Tag Archives: New York State Common Retirement Fund

Ten Things Every NYSLRS Retiree Should Know

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Even after you retire, it’s important to stay informed about your NYSLRS benefits. Here are ten things every NYSLRS retiree should know.

NYSLRS retiree
  1. Your retirement benefits are guaranteed by the State Constitution. Under Article 5, Section 7, your pension benefit cannot be “diminished or impaired.”
  2. The Common Retirement Fund, the pool of money your retirement benefits are paid from, is safe and secure. It has been widely recognized as one of the best-funded and best-managed public pension funds in the nation.
  3. Your NYSLRS pension is not subject to New York State or local income taxes, but it may be subject to federal income tax. Visit our Taxes and Your Pension page for more information.
  4. If you move to another state, your pension may be subject to that state’s income tax. Find out which states tax NYSLRS pensions.
  5. More than 95 percent of NYSLRS retirees use direct deposit for their monthly payment and their payments promptly arrive in their accounts on the last business day of each month. You can find out when your next pension payment is coming by checking our online pension payment calendar.
  6. You can stay informed about your benefits with Retirement Online. Creating an account is easy, and in many cases, you can use Retirement Online instead of sending in forms or calling NYSLRS.
  7. If you need proof of your retirement income to rent an apartment or get a mortgage, you can generate a pension verification letter in Retirement Online.
  8. Once you become eligible for a cost-of-living adjustment (COLA), you will receive annual increases in your pension amount. When your net benefit amount changes, NYSLRS will inform you.
  9. Your beneficiaries may be entitled to a death benefit after you die.
  10. A Guide for Retirees is a handy resource on our website. It provides important information about your benefits and the services NYSLRS provides for its retirees.

Not retired yet? Read our blog post Ten Things Every NYSLRS Member Should Know.

A Century of Security and Stability

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A century after its creation, the New York State and Local Retirement System (NYSLRS) is widely recognized as one of the best-managed and best-funded public pension systems in the nation. Comptroller DiNapoli recently announced that the New York State Common Retirement Fund (Fund), which holds and invests the assets of NYSLRS, had an estimated value of $268.3 billion as of June 30, 2021. The security and stability of NYSLRS and the Fund are due, in large part, to the stewardship of Comptroller DiNapoli, as well as a long line of State Comptrollers that came before him. The System has also been bolstered by some key events along the way.

NYSLRS History - key events contributing to the security and stability of the Retirement System and the Fund

In the Beginning

NYSLRS’ security and stability were built in at the start. In 1918, the State Legislature created the Commission on Pensions and charged it with recommending a pension system for State workers.

After surveying pension plans in New York and other states, the Pension Commission recognized the need to calculate the cost of the pension plan through actuarial calculations, which take into account such things as employees’ salaries and how long they are expected to be retired. They also saw the need to make provisions to cover those costs through contributions and other income. They recommended a plan supported by the contributions of employers (New York State and, eventually, local governments) and employees. The improved actuarial calculations the System uses today helps to ensure that member contributions and employer annual contributions are sufficient to keep the System adequately funded.

The Pension Commission also recommended a service retirement benefit be made available to workers who reached a certain age, based on average earnings and years of service. Though they didn’t use the term, their pension plan was very similar to the defined-benefit plan NYSLRS members have now.

Unlike the 401k-style defined-contribution plans common in the private sector today, a defined-benefit plan provides a guaranteed, lifetime benefit. With a defined-benefit plan, you don’t have to worry about your money running out during retirement, and your employer has an excellent tool for recruiting and retaining workers.

Constitutional Protection

In 1938, New York voters approved several amendments to the State Constitution, including Article 5, Section 7, which guarantees that a public pension benefit cannot be “diminished or impaired.” This constitutional language protects the interests of the Fund and its members and beneficiaries, ensuring that the money the Fund holds will be there to pay the pensions for all current and future retirees. The courts have upheld this constitutional provision to protect the Fund several times over the years.

For NYSLRS members and retirees, that means the retirement benefits you were promised when you started your public service career cannot be reduced or taken away.

