Monthly Archives: December 2020

Final Average Earnings

As a NYSLRS member, you have a defined benefit retirement plan that provides a lifetime pension when you retire. The formula used to calculate these benefits is based on two main factors: service credit and final average earnings. You’re probably familiar with service credit — it’s generally the years you’ve spent working for a participating employer. But what are final average earnings (FAE)?

When we calculate your pension, we find the set of consecutive years (one, three or five, depending on your tier and retirement plan) when your earnings were highest. The average of these earnings is your FAE. Usually your FAE is based on the years right before retirement, but they can come anytime in your career. The years used in determining your FAE do not necessarily correspond to a calendar year. For FAE purposes, a “year” is any period when you earned one full-time year of service credit.

Types of Final Average Earnings

Your tier and plan determine how your final average earnings is calculated:

  • Three-year FAE: Members in Tier 1, 2, 3, 4 and 5.
  • Five-year FAE: Members in Tier 6.
  • One-year FAE: Members in the Police and Fire Retirement System (PFRS). Your employer must choose to offer this benefit. It’s not available to PFRS members covered by Article 14 and generally not available to PFRS Tier 6 members.

If you are not sure what retirement plan you are in, you may want to read our recent blog post.

Exclusions and Limits

The law limits the final average earnings of all members who joined on or after June 17, 1971. For example, for most members, if your earnings increase significantly through the years used in your FAE, some of those earnings may not be used toward your pension. The specific limits vary by tier; check your retirement plan booklet on our Publications page for details.

final average earnings

Since 2010, with the creation of Tiers 5 and 6, the Legislature and the Governor have introduced additional limits to the earnings that can be used toward the FAE:

Tier 5

  • Overtime pay is capped — For Employees’ Retirement System (ERS), $20,763.51 in 2021. For PFRS, the cap is 15 percent of earnings.

Tier 6

  • Overtime pay is capped – For ERS, $17,301 in 2021. For PFRS, the cap is 15 percent of earnings.
  • Lump sum vacation pay and wages from more than two employers are no longer included in your FAE.
  • Any earnings above the Governor’s salary cannot be included in your FAE.

Calculating Your Final Average Earnings

Your final average earnings is based on money earned during the period used to calculate your pension. This may include payments you receive after you retire, such as retroactive pay from a contract negotiation or pay for unused vacation days.

Calculating your FAE at retirement can take time because we must collect salary information from your employer(s) and factor in items such as retroactive payments and earnings you receive after your date of retirement. This is necessary to ensure that your pension calculation is accurate and that you receive all the benefits you are entitled to.

Find out more about how FAE is calculated on our website.

NYSLRS Retirement Online Routine System Maintenance

Retirement Online will be unavailable for a few days while we complete routine year-end maintenance. Retirement Online will be offline from 3:00 pm on Tuesday, December 29 until 7:00 am on Friday, January 1.

Using the NYSLRS Automated Phone System During the Maintenance Period

Another way you can get information about your NYSLRS benefits is through our automated phone system, which allows you to get personal account information, order forms and conduct other retirement transactions without having to speak with a customer service representative. The automated phone system is generally available 24 hours a day, seven days a week, so you can conduct business with NYSLRS on your schedule.

Retirees can use the automated phone system to:

  • Request that NYSLRS forms be mailed to them,
  • Report a lost, stolen or late pension check,
  • Get tax information,
  • Get information about cost-of-living adjustments (COLAs), and
  • Request a direct deposit form.

Members can use the automated phone system to:

  • Request that NYSLRS forms be mailed to them,
  • Find out if they are eligible for a loan or get their current loan balance,
  • Request that a benefit projection be mailed to them, and
  • Get personalized information about purchasing credit for previous service.

Here are the retiree menu options for the phone system:

automated phone system for retirees

Here are the member menu options for the phone system:

automated phone system for members

Other Ways to Get Information

If you are looking for general information about NYSLRS benefits, you can:

Knowing Your Retirement Plan is the Key to Retirement Planning

Information is the key to being fully prepared for your retirement years. The single most important thing you can do to achieve this goal is to know what NYSLRS retirement plan you’re in. Once you know that, the next thing you must do is understand the benefits your plan provides.

Your retirement plan booklet covers things like how long you’ll need to work in order to receive a pension, how your pension amount is determined, and what kind of death and disability benefits may be available to you. You can find a copy of your plan booklet on our website’s Publications page.

But here’s the challenge: NYSLRS manages 335 retirement plan combinations, which are described in 51 plan booklets. How do you figure out which is yours? The information below should help.

Retirement plan booklet infographic

Two Key Questions

To get started, you need to answer two questions.

Question One: Which retirement system are you in? NYSLRS is made up of two different systems:

  • The Employees’ Retirement System (ERS), which is for public employees in non-teaching positions. It also includes some law enforcement personnel, such as correction officers, sheriffs and sheriffs’ deputies.
  • The Police and Fire Retirement System (PFRS), which is for paid firefighters and police officers, including SUNY police, State Park police, Encon officers and State Forest Rangers.

Question Two: Which tier are you in? There are six tiers in ERS and five tiers in PFRS. Your tier, based on when you joined NYSLRS, determines such things as when you become eligible for benefits and how much you contribute. You can find your tier by checking your Account Information in Retirement Online or by checking the NYSLRS website.

For many members, knowing your retirement system and tier are enough. But for other members, especially those in law enforcement, it may help to have your retirement plan number as well. The plan number indicates the section of Retirement and Social Security Law the plan is based on. For example, Plan A15 indicates that you are covered by Article 15. You can find your plan number in the Account Information section of Retirement Online.

