Tag Archives: beneficiaries

Choosing Your Pension Payment Option

When you retire from NYSLRS, you’ll need to decide how you want to receive your pension benefit.

You’ll have several pension payment options to choose from. All of them will provide you with a monthly benefit for life. Some provide a limited benefit for one or more beneficiaries after you die. Others let you pass on a monthly lifetime pension to a single beneficiary. Each option pays a different amount, depending on your age at retirement, your beneficiary’s age and other factors.

That’s a lot to think about, so let’s make this clearer with an example.

Pension Payment Option Example

Meet Jane. Jane plans to retire at age 60, and she has a husband, a granddaughter and a grandson who are financially dependent on her. First, Jane needs to decide whether she wants to leave a benefit to someone after she dies. She does.

That eliminates the Single-Life Allowance option. While it pays the highest monthly benefit, all payments stop when you die.

Jane considers naming her grandchildren as beneficiaries to help pay for their college education.

The Five Year Certain and Ten Year Certain options don’t reduce her pension much, and they allow her to name more than one beneficiary. If Jane dies within five or ten years of retirement, depending which option she chooses, her grandkids would split her reduced benefit amount for the rest of that period.

However, the Five and Ten Year Certain options wouldn’t be lifetime benefits, and since her husband doesn’t have his own pension, she decides to leave him a lifetime pension benefit and look into a tax-deferred college savings plan for her grandkids instead.

There are several options that leave a lifetime benefit. Under these options, you can only name one beneficiary. Benefit amounts are determined based on the birth dates (life expectancy) of both the retiree and their beneficiary, so Jane will receive less of a pension reduction leaving a benefit to her husband than she would if she were to consider leaving a lifetime benefit to a grandchild.

Under the Joint Allowance — Full or Joint Allowance — Half option, if a retiree dies, depending which option they choose, their beneficiary would receive half or all of their reduced benefit for life.

Under the Pop-Up/Joint Allowance — Full or Pop-Up/Joint Allowance — Half option, if a retiree dies, depending which option they choose, their beneficiary would also receive half or all of their reduced benefit. These options reduce the pension a little more, but they have an advantage: If the retiree outlives his or her beneficiary, the retiree’s monthly payment will “pop up” to the maximum payable under the Single-Life Allowance option.

As you plan for your own retirement and whether you’ll leave a pension benefit to a beneficiary or beneficiaries, you may also want to consider questions such as:

  • Do you qualify for a death benefit?
  • Do you have life insurance?
  • Do you have a mortgage, unpaid loans or other monthly payments that will have to continue to be paid if you die?

These and other factors can significantly impact your retirement planning.

To find out more about pension payment options, check your retirement plan booklet on our Publications page. Most NYSLRS members can also create their own pension estimate in minutes using Retirement Online. You can enter different retirement dates to see how those choices would affect your benefit. When you’re done, you can print your pension estimate or save it for future reference.

Reporting a Member’s or Retiree’s Death to NYSLRS

When a NYSLRS member or retiree dies, it is important that survivors report the death to NYSLRS as soon as possible. NYSLRS’ new online form makes the process of reporting a death quick and efficient.

How Survivors Can Report a Death

Survivors can find the report a death form on the NYSLRS website.

The form has two parts: The first section is for the person reporting the death to enter information about themselves. They should be sure to include a phone number in case we need to contact them. In the second part, they should enter information about the deceased member or retiree. If they know the deceased’s NYSLRS ID or the last four digits of their Social Security number, they should enter that too.

reporting a death

Survivors can upload a photocopy of the death certificate so NYSLRS can begin identifying any benefits that may be payable. (Note: we will still need an original death certificate before any benefits are paid – see below.) The form is transmitted over a secure network.

Survivors can also report a death by calling our toll-free number at 1-866-805-0990 (or 518-474-7736 in the Albany, New York area), weekdays from 7:30 am to 5:00 pm. Once they reach the call menu, they should press 3, then 1. The call will be transferred to a customer service representative, who will ask for:

  • The deceased’s NYSLRS ID, retirement or registration number or Social Security number.
  • The date of death.

We may also ask for the addresses and phone numbers of immediate family members who may be beneficiaries. Please note: Our customer service representatives cannot release the identities of a member’s or retiree’s beneficiaries over the phone.