Sound Investments

Sound investments are crucial to the health of the Fund, but in some cases changes in the law were needed to give Fund managers the flexibility to make the best investments. In 1961, the Fund was allowed to invest in the stock market, opening up the door for growth opportunities. Roughly half of the Fund’s assets are currently invested in stocks.

In 2005, the Legislature expanded the types of investments the Fund could make, allowing the Fund to increase investments in real estate, international stocks and other sectors that had been providing high returns.

Today, under Comptroller DiNapoli’s leadership, the Fund’s investment returns cover the majority of the cost of retirement benefits. After suffering a drop in value at the beginning of the COVID pandemic, the Fund had its best year in history, with estimated investment returns of 33.55 percent for fiscal year 2021.

NYSLRS is well-positioned to face the challenges of the future and provide retirement security for more than 1.1 million members, retirees and beneficiaries.

Your Contributions to NYSLRS

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Most NYSLRS members contribute a percentage of their earnings to the Retirement System. Over time, those contributions, with interest, can add up to a tidy sum. But what happens to that money? Will you get your contributions back when you retire? The answer to that question is “no.” Let’s look at what happens to your NYSLRS contributions.

How NYSLRS Retirement Plans Work

NYSLRS plans are defined benefit pension plans. Once you’re vested, you’re entitled to a lifetime benefit that will be based on your years of service and final average earnings. The amount of your contributions does not determine the amount of your pension. (Use Retirement Online to estimate your pension.)

Your NYSLRS plan differs from defined contribution plans, such as a 401-k plan, which are essentially retirement savings plans. In those plans, a worker, their employer, or both contribute to an individual retirement account. The money is invested and hopefully accumulates investment returns over time. This type of plan does not provide a guaranteed lifetime benefit and there is the risk that the money will run out during the worker’s retirement years. Experts recommend that workers who have defined contribution plans contribute anywhere from 10 to 20 percent of their income to their plan. NYSLRS members, in contrast, contribute between 3 and 6 percent of their income, depending on their tier and retirement plan.

Where Your Contributions Go

When you retire, your contributions go into the New York State Common Retirement Fund. The Fund is the pool of money that is invested and used to pay retirement benefits for you and other NYSLRS members.

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Your Contribution Balance

You can find your current contribution balance in Retirement Online. But if your contributions don’t determine your pension, what difference does it make what the balance is? For one thing, your contribution balance helps determine the amount you can borrow if you decide to take a loan from NYSLRS. Also, you may be able to withdraw your contributions, with interest, if you leave the public workforce before retirement age.

Withdrawing Your Contributions

You cannot withdraw your contributions while you are still working for a public employer in New York State. If you leave public employment with less than ten years of service, you can withdraw your contributions, plus interest. If you withdraw, you will not be eligible for a NYSLRS retirement benefit.

If you have more than ten years of service, you cannot withdraw, but you will be entitled to a pension when you reach retirement age. But remember, you will not receive this pension automatically; you must file a retirement application before you can receive any benefit.

Your Pension Fund is Strong
Your Pension is Secure

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The COVID-19 pandemic has caused economic uncertainty as well as a public health emergency. Businesses are struggling, more people are unemployed, and markets are volatile. Yet among all the uncertain news we seem to hear daily, there is something NYSLRS members and retirees can have confidence in: your Retirement System and pension fund are strong and secure.

Since it was established in January 1921, NYSLRS has proven its strength and durability. Over the past century, the Retirement System has weathered the Great Depression of the 1930s, the Dotcom bubble burst of 2001, the Great Recession of 2008-2009 and more than a dozen other economic downturns. Each time, NYSLRS recovered and emerged stronger than before.

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Investing for the Long Term

The New York State Common Retirement Fund, which holds and invests the Retirement System’s assets, has been impacted by this largely unprecedented crisis, but the Fund remains strong. While weighing the risk and benefit of every investment, the Fund employs a diversified investment strategy that is designed for the long-term, allowing it to take advantage of growth opportunities in good times, which helps it to better navigate through hard times.

NYSLRS entered the current crisis in a position of strength. Independent analysts, such as the Pew Charitable Trusts, have long recognized NYSLRS as one of the best-managed and best-funded public retirement systems in the nation. The strength of the Fund provides stability and enhances its ability to recover from market swings.

