Tag Archives: New York State and Local Retirement System

The 3-Legged Stool: An Approach to Retirement Confidence

Most American workers believe they will have enough money to live comfortably after they retire, but do you share their retirement confidence?

As a NYSLRS member with a defined benefit pension plan, you have reason to be optimistic about retirement. But there is more to a financially secure retirement than having a pension. Think of retirement security as a three-legged stool, with three parts working together to provide financial stability when your working days are over. Understanding each of these sources of income will help you better plan for your future and boost your retirement confidence.

retirement confidence

Leg 1: Your NYSLRS Pension

At retirement, vested NYSLRS members are eligible for a pension based on their final average earnings and the number of years they’ve worked in public service. Your pension is a lifetime benefit, which means you’ll receive a monthly payment for the rest of your life, no matter how long you live. Unlike workers who rely on a 401(k)-style retirement plan, you won’t have to worry about your money running out.

Most members can use Retirement Online to estimate how much their pension will be. But if you’re a long way from retirement, it may be better to think in terms of earnings replacement. Financial advisers estimate you’ll need to replace 70 to 80 percent of your income to retire with financial confidence. Your pension can help get you there. For example, if you retire with 30 years of service, your NYSLRS pension could replace more than half of your earnings. (Replacement percentages vary among retirement plans. You can find out more in your retirement plan booklet.)

Leg 2: Social Security

Less than half of Americans believe Social Security will be there for them when they retire, according to a recent poll, and younger workers are even more pessimistic about Social Security’s future. While there’s no denying that Social Security faces challenges, things aren’t as bleak as some people think.

Social Security trustees estimate that Social Security reserves will be depleted by 2035 and they will only be able to pay about 76 percent of scheduled retirement benefits. But consider this: Social Security now replaces about 36 percent of the wages of a typical worker who retires at full retirement age. In the future, even if it only replaces 25 to 30 percent of pre-retirement earnings, it would still be a significant source of retirement income.

But these are worse case scenarios. The truth is that lawmakers have many policy options that could reduce or eliminate the long-term financing shortfalls in Social Security. It seems likely those options will be explored.

Leg 3: Retirement Savings

Having a secure, lifetime pension will be a substantial financial asset, but it’s still important to save money for retirement. A retirement nest egg can help in case of an emergency, act as a hedge against inflation and boost your retirement confidence.

Saving is the retirement factor you have the most control over. You decide when to start, how much to save and how your money will be invested. The key is to start saving early, so your money has time to grow, even if you can only afford to save a small amount in the beginning.

With the New York State Deferred Compensation Plan, you can start out by saving as little as $10 per pay period. That money would be automatically deducted from your paycheck, so you won’t even have to think about it. The money is tax-deferred, which means you don’t pay income taxes on your Plan account contributions or earnings until you begin to take payments from your account. This may lower your taxable income now and in retirement. The Deferred Compensation plan is not affiliated with NYSLRS, but New York State employees and some municipal employees can participate. If you’re a municipal employee, ask your employer if you’re eligible for the Deferred Compensation Plan or another retirement savings plan.

Make Sure You Receive Your Member Annual Statement

Member annual statements are distributed to NYSLRS members each spring (retiree statements are delivered by early March). It’s important that you make sure your contact information is correct to ensure you receive your Statement. (Note: Updating your contact information with your employer doesn’t update it with NYSLRS.)

Use Retirement Online to Check or Update Your Contact Information

The fastest way to check your contact information, and update it if needed, is through Retirement Online. Sign in to your Retirement Online account, go to the ‘My Profile Information’ area of your Account Homepage and click “Update” next to your mailing address or email address to make corrections.  

If you have trouble signing in to your account, please read our Retirement Online Tools and Tips blog post for help.

If you don’t have a Retirement Online account, it’s easy to create one. Visit our Retirement Online for Members page and click ‘Register Now’ under the Sign In button. When you create your account, you’ll be asked to provide the ZIP code of your home address. If it doesn’t recognize your current ZIP code, it’s likely we have an older address on file for you. Please use the older ZIP code to create your account — you can update your address after you register. If you need assistance with Retirement Online, please contact us.