Mailing a Death Certificate

Before any death benefits can be processed or paid, NYSLRS will need an original, certified death certificate, even if a photocopy has already been submitted. The death certificate (and the sender’s contact information) should be mailed to:

NYSLRS
Attn: Survivor Services
110 State St
Albany, NY 12244

We recommend that death certificates be sent by certified mail, return receipt requested.

What Happens Next

Once we receive the death certificate, we will send named beneficiaries or their certified representatives (guardians, powers of attorney, executors) information about death benefits and, if applicable, information about any continuing pension benefits and death benefits that may be payable based on the member or retiree’s tier and retirement plan. We will also send named beneficiaries the appropriate forms to complete.

It could take several months from the date we are notified of a death to the date that any death benefit is paid. This is the average time necessary to recover any pension payments made after the retiree’s death and calculate any death benefit that may be due, as well as receive a certified copy of the death certificate, tax withholding forms and notarized forms from the named beneficiaries. Our top priority is paying a continuing pension benefit as soon as possible.

If a member is retired when he or she dies, we will stop payment of any outgoing pension benefits. We will automatically reclaim any direct deposit payments that went out after a member’s death. Survivors should be aware that any uncashed pension checks in a deceased retiree’s name must be returned to us.

Talk to Your Loved Ones

If you’re a NYSLRS member or retiree, you should talk to your loved ones and provide them with the information they’ll need when the time comes. Let them know your wishes, where to find important papers and what steps they will need to take. And if your documents are organized and accessible, it will make things that much easier.

Our publication Getting Your Affairs in Order and A Guide for Survivors provides step-by-step guidance about what should be done now and after a member’s or retiree’s death.

Enhanced Death Benefit for Survivors of COVID-19 Victims

COVID-19 has resulted in tens of thousands of deaths across New York State. Sadly, the pandemic’s victims include NYSLRS members who carried out their essential duties despite personal risk.

The families of these selfless members can take some comfort in knowing that they may be eligible for enhanced death benefits. A new law provides certain beneficiaries of public employees who contract COVID-19 on the job and die from COVID-19 with an accidental death benefit.

death benefit for survivors of COVID-19 victims

Most NYSLRS members are eligible for a death benefit if they die while in service; this “ordinary death benefit” provides a member’s designated beneficiary or beneficiaries a single, lump sum payment, worth up to three years’ salary. Alternatively, an “accidental death benefit” may be available to certain beneficiaries if the member’s death is a result of an on-the-job accident. The NYSLRS accidental death benefit is a pension paid to beneficiaries that are defined in statute, first to a surviving spouse, if no spouse to dependent children, then to dependent parent(s).

Generally, the accidental death benefit is equal to 50 percent of the member’s final average salary or last year’s salary depending on the retirement plan the member is enrolled in. You can find your retirement plan information on our Publications page. In addition to the accidental death benefit, a special accidental death benefit may also be payable to a member of the New York State and Local Police and Fire Retirement System.

“This new law is an important step toward protecting public workers who are on the front lines fighting the coronavirus and helping their communities,” said New York State Comptroller Thomas P. DiNapoli. “If something happens to them, they deserve their retirement benefits and the peace of mind that their families are provided for.”  

Eligibility Requirements

A NYSLRS member’s statutory beneficiary would be eligible for the accidental death benefit if the member:

  • Worked at either their normal workplace or another assigned workplace, not their residence, as directed by their employer, on or after March 1, 2020;
  • Contracted COVID-19 within 45 days of the last day that the member reported for work;
  • Died on or before December 31, 2022; and
  • Died from COVID-19 or COVID-19 caused or contributed to their death.

The COVID-19 benefit also applies to members who were working as of March 1 but retired prior to July 1, 2020. If the retiree met the eligibility requirements, contracted COVID at work or within 45 days of last reporting to work, and died after retiring, but on or before December 31, 2020, their statutory beneficiary has the option of converting the service retirement benefit or disability retirement benefit to an accidental death benefit.

The COVID-19 benefit is available for all NYSLRS members (Employees’ Retirement System as well as Police and Fire Retirement System members), regardless of job title, or tier.

How to Claim the Benefit

When someone calls NYSLRS to report a death, they should let us know it was COVID-related. We’ll also ask for an original death certificate. We will then reach out to the beneficiary to assist them in claiming the benefit. For the COVID-19 death benefit, NYSLRS will confirm with the employer the dates that the member reported to work and request the required documentation showing COVID-19 as the cause of death. The COVID-19 death benefit will be reduced by any ordinary death benefits paid out to a beneficiary by NYSLRS.