In recent months, before the COVID-19 outbreak, the Fund’s professional managers recognized increased volatility in the stock market. The managers made adjustments in the Fund’s investment portfolio in preparation for an expected economic downturn and are actively managing the Fund through these difficult times. The Fund has more than enough assets to pay retiree benefits.

What This Means for You

New York State Comptroller Thomas P. DiNapoli has a fiduciary responsibility to manage the Fund’s assets on behalf of NYSLRS members and retirees. Protecting the Fund is the Comptroller’s number one priority. As a NYSLRS member or retiree, your lifetime retirement benefits are guaranteed by the State constitution, and those benefits cannot be diminished.

NYSLRS continues to be well-positioned to meet both its short-term and long-term obligations. If you are already retired, you will continue to receive your pension payments on schedule. If you are a member, your pension will be there for you when you retire and throughout your retirement years.

We’ve faced similar challenges in the past. We will get through this one.

Protecting the Pension System

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Protecting the Pension SystemSince taking office, New York State Comptroller Thomas P. DiNapoli has fought against the abuse of public funds. One of his top priorities is to protect the New York State and Local Retirement System (NYSLRS) from pension scammers.

To date, DiNapoli’s investigations of retirement fraud have led to 24 arrests and the recovery of nearly $3 million in retirement funds. Here are some cases from earlier this year:

Woman Pleads Guilty to Theft of Dead Mother’s Benefits

A Madison County woman pleaded guilty to a felony grand larceny charge for collecting $67,000 of her dead mother’s NYSLRS pension checks. When her mother died in 2009, Tammy Banack did not inform NYSLRS or her bank, and her mother’s pension checks continued to be deposited in a joint checking account. Banack agreed to repay the stolen pension benefits and received five years’ probation.

Man Pleads Guilty to Stealing Pension Checks

A Brooklyn man was arrested for cashing over $22,000 of his mother’s NYSLRS pension checks after she died. Jimmie Buie pleaded guilty and was sentenced to up to three years in prison. He was also ordered to repay the money. The office of New York State Attorney General Eric T. Schneiderman assisted in this case and the Banack case.

Town Clerk Admits Faking Retirement Benefits

Following a review of monthly retirement reports, the Office of the State Comptroller discovered that a town clerk had been unlawfully using a town computer to inflate her retirement service credit. Springport Town Clerk Deborah Waldron pleaded guilty, resigned and paid fines and surcharges. Her actual hours and benefits were recalculated to ensure she does not receive extra money she did not earn.

Brother Guilty of Bank Larceny in Pension Scheme

Joseph F. Grossmann, a former Albany resident, pled guilty to Bank Larceny after he used fake documents and other schemes to collect $130,624 in his deceased sister’s name. He was sentenced to three years of probation (including one year of home confinement) and ordered to pay back the money.

To learn more about how Comptroller DiNapoli safeguards public funds, and how you can help, visit the Comptroller’s Fighting Public Corruption page. You can also read about past pension fraud investigations.

Stopping Pension Fraud

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Stopping Pension Fraud is a top priority of Comptroller Thomas P. DiNapoliSince taking office, New York State Comptroller Thomas P. DiNapoli has battled public corruption. One of his top priorities is to protect the New York State and Local Retirement System (NYSLRS) from pension scammers.

Under the direction of Comptroller DiNapoli, NYSLRS has put in place a system of safeguards designed to prevent and identify potential incidents of pension fraud. One such safeguard uses data analytics to uncover and stop improper payments.

Post-Retirement Employment Violations

Our investigative efforts include a focus on post-retirement employment. New York State law restricts the amount of money public sector retirees can earn if they return to public service employment after retirement. The law permits public sector retirees under the age of 65 to earn up to $30,000 per year from public employment before their pension benefits are suspended.

As of this March, our review of post-retirement employment cases have uncovered more than $700,000 in benefit payments subject to recovery. For example, a former Newburgh City Fire Chief, who double-dipped by collecting $95,000 in pension payments while still working as fire chief, was federally convicted.

