Work Full-Time

When you work on a full-time, continuous basis throughout your career, we’ll calculate your total service credit from your date of employment up until the date you leave paid employment. Most full-time workers earn a year of service credit for working 260 work days in a year. For a full-time 12-month employee, 260 work days constitutes a full year. For our members who work for school districts, a full-time 10-month academic year can be 180 work days. (If you work in an educational setting, we covered that in an earlier blog post.)

Earning Service Credit When You Work Part-Time

Your service credit is prorated if you work part-time. Part-time employment is credited as the lesser of:

the number of days worked ÷ 260 days

or

your reported annual salary ÷ (the State’s hourly minimum wage × 2,000)

You can think of it like this: let’s say you work 130 days in a year. If a year’s worth of service credit is earned for working 260 days full-time, you’d earn half a year (0.5) of service credit for your part-time work.

Check Your Member Annual Statement

From May to July, we’ll send out this year’s Member Annual Statements. For most members, your statement will show how much service credit you’ve earned over the past fiscal year (April 1, 2017 – March 31, 2018). It will also show your total service credit as of March 31, 2018. Make sure to look it over to see how much service credit you’ve earned over your career.

For more detailed information about service credit, please refer to your specific retirement plan publication.

Dig into the NYSLRS Summer Reading List

Looking for some perfect summer beach reading? Why not check out these page-turners from NYSLRS? They’re light on colorful characters and exotic settings. But, what they lack in plot intrigue, they make up for in important retirement information.

summer reading

1.  Service Credit for Tiers 2 through 6

Service credit is one of the main components that determine your NYSLRS pension. Whether you’re a new member or well into your career, it’s important to understand what it is, its role in your pension calculation and the various types of service for which Tier 2, 3, 4, 5 and 6 members can receive credit. ( Read it now. )

2.  Retirement Plan for ERS Tier 3 and 4 Members (Articles 14 and 15)

Nearly 300,000 Tier 3 and 4 members of the Employee’s Retirement System (ERS) are covered by this plan. The publication explains some of the benefits and the services available to you, including a service retirement, a vested retirement, a disability retirement, death benefits and more. ( Read it now. )

3.  Membership in a Nutshell

NYSLRS membership can be overwhelming when you first join. There’s new terminology: What’s a tier or service credit or a final average salary? There are services like loans and benefit projections as well as new responsibilities like keeping your account information up to date. This guide will help you navigate NYSLRS and your new retirement plan. ( Read it now. )

4.  Retirement Plan for ERS Tier 6 Members (Article 15)

More than 130,000 Tier 6 ERS members are covered by this Plan. The publication explains some of the benefits and the services available to you, including a service retirement, a vested retirement, a disability retirement, death benefits and more. ( Read it now. )

5.  Life Changes: A Guide for Retirees

Already retired? As a NYSLRS retiree, you know that you will receive a monthly retirement benefit for life. However there may be other benefits available to you, as well as services that we provide retirees. This guide will answer many of the questions you may have and explain your responsibilities as a retiree. ( Read it now. )

Not covered by the retirement plans above? Maybe you’re a police officer, a firefighter, a sheriff or a correctional officer. Find your plan as well as publications covering other general topics of interest on our Publications page. They’re great reading any time of year.

A Healthy Retirement

To many of us, life feels like one great race toward retirement. Every year worked and each dollar saved gets us a step closer to that finish line.

If it is a race, members of the New York State and Local Retirement System (NYSLRS) have a head start, with retirement benefits guaranteed for life. And, with most NYSLRS members eligible to retire as early as age 55, the finish line may be closer as well.

But, what happens when the race is over? It turns out that question is more important than you might think. Your answer can help make retirement a time of fun, relaxation and intellectual stimulation like you’ve always pictured.

Research reveals secrets to a healthy retirement.

According to research based on the Study of Adult Development — an ongoing, 70-year investigation conducted by researchers at Harvard Medical School — choices we make after retirement can promote a long and fulfilling third act. Dr. George E. Vaillant, professor of psychiatry at Harvard Medical School, has been a part of the study for more than 40 of those 70 years. He has identified four behaviors associated with enjoyable and healthy retirements:

  1. Don’t be an island. We spend our careers making friends and forging connections with colleagues. When we retire, much of the daily human contact that was easy and almost automatic is suddenly gone.
  2. Get a hobby. Whether it’s traveling or golf, volunteer work or woodworking, regular activities add valuable order to your days, offer opportunities to exercise and make excellent shared interests for new friendships.
  3. Use the right side of your brain. Conceptual activities like painting, writing or even gardening promote both physical and mental health.
  4. Learn something new. Should your ongoing education take the form of an in-person class or workshop, that’s all the better. Take the opportunity to meet new people and expand your social network.

Whatever you decide to do when you no longer work, a smooth retirement process will start you off on the right foot. Check out our Life Changes: How Do I Prepare to Retire? publication. It offers resources to help you decide when to retire, a step-by-step guide to the retirement process and even a monthly expenses worksheet to help you budget for life after retirement.