NYSLRS retirees

Where in New York are NYSLRS Retirees?

NYSLRS retirees tend to stay in New York, where their pensions are exempt from State and local income taxes. In fact, 79 percent of NYSLRS 487,407 retirees and beneficiaries lived in the State as of March 31, 2020. And half of them lived in just ten of New York’s 62 counties.

So where in New York do these retirees call home? Well, there are a lot of NYSLRS retirees and beneficiaries on Long Island. Suffolk and Nassau counties are home to more than 61,000 recipients of NYSLRS retirement benefits, with annual pension payments exceeding $2 billion. But that shouldn’t be surprising. Suffolk and Nassau counties are the largest and third largest counties in the State outside of New York City by population. (The City, which has its own retirement systems for municipal employees, police and firefighters, had 23,700 NYSLRS retirees and beneficiaries.)

NYSLRS retirees

Erie County, which includes Buffalo, ranks number two among counties in the number of NYSLRS retirees, with more than 32,000. Albany County, home to the State capital, ranked fourth with close to 20,000. Monroe, Westchester, Onondaga, Saratoga, Oneida and Dutchess counties round out the top ten.

All told, NYSLRS retirees received $5.9 billion in retirement benefits in the top ten counties, and $10.8 billion statewide.

Hamilton County had the fewest NYSLRS benefit recipients. But in this sparsely populated county in the heart of the Adirondacks, those 499 retirees represent nearly 11 percent of the county population. During fiscal year 2019-2020, $10.8 million in NYSLRS retirement benefits was paid to Hamilton County residents.

Outside of New York, Florida remained the top choice for NYSLRS retirees, with more than 38,000 benefit recipients. North Carolina (9,413), New Jersey (7,893) and South Carolina (6,457) were also popular. There were 639 NYSLRS recipients living outside the United States as of March 31, 2020.

A Look Inside NYSLRS

NYSLRS paid $13.4 billion in benefits to 487,407 retirees and beneficiaries during the State fiscal year that ended on March 31. These benefits are paid out through the New York State Common Retirement Fund (the Fund).

NYSLRS By the Numbers

NYSLRS Membership                                                           

But NYSLRS is more than just the pension fund. The system had 673,336 members as of March 31, including county workers, professional firefighters and State troopers. Here are some facts about our membership:

  • 530,547 active members (that is, members still on a public payroll) work for 2,962 public employers statewide.
  • One-third of those active members work for New York State. The rest work for counties, cities, towns, villages, school districts and public authorities.
  • Nearly 94 percent of active members are in the Employees’ Retirement System (ERS). The Police and Fire Retirement System (PFRS) accounts for 6 percent of NYSLRS membership.
  • More than 44 percent of all members are in Tier 6. Fifty-eight percent of PFRS members are in Tier 2 and almost 49 percent of ERS members are in Tiers 3 and 4.

NYSLRS Retirees and Beneficiaries

The average pension for an ERS retiree was $25,105; the average for a PFRS retiree was $54,684. But these pension payments don’t just benefit the system’s retirees and beneficiaries. Because 79 percent of NYSLRS retirees and beneficiaries live in New York, $10.8 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

Extensive information about NYSLRS members and retirees, the Fund, and Fund investments can be found in the 2020 Comprehensive Annual Financial Report (CAFR). NYSLRS once again received the Certificate of Achievement for Excellence in Financial Reporting for the 2019 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 16 years.

Questions About Your NYSLRS Membership? Look Here for Answers

If you have general questions about NYSLRS or your benefits, we have a web page that can help you find the answers.

That’s because the NYSLRS Contact Us page does double duty. It not only lists contact information, it also helps you find answers for many of the common questions we get from members, retirees and beneficiaries. It covers subjects like address changes, loans, pension estimates, direct deposit and cost-of-living adjustments (COLA).

To get started, go to the Contact Us page and select the Member, Retiree or Beneficiary button to find the questions and answers you need. Each section has categories specific to that member group.