The “Muscle” in the Pension Fraud Fight

In some cases, the pension fraud NYSLRS uncovers gets referred to Comptroller DiNapoli’s wider umbrella program to root out public corruption and fraud involving public funds. The Comptroller’s aggressive initiative included partnering with federal, state and local prosecutors and law enforcement statewide, including DiNapoli’s groundbreaking “Operation Integrity” task force with Attorney General Schneiderman. To date, Comptroller DiNapoli’s various partnerships have garnered more than 130 arrests and $30 million in ordered recoveries.

NYSLRS’ partnership with DiNapoli’s “Operation Integrity” has resulted in the investigation, prosecution and recovery of stolen pension payments, exposing $2.75 million in pension fraud in recent years.

Here are some recent cases where pension scammers have been thwarted:

Comptroller DiNapoli and NYSLRS will not tolerate pension fraud. These arrests and convictions serve as warnings to those who might steal pension benefits: if you think you can steal the hard-earned benefits of NYSLRS members and retirees, you are gravely mistaken. When fraud is identified, Comptroller DiNapoli will work with law enforcement to hold the pension scammers accountable. The clear message to anyone who tries to defraud our pension system is that you will be found, and you will pay.

If you suspect someone of pension fraud, call the Comptroller’s toll-free Fraud Hotline at 1-888-672-4555, file a complaint online at investigations@osc.state.ny.us, or mail a complaint to: Office of the State Comptroller, Division of Investigations, 14th Floor, 110 State St., Albany, NY 12236.

NYSLRS Basics: Member Contributions

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As a NYSLRS member, you may be making or have made contributions as part of your membership. When you make contributions, a percentage of your salary joins a pool of money called the Common Retirement Fund (the Fund). The Fund is also made up of employer contributions and investment income. By investing contributions, the Fund helps to meet its obligation of paying out benefits to past, present and future retirees.

What this means for you is that you, and other members like you, are all doing your part to fund your future retirement.

Types of Member Contributions

If you belong to a contributory retirement plan, you make required contributions. This means you must make contributions for the length of time listed in your retirement plan. Some members may contribute for only part or all their public service careers. If you belong to a non-contributory plan, this means you aren’t required to make contributions. Instead, you could make voluntary contributions over the course of your career, if your plan allows it. This would provide you with an annuity in addition to your pension when you retire.

(Check out the “Contributing Toward Your Retirement” section in your specific retirement plan publication to see what contributions you make.)

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Withdrawing Your Member Contributions

What happens to your contributions if you leave public employment? One option is to take your contributions with you. If you have less than ten years of service credit or aren’t vested, you can withdraw your contributions plus the interest they’ve earned. However, withdrawing your contributions also terminates your membership with NYSLRS. Once your membership ends, you won’t be eligible for a retirement benefit.

Another option is to leave your contributions where they are. After all, if you leave public employment, there’s a chance you may return as well. If you do, then your contributions will be waiting for you when you rejoin NYSLRS. If you don’t return to public service, aren’t vested, and have been off the public payroll for seven years, by law we must terminate your membership. Any contributions left will stop accruing interest.

If you have ten or more years of service credit, you can’t withdraw your contributions from NYSLRS. In that situation, if you’re vested before you leave public employment, you can apply for a retirement benefit at a later date (age 55 for most members).

(Read our publication “What If I Leave Public Employment?” for more information, particularly the taxability of withdrawing your contributions.)

If you have questions, visit our website to learn more about member contributions. Want to read more NYSLRS Basics? Check out our earlier posts on:

Protecting the Pension System

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Since taking office, New York State Comptroller Thomas P. DiNapoli has fought against the abuse of public funds. One of his top priorities is to protect the New York State and Local Retirement System (NYSLRS) from pension scammers. With the help of New York State Attorney General Eric Schneiderman, DiNapoli has restored $6 million to the pension system.

Earlier this year, they charged a Polk County, Florida woman with the theft of $120,000 from the pension system. The woman didn’t notify NYSLRS about her uncle’s death, and took out the pension benefits paid to his bank account for 12 years.

“Attorney General Schneiderman and I will continue our partnership to protect public money, including the retirement funds that so many New Yorkers depend upon,” DiNapoli said.