Start Saving for Retirement Now

More than 40 percent of Millennials are not saving for retirement at all, according to one recent study.

If you’re in your 20s or 30s and have nothing saved for retirement, now is a good time to get started. Even if you can’t save much, starting early gives your money time to grow. And getting started is probably easier than you think.

A simple savings plan

Let’s say you put $10 per week into a retirement account. That’s just $2 per workday. Let’s also say you invest your savings in a stock fund, which yields an average annual return of 7 percent, compounded annually. (That’s actually pretty conservative based on past market performance.) After 30 years, you’d have $50,000. Not bad for a couple bucks a day.

Of course, you’ll want to save more over the course of your career, but the important thing is getting started early. That’s because your future investment returns will be based not just on the money you invest, but on the returns on those investments as well.

Deferred Compensation – an easy way to save

For public employees, New York State Deferred Compensation Plan is a good place to start.

Deferred Comp is a 457(b) retirement plan created for New York State employees and employees of participating agencies. (It is not affiliated with NYSLRS.) If you are a NYSLRS member but do not work for New York State, check with your employer to see if you are eligible.

Deferred Comp makes withdrawals directly from your paycheck, so once you sign up, you don’t even have to think about it. They also offer packaged investment plans, so you don’t have to be a financial wizard to participate, or you can create a customized investment plan.

The important thing is to get started. Then watch your money grow.

Retirement Planning vs. Reality

As we sit down to plan our retirement, we ask ourselves some tough questions: Am I saving enough? Am I ready for the lifestyle change? Do I need to tighten my budget now or will I need to in retirement?

These questions are all aimed at helping us answer one central question: When is the right time to retire?

According to recent Gallup research, there is often a significant gap between the age we plan to retire and how old we are when we actually do.

Retirement Survey

Gallup’s April 2016 survey asked workers, “At what age do you expect to retire?” And, it asked retirees, “At what age did you retire?”

On average, there is a significant gap between the percent of workers who plan to retire within a certain age range and the percent of retirees who actually did. For example, 31 percent of workers intend to retire at age 68 or older. However, only 12 percent of retirees actually do. And, only 23 percent of workers think they’ll retire before age 62. Nevertheless, 36 percent of retirees ended up doing so. On average, Americans expect to retire at age 66, but actually retire at age 61.  That means a significant number of us may be underestimating how many years our retirement savings need to last.

Age and Your NYSLRS Pension

Regular readers may recall that most NYSLRS retirement plans have a minimum age requirement to retire with a full benefit. However, once you are vested, you are generally able to retire as early as age 55.

An early retirement may come with a significant — and permanent — benefit reduction, though. So, if you plan to retire with a full benefit at age 62 (or 63 for Tier 6 members), but end up retiring early instead, your pension will be less than you planned.

Retirement Planning

NYSLRS has several resources to help you make your retirement plans and stay on target. We distribute your Member Annual Statement (MAS) between May and July. It contains valuable information to help you understand your benefits and plan for the future, including: your earnings, your service credit total and up to three pension projections based on your specific details. You can also check out our Preparing for Retirement — A Checklist and 5 Step Plan for Retirement pages on our website. Our Life Changes: How Do I Prepare to Retire? publication offers a step–by–step guide to the retirement process, a list of available resources and some key factors to consider as you plan.

If you have any questions about your retirement plan, we’re glad to help. Email us using our secure email form, which allows us to safely contact you about your personal account information.

Know Your Benefits: Your NYSLRS Pension

Generally, three main components determine your NYSLRS pension: your retirement plan, your final average salary (FAS) and your total service credit.

Your Retirement Plan

NYSLRS retirement plans are established by law. Your plan lays out the formula we’ll use to calculate your pension as well as eligibility requirements. It’s important to read your plan booklet, which you can find on our Publications page.  If you aren’t certain what retirement plan you’re in, check your Member Annual Statement or ask your employer.

NYSLRS Pension Chart

Final Average Salary

Your FAS is the average of your earnings during the set period of time when they were the highest. For ERS and PFRS members in Tiers 1 through 5, that period is three consecutive years; for Tier 6 members, it’s five consecutive years. Some PFRS members may be eligible for a one-year period, if their employer offers it. We will use your FAS, age at retirement, total service credit and the formula from your retirement plan to calculate your NYSLRS pension.

Generally, the earnings we can use for your FAS include regular salary, overtime and recurring longevity payments earned within the period. Some payments you receive won’t count toward your FAS, even when you receive them in the FAS period. The specifics vary by tier, and are listed in your retirement plan booklet.

In most cases, the law also limits how much your pensionable earnings can increase from year to year in the FAS period. Earnings above this cap will not count toward your pension.

Our Your Retirement Benefits publications, (ERS and PFRS), provide the limits for each tier and examples of how we’ll determine your FAS.

