Tag Archives: Information is the Key

Countdown To Retirement — 18 Months Out

After taking time to plan and learn about your NYSLRS retirement benefits, you’ve decided to retire. In the final months leading up to your retirement date, there are important things you need to do. Our Countdown to Retirement series will help you know what to do and when — beginning with 18 months out.

18 Months Out

You should request a NYSLRS retirement estimate 18 months before you plan to retire. Your estimate will provide your approximate pension payment amounts under different payment options, as well as information about your retirement benefits.

To get your NYSLRS retirement estimate, send us a completed Request for Estimate form (RS6030). On the form, make sure you include:

  • Planned retirement date
  • Name and birth date of your intended beneficiary
  • Public employment history

Your public employment history dates don’t have to be exact, but NYSLRS will use this information to review your account to see whether you are eligible for any additional service

pension verification letter infographic

Your NYSLRS Retirement Estimate

When you receive your NYSLRS retirement estimate, you can expect to see your:

With your NYSLRS retirement estimate, you can see how an outstanding loan balance or additional service credit might affect your pension. This is information you need now; it shouldn’t be a surprise when you retire. You may receive your estimate and decide that you’re not ready to retire. That’s fine; you can request a new one later on.

The NYSLRS retirement estimate is based on the information we have on file for you, so it’s important to review it carefully. If your estimate isn’t what you expected, report any inconsistencies to us as soon as possible.

Counting Down

Your planned retirement date will be here before you know it. As it gets closer, check out the rest of our Countdown to Retirement series for steps to take 12 months, eight months, four to six months and one to three months before your retirement date.

NYSLRS Basics: Special Beneficiary Designations

As a NYSLRS member, it’s important for you to name beneficiaries. When you die, your beneficiaries may be eligible to receive a death benefit. You can choose anyone you wish to receive your death benefit; it does not have to be a family member. In fact, it doesn’t even have to be a person. You can name your estate, a charity or a trust, but it helps to know how these special beneficiary designations work.

There are two main types of beneficiaries. A primary beneficiary is someone you choose to receive your benefit if you die. A contingent beneficiary would receive the benefit if the primary beneficiary dies before you. If a beneficiary dies before you, you should update your beneficiary information to ensure that your benefit is distributed according to your wishes. You can name more than one primary or contingent beneficiary.

Retirement Online is the convenient and secure way to update your beneficiaries. If you don’t already have an online account, you can learn more on our website.

Benefit Distribution

If you name more than one primary beneficiary, each will share the benefit equally. You can also have a certain percentage of the benefit paid to each beneficiary. The percentages don’t have to be equal, but they must add up to 100 percent. (For example, John Doe, 50 percent; Jane Doe, 25 percent; and Mary Doe, 25 percent). The same rule applies for multiple contingent beneficiaries.

Special Beneficiary Designations

Here are the rules pertaining to special beneficiary designations:

special beneficiary designations

Trusts

If you have executed a trust agreement or provided for a trust in your will, your trust can be your primary or contingent beneficiary. To name a trust, sign in to Retirement Online or use our Trust with Contingent Beneficiaries form (RS5127-T).  We’ll need a copy of your trust document, which you can mail to NYSLRS.

With this type of designation, the trust is the beneficiary, not the individuals who will receive the trust. If you revoke the trust or it expires, you will want to make new beneficiary designations as soon as possible to ensure benefits are paid according to your wishes.

You should talk to a lawyer if you’d like more information on trust agreements.

Estates

You may name your estate as the primary or contingent beneficiary of your death benefit. If you name your estate as your primary beneficiary, you cannot name a contingent. If a benefit is payable, the executor of your estate will distribute it according to your will.

Entities

You may name any charitable, civic, religious, educational or health-related organization as a primary or contingent beneficiary.

Minor Children

If your beneficiary is under age 18 at the time of your death, your benefit will be paid to the child’s court-appointed guardian. You may also choose a custodian to receive the benefit on the child’s behalf under the Uniform Transfers to Minors Act (UTMA). Before making this type of designation, please contact us for more information.