Here are some other pension scamming cases from May:

Defendant Accused of Stealing Deceased Mother’s Benefits

A New Jersey woman allegedly stole over $162,000 in pension benefits. According to the Comptroller and Attorney General’s Office, she failed to notify NYSLRS of her mother’s death. As a result, she continued to receive her mother’s benefits for six years even though her mother didn’t list her as a beneficiary.

If convicted, she could face up to five to 15 years in state prison.

Man Accused Of Stealing Deceased Godfather’s Retirement Benefits

A New Jersey man allegedly stole $78,000 in pension benefits payable to his godfather. When his godfather died in 2003, his godfather’s wife collected the benefits until her death in 2006. The man did not notify NYSLRS of their deaths, and used his power of attorney to access their bank account. He withdrew the pension benefits for six years.

If convicted, he could face up to five to 15 years in state prison.

Double-Dipping Retiree Owes Almost Half a Million Dollars

A retired police officer will repay $456,647 to NYSLRS. From 1996 to 2012, the retiree received a pension while earning a full-time salary at a public community college. Even though he knew of the retiree earnings limit, he exceeded it and didn’t report his public income to the state.

The retiree forfeited all future pension payments he would have earned, and will use them to pay back his debt.

If you want to learn more about how Comptroller DiNapoli safeguards public funds, visit the Comptroller’s Fighting Public Corruption page.

Contributing Towards Your Retirement

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What are Member Contributions?

Most New York State and Local Retirement System (NYSLRS) members contribute a percentage of their gross earnings to the New York State Common Retirement Fund (Fund). These member contributions, in addition to employer contributions and investment earnings, help make sure the Fund stays well-funded to support the retirement benefits earned by members and retirees.

Types of Member Contributions

Membership-Contributions_TimelineYour tier and retirement plan determine if you must contribute and what percentage of your earnings you contribute. At NYSLRS, there are two types of member contributions: required and voluntary. If you belong to a retirement plan with required contributions, you must make member contributions for the length of time stated in your retirement plan. If you make voluntary contributions, you belong to a retirement plan where you don’t have to make contributions, but you can volunteer to make contributions.

To help you understand how much you are supposed to be contributing, here is some useful information regarding contributions, broken down by what system you are in:

Employees Retirement System (ERS)

  • Most ERS Tier 1 and 2 members are not required to contribute, but may contribute voluntarily. ERS Tier 1 and 2 members receive an annuity based on their voluntary contribution balance in addition to their pension at retirement.
  • All ERS Tier 3 and 4 members are required to contribute 3 percent of their gross earnings until they’ve been NYSLRS members for ten years, or have ten years of service credit (whichever comes first).
  • ERS Tier 5 members are required to contribute 3 percent of their gross earnings for their entire career.
  • ERS Tier 6 members are required to contribute for their entire career a specific percentage of their earnings based on their salary.

ERS Exceptions

  • Though most ERS Tier 5 and Tier 6 members are required to contribute for all their years of service, the contributions of State Correction Officers in these tiers are limited to 30 years of service.
  • ERS Tier 5 Uniformed Court Officers and Peace Officers employed by the Unified Court System must contribute 4 percent of their salary for all their years of public service.

Police and Fire Retirement System (PFRS)

  • Most PFRS Tier 1 and Tier 2 members, as well as PFRS Tier 3 (Article 11) members, are not required to contribute, but may contribute voluntarily.
  • PFRS Tier 3 (Article 14) members must contribute 3 percent of their gross reportable earnings for 25 years or until retirement (whichever comes first).
  • PFRS Tier 6 members are required to contribute a specific percentage of their earnings based on their salary for their entire career.

PFRS Exceptions

  • Though most PFRS Tier 5 members must contribute 3 percent of their gross reportable earnings for all their years of public service, PFRS Tier 5 members enrolled in a retirement plan limiting the amount of creditable service they may accrue will not be required to contribute once they reach the maximum amount of service allowed by their plan.
  • If a union-negotiated collective bargaining agreement in effect on January 9, 2010 required an employer to offer a 20- or 25-year plan, any new employees who join while that agreement is in place will not have to contribute.