You can also update your contact information using our secure contact form, as long as your new mailing address is not a PO Box. Be sure to complete all fields and include your old and new contact information.

contact information

Get Your Statement Faster

You’ll receive your Statement faster if you choose the email option in Retirement Online. If you choose this option, you’ll receive an email that directs you to Retirement Online to see your Statement as soon as it’s ready. To choose your Statement delivery preference, go to the ‘My Profile Information’ area of your Retirement Online Account Homepage and click “Update” next to ‘Member Annual Statement by.’

You can also receive other correspondence from us by email by clicking “Update” next to ‘Contact by.’ If you choose ‘Mail’ or don’t select a preference, you will receive letters through the US Postal Service.

Note: For security purposes, certain correspondence (like tax forms) will only be sent by mail.

Questions about Your Statement?

Visit our Member Annual Statement page for answers to common questions. Remember that your Statement provides information as of March 31, 2021 — the end of the State fiscal year. However, you can sign in to Retirement Online throughout the year to view current account information.

Please share this post with friends, family or coworkers who are NYSLRS members so they can also check their contact information.

A Snapshot of NYSLRS Retirees

NYSLRS’ Comprehensive Annual Financial Report (CAFR), published each fall, has a wealth of information about the Retirement System. Much of it is technical, and it crunches a lot of numbers, but it’s also a good place to learn about NYSLRS retirees.

Here are a few tidbits from the latest edition, which includes data from the State fiscal year that ended March 31, 2020.

NYSLRS Retirees by the Numbers

NYSLRS was providing pension benefits to 487,407 retirees and beneficiaries as of the end of the fiscal year.

Nearly 79 percent of NYSLRS retirees and beneficiaries — some 384,286 — live right here in New York State, and they can be found in every county. Long Island is home to more than 60,000 retirees and beneficiaries, while more than 50,000 live in the Capital District.

Our retirees can also be found in every state. Florida, not surprisingly, is the number two choice — more than 38,000 call the Sunshine State home. North Dakota has the least, with only 21 retirees and beneficiaries. Another 639 live outside the United States.

Where NYSLRS Retirees Reside

NYSLRS Pensions at Work

In the last fiscal year, NYSLRS paid out $13.4 billion in benefits to retirees and beneficiaries, including $10.8 billion in New York State.

These retirees live in our communities, and their pension money flows right back into our neighborhoods. Retirees in New York pay local property and sales taxes, and their spending supports local businesses, stimulates the economy and generates thousands of jobs. Learn more.

An Award-Winning Publication

NYSLRS has received a Certificate of Achievement for Excellence in Financial Reporting for the CAFR for the last 16 years. It’s a national award recognizing excellence in the preparation of state and local government financial reports.

To find out more about retirees, members and NYSLRS’ investments, check out the latest CAFR on our website.

Popular Blog Posts from 2020

Here are some of our most popular blog posts from the past year. Not surprisingly, during 2020 members and retirees were interested in information about doing business with NYSLRS online. Fortunately, new Retirement Online features made that a lot easier during a challenging time.

most popular blog posts of 2020
  1. Retirement Online Makes Retirement Fast, Easy
    You can now file your service retirement application in Retirement Online. This convenient new feature can reduce paperwork and save you a trip to the post office.

  2. What to Know About ERS Tier 6
    Employees’ Retirement System (ERS) Tier 6 includes members who have joined NYSLRS since April 1, 2012. It now accounts for 45 percent of all ERS membership. This is a basic overview of retirement benefits for ERS Tier 6 members.

  3. Do We Have Your Correct Contact Information?
    Keeping your mailing address and other contact information up to date ensures that you receive important information from NYSLRS about your benefits. Once again, Retirement Online makes the task easy to accomplish.

  4. Doing Business With NYSLRS
    Retirement Online is a secure, easy way to check your benefit information and conduct transactions in real time. Here’s a rundown of the many features it offers.

  5. Estimate Your Pension in Retirement Online
    How much will your pension be? Most NYSLRS members can use the pension calculator in Retirement Online to get a benefit estimate based on information we have on file for them. You can enter different retirement dates to compare potential benefits.

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).