Service Credit

Service credit is credit for time spent working for a participating public employer. For most members who work full-time, 260 workdays equals one year of service credit. Members who work part-time or in educational settings can refer to their retirement plan publication for their service credit calculation.

Service credit is a factor in the calculation of your NYSLRS pension. Generally, the more credit you have, the higher your pension will be. Some special plans (usually for police officers, firefighters or correction officers) let you retire at any age once you’ve earned 20 or 25 years of service credit. In other plans, if you retire without enough service credit and don’t meet the age requirements of your retirement plan, your pension will be reduced.

Planning Ahead for Your NYSLRS Pension

As you get closer to retirement age, keep an eye on your service credit and FAS. Make sure we have an accurate record of your public employment history. You can sign in to Retirement Online or check your latest Member Annual Statement to see the total amount of service credit you’ve earned. You may also want to take a look at our budgeting worksheet or try our Benefit Projector Calculator as you plan for your retirement.

If you have questions, or want to find out more information about what makes up your NYSLRS pension, please contact us.

Will Your Retirement Age Affect Your Benefit?

Only you can decide when it’s time to retire, but you should know that your age at retirement can affect your pension benefit. Some New York State and Local Retirement System (NYSLRS) members are in special plans that allow for retirement after a certain number of years, regardless of age (for example, police officers, firefighters, correction officers or sheriffs). But for most members, you can retire with full benefits at the age specified by your plan. Most members can choose to retire as early as age 55, but if you do, you may receive a permanently reduced pension benefit.

Full Retirement Ages

Most retirement plans have an age requirement to retire with full benefits. For Employees’ Retirement System (ERS) members in Tiers 2, 3, 4 and 5 and Police and Fire Retirement System (PFRS) members in Tiers 2, 3, 5 and 6, the full retirement age is 62. For ERS Tier 6 members, it’s 63. PFRS Tier 6 members who have left their PFRS employer are eligible for their benefits at age 63.

Service Credit Exceptions

In some retirement plans, members with a certain amount of service credit can retire at age 55 without being subject to benefit reductions. Benefit reductions don’t apply to ERS Tier 2, 3 or 4 members who have 30 or more years of service credit and Tier 2, 3, 4 and 5 Uniformed Court Officers and Peace Officers employed by the Unified Court System who have 30 or more years of service.

Benefit Reductions

Retirement benefits for all other ERS Tier 5 and Tier 6 members, and PFRS Tier 2, 3, 5 and 6 members not in a special 20- or 25-year plan, will be reduced for early retirement — even if they have 30 years of service credit.

These benefit reductions are prorated by month, so the closer you are to your full retirement age, the less the reduction will be. Once you retire with a reduced benefit, that reduction is permanent.

Here’s a look at how reductions break down by membership tier:

Contact us if you have any questions about benefit reductions or any other retirement-related topics. Please review your retirement plan booklet for a full description of the benefits you’re entitled to as well as any reductions and restrictions.

Designating Beneficiaries: An Important Decision

When you join NYSLRS, we ask you to designate one or more beneficiaries who may receive certain benefits if you die while working. But, don’t forget about your beneficiaries after you turn in your membership application. It’s important to review them periodically to make sure they reflect your current wishes.

Your beneficiaries can be anyone; you don’t need to choose family members. You can even name an organization, such as a charity or religious institution, or your estate. And, did you know there are two types of beneficiary that you can designate?

Types of Beneficiaries

You can name both primary and contingent beneficiaries:

  • Your primary beneficiary will receive any payable benefit. You can list more than one primary beneficiary, and if you do, they will share the benefit equally. You can also choose different percentages for each beneficiary, as long as they total 100 percent. (Example: John Doe, 50 percent; Jane Doe, 25 percent; and Mary Doe, 25 percent.)
  • Your contingent beneficiary will only receive the benefit if all your primary beneficiaries die before you do. Multiple contingent beneficiaries will share the benefit equally, unless you choose to divide the benefit among them differently.

How Do I Designate a Beneficiary?

Even though you designated a beneficiary when you first joined NYSLRS, you can update your beneficiaries any time.

  • The fastest way to view or update your beneficiaries is through Retirement Online. It’s a convenient and secure way to review your personal details, contact information and more. Register and sign in, then click Manage My Beneficiaries on the right, under I want to ….
  • You can also complete and mail us a Designation of Beneficiary form (RS5127). Be sure to sign and date the form, and have your signature notarized. The notary must include his or her notary expiration date, and your notary should not be one of your beneficiaries. We can’t accept a form with any alterations, including erasures or the use of correction fluid. You can name up to four primary and four contingent beneficiaries on the form. Please contact us if you want to designate more, because we cannot accept attachments.

Whether you change your beneficiaries online or by mail, be sure to include all of your beneficiaries. Your new beneficiary designations will replace all of your previously named beneficiaries. The changes will not take effect until we review and approve your designations.

More Information

You can read more about beneficiary designations in our Life Changes: Why Should I Designate a Beneficiary? publication. If you have any other questions, please contact us.