Member

answers
  • Address Change
  • Forms
  • Loans
  • Member Annual Statement
  • Mortgage Letter/Account Verification Letter
  • Pension Estimates
  • Retirement Online
  • Service Credit
  • Withdrawing from NYSLRS

Retiree

answers
  • 1099-R Reprint
  • Address Change
  • Cost-of-Living Adjustment (COLA)
  • Direct Deposit
  • Federal Taxes
  • Forms
  • Health Insurance
  • Pension Checks
  • Pension Verification Letters
  • Retirement Online

Beneficiary

answers
  • 1099-R Reprint
  • Address Change
  • Direct Deposit
  • Federal Taxes
  • Forms
  • Pension Checks
  • Pension Verification Letters
  • Reporting a Death
  • Retirement Online
  • Who is a Beneficiary?

Getting Account-Specific Answers

The information on the Contact Us page is general. If you’re looking for information specific to your situation, like your loan balance or a breakdown of your pension payment, sign in to Retirement Online. If you don’t already have a Retirement Online account, sign up today.

tax

Taxes and Your NYSLRS Pension

Tax season is here again.

In late January, NYSLRS mailed tax information to retirees (and some members and beneficiaries) so they can file their taxes.

1099-Rs

NYSLRS pensions are not subject to New York State or local income taxes, but in most cases they are subject to federal taxes. In January, we mailed 1099-R tax forms to almost 500,000 retirees who receive taxable benefits. We also mailed 1099-Rs to beneficiaries who received taxable income from NYSLRS in 2019, members who have taken taxable NYSLRS loans or have defaulted on their loans, and those who ended their membership and withdrew their contributions in 2019.

tax info - 1099-R tutorial

A 1099-R shows:

  • The total benefit paid to you in a calendar year.
  • The taxable amount of your benefit.
  • The amount of taxes withheld from your benefit.

If you didn’t get your 1099-R, you can request a reprint. This year, reprints will be available for calendar years 2017, 2018 and 2019. Your 1099-R will be mailed to the address we have on file for you. Sign in to Retirement Online to check or update your mailing address before requesting a reprint.

If you have questions about the information on the form, we feature an interactive 1099-R tutorial on our website. It walks you through a sample 1099-R and offers a short explanation of specific boxes on the form.

Changing Your Federal Tax Withholdings

If you need to make changes to your federal withholding, you can send us a W-4P form at any time. You can use this form to change your withholding status, increase or decrease the number of your exemptions, or request that an additional amount be withheld.

You can use our federal tax withholding calculator to see how these changes would affect your withholding.

Please note: If you change your withholding, it may take a few months before the changes are reflected in your pension payments. You can look up your current payment breakdown, including tax withholding, using Retirement Online.

Why Designate a Beneficiary?

When you designate a beneficiary, you choose a person to receive a benefit after your death. By choosing a beneficiary, you’re ensuring that money goes to the person you want to receive it.

Why Should I Designate a Beneficiary? is a short, but informative booklet that explains beneficiary designations and how you can change them.

It is important to designate a beneficiary because that person may be eligible to receive a death benefit. If you are a State employee, they may also be eligible for New York State survivor’s benefit. Most retirees are eligible for a post-retirement death benefit depending on their retirement plan and tier. You can designate a beneficiary to receive this one-time, lump sum benefit after your death.

A beneficiary is often a spouse, a child or another relative, but it does not have to be a family member or even a person. You can designate a trust or organization to receive your ordinary death benefit.

designate a beneficiary

Types of Beneficiaries

The booklet describes the two types of beneficiaries.

A primary beneficiary is the person who receives your death benefit. You can name more than one primary beneficiary. Each will share the benefit equally, unless you indicate specific percentages to be paid to each beneficiary.

A contingent beneficiary will receive your death benefit if all the primary beneficiaries die before you.

The booklet also has a section describing special beneficiary designations, which is helpful if you wish to name a minor child, a trust or an estate as a beneficiary

When to Designate a Beneficiary

You should review your beneficiary information periodically to make sure your beneficiary designations are up to date and reflect your current desires. Retirement Online provides convenient access to this information, which you can also find in your most recent Member Annual Statement.

If you get married, get a divorce or have a child, you may wish to change your beneficiary designation. Retirement Online is the convenient and secure way to update your beneficiaries. Sign in to your account, then click “View and Update My Beneficiaries.” You can also complete a Designation of Beneficiary form and mail it to NYSLRS.

You can change the beneficiary designation for your death benefit at any time. But remember, a beneficiary designation is a legal document, so you’ll want to avoid some common errors that could make your choices void. Fortunately, this booklet includes a list of guidelines that will help you avoid these pitfalls, and it is available online whenever you need to consult it.