More Information

Please note that some of these beneficiary designations will be subject to a NYSLRS legal review.

For more information, please read our publication “Why Should I Designate a Beneficiary?” You can find your current NYSLRS beneficiaries listed in Retirement Online, or in your Member Annual Statement, which is sent out every summer.

Dual Membership in NYSLRS

The New York State and Local Retirement System (NYSLRS) consists of two retirement systems: the Employees’ Retirement System (ERS) and the Police and Fire Retirement System (PFRS). Your job title determines what system you’re in. In some cases, however, it’s possible to have a dual membership, to be a member of both systems. As of State fiscal year end 2018, 1,574 members had memberships in both ERS and PFRS.

How Does Dual Membership Work?

dual membership in NYSLRSLet’s say you work as a fire fighter, so you’re a member of PFRS. You decide to take on a part-time job as a bus driver for your local school district. Your school district participates in ERS, so you’re eligible for ERS membership. You fill out the membership application, and now you’re a member of both ERS and PFRS. The date you join each system determines your tier in each membership.

Implications of Dual Membership

As a member of both systems, you’d have separate membership accounts. Let’s look again at our fire-fighting bus driver example. While working as a fire fighter, you make any required contributions and earn service credit toward your PFRS pension only. The same is true for your work as a bus driver—your required contributions and earned service credit only go toward your ERS pension, not your PFRS pension.

There are other implications to dual membership. Assuming you’re vested in both memberships and meet the service credit and age requirements, you could retire and collect a pension from both systems. You’d need to file separate retirement applications for ERS and PFRS, and we’d calculate each pension separately. We’d calculate your ERS pension using the final average salary (FAS) you earned as a bus driver and your PFRS pension using the FAS from your time as a fire fighter.

And, since you’d have both an ERS pension and a PFRS pension, you would need to choose a beneficiary for each in the event of your death.

Questions?

You’ll want to make sure to know the details of your retirement plan in each system. If you have any questions about dual membership, or to discuss your particular situation when you decide to retire, please contact us.

Top 5 Retirement Myths

retirement myths versus facts

Retirement law can be confusing. Sometimes a small misunderstanding can have a big impact on your benefit. That’s why it’s important to correct some common retirement myths. Here are the top five:

Retirement Myth #1

mythMy NYSLRS loan has gone into default, but I’ve already paid taxes on it. That means I no longer need to repay it.

factYou still need to repay your loan. In fact, it continues to accrue interest until you do. And, if you haven’t paid back your loan by the time you retire, your pension amount will be reduced.

Retirement Myth #2

mythI am required to contribute toward my retirement. When I do retire, my benefit will be based on what I contributed.

fact Your required member contributions aren’t a factor in the calculation of your pension. Your pension is based primarily on your service credit and the salary you earn while working for public employers. Your retirement plan and, in most cases, your age at retirement are also factors.

Retirement Myth #3

mythI can’t collect my pension until I start receiving Social Security.

fact You can collect your pension as soon as you meet the eligibility requirements of your retirement plan. Most members can retire as early as age 55, though there may be a permanent reduction in your benefit if you retire before full retirement age (62 or 63 depending on your tier). You should check the eligibility requirements for your plan and tier when you’re planning for retirement.

Retirement Myth #4

mythIf I am vested (have enough service to be eligible for a pension benefit) and no longer working for a public employer, NYSLRS will automatically start paying my pension as soon as I’m eligible.

fact Only you can decide when it’s time to retire. You must file an Application for Service Retirement (RS6037) to begin collecting your pension benefits.

Retirement Myth #5

mythI recently applied for retirement by giving my employer the paperwork.

factGiving your employer your NYSLRS forms does not mean that you have filed for retirement. To receive your NYSLRS pension, you must file your retirement application with the Office of the State Comptroller. Your application, or any form, is “filed with the Comptroller,” when it’s received by our Albany office or one of our consultation sites.