Roughly three-quarters of all ERS members are covered by Article 15; they just need to know their tier to find the correct booklet.

State policeSUNY policeState Encon OfficersState Park Police and Forest Rangers each have their own plan booklet, which can be found in the PFRS section of the Publications page. That’s also where you’ll find the Special 20- and 25-Year Plans, which cover officers in most municipal police departments. (Members in these special plans should see 384, 384-d or 384-e listed in Retirement Online.)

If you are still unsure which retirement plan booklet covers your benefits, you can send us an email using our secure contact form, or you can ask your employer.

Take the Time to Understand Your Retirement Plan

It cannot be stated enough how important it is to read your plan publication to learn all you can about your benefits. It is the key to solid retirement planning. Remember, no one has a more vested stake in your retirement than you do.

What Happens After You File for Retirement

The day has finally come — you filed for retirement. You submitted your retirement application through Retirement Online (or mailed a paper retirement application) and now you’re looking forward to your first pension payment. Here’s what to expect next.

Submit Any Additional Paperwork

After you file for retirement, we will send you and your employer an acknowledgement letter, which will list your retirement date. We may reach out to you for additional information to complete the retirement process — what option you selected, what federal tax to withhold, and your banking information for electronic payments.

file for retirement

Fortunately, if you used Retirement Online, you were able to select your payment option, provide tax withholding information, and enroll in our Direct Deposit Program when you completed the online application.

If you mailed a paper application and did not include this information, we’ll send you the necessary forms to fill out and send back to us. The forms are also available on our website if you want to print your own:

  • W-4P form: If you don’t submit a W-4P, we’ll withhold federal taxes based on the status “married with three dependents.” You can change your withholding at any time.
  • Direct Deposit Enrollment form: We encourage you to sign up for direct deposit, so you’ll have safe and reliable access to your pension payments on the last business day of each month. Paper checks are mailed on the second to last business day of each month and may take longer to receive.
  • Option Election form: If you haven’t received a pension estimate from our office in the past 18 months, you don’t need to include your pension payment option election when you file a paper application — you can wait until after you review an estimate to choose an option. We’ll send you an estimate, along with an option election form, after we receive your retirement application.

Receive Your First Payment

Once NYSLRS receives your retirement application, we will determine your initial pension benefit amount based on the earnings and service information we have on file at the time of your retirement.

Most NYSLRS retirees get their first pension payment at the end of the month following the month they retire. Please note: we cannot send your first payment until we have proof of your date of birth. A copy of your New York driver’s license, birth certificate, passport or naturalization papers are acceptable proofs. If you didn’t have proof of date of birth available when you submitted your retirement application, you can email us a copy by attaching it to our secure contact form or upload it using Retirement Online.

Possible Adjustments to Your Pension

If we receive additional payroll information from your employer, such as eligible lump sum payments, a retroactive pay increase or lagged regular earnings, we may need to adjust your pension payment.

Because of the many variables that are often involved in verifying service and salary details with your former employer, finalizing your retirement benefit amount can take some time. The time this takes depends on the complexity of your circumstances. For example, if you worked for multiple public employers, it may take longer to pull together all your earnings information. Also, if you are transferring service from another retirement system, filing a Domestic Relations Order or are seeking to purchase past service credit, you should expect a delay in receiving a finalized pension amount.

Once we have all the information we need, we’ll recalculate your pension amount. In most cases, your initial payments will be very close to the final benefit amount, but if your payment increases, you will receive a retroactive payment for the amount you are owed back to your date of retirement (the difference between your initial payments and your final retirement benefit amount).

Retirement Online Makes Applying for Retirement Fast, Easy

You can file for a service retirement benefit using Retirement Online. This new feature makes applying for retirement faster and easier than ever before. If you don’t already have an account, sign up today.

applying for retirement

File for a Service Retirement Online

After signing in to your Retirement Online account, scroll down to the ‘My Account Summary.’ On the right, under the heading ‘I want to…,’ click the green “Apply for Retirement” button.

From there, you’ll go through a series of screens where you’ll be able to:

  • Choose a retirement date;
  • Get an estimate of your pension and the payment options available to you;
  • Select a payment option (many provide a continuing benefit for a beneficiary after you die);
  • Sign up for direct deposit; and
  • Attach required documents, such as proof of date of birth.

A big advantage of filing for Retirement Online is that you do not have to get anything notarized.

After you click the “Submit” button, it is important that you do not close your browser until you receive a confirmation message that states your retirement application has been successfully submitted.

This help guide offers step-by-step instructions.

Filing for Service Retirement by Mail

You can still print an Application for Service Retirement and pension payment option election form and mail them to NYSLRS. If you mail the application, we recommend “certified mail, return receipt requested.” When we receive the form, the postmark date will serve as the filing date.

If you use regular mail, the filing date is the date we receive it. However, if you were to die after your application is mailed, but before we receive it, a legible postmark will serve as a filing date. (If you mail it from a post office, you can ask for a hand cancellation, which may help ensure the postmark is legible.)

If you plan to mail your application, you may want to read our blog post, Your Checklist to Apply for Retirement.

For More Details, Read Your Retirement Plan Booklet

Your service and disability retirement benefits and death benefits are based on your tier, plan, service credit, and other factors. For details about your available benefits, please read your retirement plan booklet, available on our Publications page, or you can call our Contact Center at 866-805-0990 if you have questions.