Other Publications

Read our recent blog posts about other NYSLRS publications.

Retirement Online for Retirees

Retirees, you’ll want to take advantage of the safety and convenience of Retirement Online to conduct business with NYSLRS.

Using Retirement Online may save you a phone call or a trip to the mailbox. You can conduct retirement transactions in real time when it’s most convenient for you.

Retirement Online for Retirees

View Your Benefit Information

Review the most up-to-date information about your account. Check on the details of your pension and review deductions.

Update Your Contact Information

Moving? Changing your phone number or email address? It’s easy to keep NYSLRS updated so you won’t have to worry about missing important news and information about your benefits.

Snowbirds, take note. You can schedule an address change so you get NYSLRS mail at your seasonal home without interruption. This will ensure that you get your 1099-R tax forms in time to file your tax return.

Manage Your Beneficiaries

You can change the beneficiary for your post-retirement death benefit or change the contact information for an existing beneficiary.

Retirement Online makes it easy to view your beneficiary selections and submit changes instantly.

Generate an Income Verification Letter

You may need to prove your pension income for business reasons, such as applying for a mortgage or renting an apartment. With Retirement Online, you can generate an income verification letter any time you need one.

Retirees: Register for Retirement Online Today

Retirement Online is generally available from 7:00 am to 5:00 pm, seven days a week. In the future, we will be expanding its hours of operation. We’ll also be introducing additional features, including the ability to manage your direct deposit information online.

It’s easy to create your own account. If you have any difficulty, our online guide takes you step by step through the process. You’ll find it, and other helpful information, in the Tools & Tips section of the Retirement Online page.

Certain Payment Options Provide a Lifetime Benefit for a Loved One

When you apply for a NYSLRS pension, you’ll be asked to pick a pension payment option. All payment options will provide you with a monthly benefit for the rest of your life. With the Single Life Allowance, all payments stop at your death and nothing is paid to a beneficiary.

Infographic describing pension payment options

Providing for a Beneficiary

If you’re married and need to provide for your spouse, or if you have someone else you would like to provide a lifetime pension for after you’re gone, there are payment options that let you do that. In exchange for a reduction in your monthly payment, Joint Allowance options allow a beneficiary to collect all or part of your pension after you die. The amount of the reduction in your pension is based on your life expectancy and the life expectancy of your beneficiary. That means the younger your beneficiary, the deeper the reduction.

You can only choose one beneficiary under a Joint Allowance option, and your beneficiary selection cannot be changed after you retire, regardless of the circumstances. The benefit reduction for Joint Allowance options will continue even if your beneficiary dies before you do.

Pop-Up Payment Options

If we could predict the future, pension choices would be a lot easier. But a Pop-Up payment option is one way to hedge your bets about the future. Like Joint Allowance options, these plans allow you to provide a lifetime payment for a beneficiary after your death. But if your beneficiary dies before you, your future monthly payments would be increased to the amount you would have been receiving had you chosen the Single Life Allowance. (The pop-up only affects future payments. You would not be entitled to any retroactive payments.)

The monthly reduction in your benefit will be greater if you choose a Pop-Up option over a regular Joint Allowance.

Consider Your Decision Carefully

There are a number of factors that might influence your payment option choice. Your age and overall health, the age and health of your spouse, and your loved one’s access to other financial resources should all be considered.

If you choose one of the retirement options above, you only have 30 days after the end of your retirement month to change your option. After that date, you cannot change the option or beneficiary designation for any reason.

Other Death Benefits

Most NYSLRS retirees are eligible for a post-retirement death benefit if they retire directly from payroll or within one year of leaving covered employment. Eligibility depends on your retirement plan and tier. If you are eligible, your beneficiary will receive a one-time, lump sum payment. The amount of the post-retirement benefit is a percentage of the benefit available during your working years. For information about this and other potential death benefits, please visit our Death Benefits for Retirees page.

Find Out More

There are also options that allow you to leave a monthly payment to more than one beneficiary, and options that leave a benefit for a certain amount of time. Visit our Payment Option Descriptions page for details about all of the available payment options.

Most members can use Retirement Online to create a pension estimate based on the salary and service information we have on file for them. Go to the My Account Summary section of your Retirement Online Account Homepage and click the Estimate my Pension Benefit button.