Have a concern that wasn’t covered? Visit our Contact Us page for more answers. If you have account-specific questions, you can also send us a message through our secure email form.

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 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.

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 on page 2 of your Member Annual Statement (MAS) or you can check 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 on page 4 of your MAS, in the Salary Information section.
Member Annual Statement example

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 police , SUNY police , State Encon Officers , State 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 the plan information in their MAS.)

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.

Retirement Plan Booklet

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.

Your Checklist to Apply for Retirement

After months of planning and preparation, you’re ready to apply for retirement. To get your NYSLRS  pension benefit, you need to send in an application. Let’s look at what you should include with the form to help make the retirement process go more smoothly.

Filling Out the Retirement Application

Unless you’re filing for a disability retirement, you’ll need to fill out the Application for Service Retirement (RS6037). As you fill out the form, make sure you:

  • Know your registration number. You can find it on your most recent Member Annual Statement or retirement estimate.
  • Know your past employment. To help ensure you receive the proper credit for your public service, please list your public employment history. Include any military service and memberships in other New York public retirement systems.
  • Include your beneficiary’s information. You won’t make an official beneficiary designation with this form, but including these details will help us give you specific amounts for the pension payment options  that offer a lifetime benefit for a beneficiary.
  • See a notary. The form must be filled out completely and signed by a notary public.

Proof of Birth

Make sure we have proof of your birth date. You can send it with your retirement application or before or after, but we cannot pay pension benefits without it. We accept photocopies of the following as proof:

Other Forms

Option Election

You’ll need to choose your pension payment option, or how you want your pension paid. Option election forms are available on our website, but we will also send you a form after we process your application. If you choose an option that provides your beneficiary a lifetime pension benefit when you die, you must provide proof of your beneficiary’s birth date.

Federal Income Tax Withholding

Your NYSLRS pension isn’t subject to New York State income tax, but it is subject to federal tax. You can fill out a W-4P form  any time to tell us how much to withhold from your monthly benefit. We don’t withhold income tax for other states. Visit the Retired Public Employees Association’s website to see whether your benefit will be taxed in another state.

Direct Deposit

Direct deposit is the fastest and most secure way to receive your pension benefits. You can enroll in our direct deposit program when you file for retirement. Just fill out a Direct Deposit Enrollment Application (RS6370), and return it to us.

Domestic Relations Order

If an ex-spouse is entitled to part of your pension, you should send us a copy of your domestic relations order (DRO) as soon as possible. The DRO gives us specific instructions on how to divide your benefits. We cannot finalize your pension until we review it and calculate the court-mandated distribution of your benefit. For more detailed information, please read our Guide to Domestic Relations Orders.

Questions

If you have other questions about applying for retirement, read our publication, Life Changes: How Do I Prepare to Retire? or contact us.

Tier 6 FAS Limits (ERS)

 

 

First, a year of earnings in the FAS period can’t exceed the average of the previous four year’s earnings by more than 10 percent. Anything beyond that will not be included in the pension calculation.

Additionally, several types of payments will not be part of the FAS calculation for ERS Tier 6 members:

  • Lump-sum vacation pay,
  • Wages from more than two employers,
  • Payment for unused sick leave,
  • Payments for working during a vacation,
  • Any payments that cause your annual salary to exceed that of the Governor (currently $179,000),
  • Termination pay,
  • Payments made in anticipation of retirement,
  • Lump-sum payments for deferred compensation and
  • Any payments made for time not worked.

Generally speaking, here’s what an ERS Tier 6 FAS will include: regular salary, holiday pay, overtime pay (regular and noncompensatory) earned in the FAS period and up to one longevity payment per year, if earned in the FAS period.

Overtime Limits

While overtime pay generally is part of an ERS Tier 6 FAS, the amount that can be included is limited. The limit is adjusted for inflation each year based on the change in the Consumer Price Index over the one-year period ending September 30 of the previous year. Under a new law, beginning January 1, 2018, the Tier 6 limit will be updated on a calendar year basis instead of on a fiscal year basis.

