It’s a scenario you probably haven’t thought of – if you retire from public employment and later decide to go back to work in the public sector in New York, you actually have the option of rejoining the New York State & Local Retirement System (NYSLRS). However, the Retirement and Social Security Law (RSSL) regulates post-retirement employment for NYSLRS members, which could affect your pension benefits.
Note: This post applies only to service retirees of the Employees’ Retirement System (ERS) or the Police and Fire Retirement System (PFRS) who are rejoining the same System. Different information applies to:
- Retirees of other retirement systems
- Persons joining a different retirement system than the one they retired from
- Disability retirees
First, it’s important to know that you don’t have to rejoin NYSLRS. But if you do, Tier 3, 4, 5 and 6 retirees may rejoin immediately and return to their former tiers. As for Tier 1 and Tier 2 retirees, they must have one year of service after re-entering employment to be eligible for an active member death benefit. Deferring joining the retirement system for one year can protect you until you are eligible for the active member death benefit, meaning you would still be covered by any post-retirement death benefit and option under which you retired while in deferment. There could be a cost associated with the deferment.
When you retire again, a new retirement date will be established. However, a new retirement date can:
- Result in a delay in receiving cost-of-living adjustments (COLAs)
- Affect the calculation of your Final Average Salary (FAS)
In addition, if you have previously retired under an early retirement incentive plan enacted by the Legislature and your pension is recalculated, you would lose any incentive service included in the calculation of your original benefit.
If you’re a member of Tier 2, 3, 4, 5 or 6 and earn less than two years of service credit in your new membership, your original pension will be reinstated along with your option election and date of retirement. You won’t receive an additional benefit for the service credit earned after your return to membership. If you’re a Tier 1 member, your original pension will be reinstated and you’ll receive an additional benefit based on your service after the return to membership.
Once you earn two or more years of service credit in your new membership, you’ll have the option to receive a recalculated pension that takes into account your original service credit, the additional service credit you earned, and any increase in salary. You may also select a new option for benefit payments, if you wish.
But in order to receive a recalculated benefit that includes your additional service, you’ll have to repay, at the Single Life Allowance (Option 0) rate, the entire amount of the pension that you received when you first retired. The amount, plus interest compounded, must be repaid in either a lump sum or through installments after you have two years of service credit in the new membership and before you retire again. Interest continues to accrue compounded until the balance is paid in full. Alternatively, you could request a permanent reduction of the new pension to account for any benefits previously received. If you choose the permanent reduction, it must be done at retirement and will include interest compounded from the date you received the monies in the first retirement until your second date of retirement.
Members with two or more years of service credit who do not wish to repay previous benefits and receive a recalculated pension will have their original pension reinstated and will receive an additional benefit based on their service after the return to membership.
Where Can I Learn More About Post-Retirement Employment?
If you are seriously considering rejoining the Retirement System, we strongly urge you to contact us to discuss the matter more fully and to obtain additional information.
Since rejoining the Retirement System after returning to work may prove financially prohibitive, you might want to consult a financial advisor before making any decision. Please read our publication, Life Changes: What If I Work After Retirement?, for more information. You can also find information about Section 211 and Section 212, laws that can also affect your return to public employment.