The 2018 calendar year overtime limit for Tier 6 members is $16,406.

For more information about the Tier 6 FAS, find your retirement plan booklet on our Publications page, or check out our Final Average Salary and Overtime Limits for Tier 6 pages.

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.

Transferring Your Membership

People make a lot of moves during their working lives. New towns, new jobs and, in some cases, new retirement systems.

Perhaps you were a teacher, but recently began working for New York State. Or maybe you had a job with New York City, but took a position with a municipality outside of the city. If you’ve recently joined NYSLRS and are still an active member of another public retirement system in New York State, you may be able to transfer that membership to NYSLRS.

Transferring to NYSLRS

To request a transfer to NYSLRS, contact the other system while you are still an active or vested member of that system. If you are still employed in a position covered by the other retirement system, or your membership in the other system has been terminated or withdrawn, you are not eligible to transfer.

When we receive your request to transfer from the other retirement system, we will compare your date of membership in NYSLRS with your date of membership in the other system. When the transfer is completed, your date of membership will be the earlier of the two dates. If applicable, your tier will also change.

Transferring from NYSLRS to Another Retirement System

To transfer from NYSLRS to another public pension system in New York State, you must complete and submit an Application for Transfer of Membership (RS5223).

Under certain circumstances, it may not be beneficial to transfer your membership to another retirement system. If you have any questions concerning your transfer, or if you are covered by a special plan, you should contact our Call Center toll-free at 1-866-805-0990 or 518-474-7736 in the Albany, New York area before completing the application.

Whether you are transferring in or out of NYSLRS, the transfer is effective upon receipt of your application and may be irrevocable.

You can find more information about transferring membership on our website.

Can I Change My Beneficiary After I Retire?

That depends. Some beneficiary decisions are irrevocable, while others can be changed at any time.

Some options, such as Five Year and Ten Year Certain, allow you to change your beneficiary after you retire. But if you choose an option that provides a lifetime benefit to a survivor, you cannot change your beneficiary even if your beneficiary dies before you do. For details, visit the Payment Option Descriptions page on our website.

But there are other possible death benefits for which NYSLRS retirees can name beneficiaries. Available death benefits and eligibility requirements vary by tier and retirement plan. You can find your retirement plan information on our Publications page.

NYSLRS retirees may have up to three types of death benefits that could provide a benefit for a beneficiary: pension payment option, survivor's benefit, and post-retirement death benefit.

When you retire, you must choose a payment option for your NYSLRS pension. If your choice is Single Life Allowance, there is no pension beneficiary. But other payment options provide a reduced monthly benefit in exchange for a possible payment to a beneficiary after the retiree’s death.

If you were employed by New York State, you may be eligible for a survivor’s benefit of up to $3,000. You do not need to sign up for this benefit; you are automatically enrolled if you are eligible. If you choose a pension payment option with a beneficiary, that person will also be the beneficiary for your survivor’s benefit. If your beneficiary dies before you do, you may select someone else as beneficiary for the survivor’s benefit. If you choose the Single Life Allowance option, you must name a beneficiary for your survivor’s benefit, and you may change this designation at any time.

What about after Retirement?

You may also be eligible for a post-retirement death benefit, which would be a percentage of the death benefit that was payable at retirement. (This benefit is generally not available to Tier 1 members or members in special retirement plans that allow for retirement after 20 or 25 years of service, regardless of age.) The beneficiary of your post-retirement death benefit does not have to be the same as your pension payment-option beneficiary. And you can change the beneficiary designation for your death benefit at any time.

The easiest way to check and update your beneficiary information for the post-retirement death benefit is with Retirement Online. You can also change your beneficiary by submitting a Designation of Beneficiary (RS5127) form.

Divorced? Some things to consider

Please note: If you are divorced, you may be required to choose a retirement option that provides continuing benefits to your ex-spouse after your death. Also, the beneficiary designation for certain benefits, including the survivor’s benefit, can be revoked when a divorce becomes final. For more information, please read the publication Divorce and Your Benefits on our website.