Tag Archives: PFRS

Supplement Your NYSLRS Pension with Retirement Savings

Your NYSLRS pension can provide a significant portion of your retirement income, but it’s also a good idea to supplement your pension and Social Security with a retirement savings account.

Retirement savings can be an important financial asset when you retire. Savings can enhance your retirement lifestyle and give you the flexibility to do the things you want. Your savings can provide money for you to travel, continue your education, pursue a hobby or start a business. The money you set aside can also be a resource in case of an emergency, act as a hedge against inflation and boost your retirement confidence.

Set a Retirement Savings Goal

How much to save is a personal decision, but here are some things to consider.

Financial advisers often recommend saving 10 to 15 percent of your gross earnings throughout your career to retire comfortably. However, that advice is aimed at people with 401(k)-style defined contribution retirement plans as their main source of retirement income.

As a NYSLRS member, you’re part of a defined benefit plan, also known as a traditional pension plan. Your pension, based on your years of service and earnings, will provide a lifetime benefit. You can estimate your pension in Retirement Online to get an idea of the income it will provide in retirement.

Having a pension means you may not need to save as much as someone with only a 401(k). Use a retirement savings calculator to see how much a retirement savings plan could yield over time, or test the results of different savings amounts.

Below you can see potential savings results of someone who invests 50 dollars every two weeks over 30 years. While the stock market can be turbulent over the long term, stock market returns average about 10 percent a year.

Saving for Retirement

As you get closer to retirement, you should develop a plan to withdraw money from your retirement savings. A withdrawal plan will give you a better idea of the income you might expect from your nest egg.

Here is one possible withdrawal strategy, which was designed to provide retirement income for 20 years. Please note, if your retirement is far in the future, the money you withdraw may not have the same value that it has today. However, while inflation has been high recently, it does cycle and has been lower in the past.

Withdrawing from Retirement Savings

If you find you’ll need to save more to meet your goal, you can make adjustments to help ensure you’ll have enough savings in retirement.

Deferred Compensation – A Way to Save

State employees and many municipal employees are eligible to save for retirement through the New York State Deferred Compensation Plan. Once you’ve signed up, your retirement savings, which may be tax-deferred, depending on your plan, will be automatically deducted from your paycheck. (The Deferred Compensation Plan is not affiliated with NYSLRS.)

Check with your employer’s human resources or personnel office to see if they participate in the Deferred Compensation Plan or if they offer other savings options.

Read More About Retirement Savings

You can find more information about saving for retirement in these posts:

10 Things All NYSLRS Retirees Should Know

Retirees, brush up on your Retirement System knowledge!

10 Things All NYSLRS Retirees Should Know
  1. Get Your 1099-R Tax Form in Retirement Online
    Starting in 2024, your 1099-R tax form will be available in Retirement Online! Get yours faster and help us ‘go green’ — update your delivery preference now to receive an email when it’s ready, instead of waiting for it in the mail. (If you choose to receive your 1099-R by email, you will not receive a printed copy in the mail. Regardless of your delivery preference, you will be able to view and print your 1099-R by signing in to Retirement Online at the end of January.)
  2. Change Your Federal Tax Withholding in Retirement Online
    Retirement Online is the fastest way to update your withholding. Changes submitted by the middle of the month will generally appear in that month’s payment. Most NYSLRS pensions are subject to federal income tax (some disability benefits are not taxable).
  3. Not Taxed by New York State
    Your NYSLRS pension is not subject to New York State or local income taxes. Visit our Taxes and Your Pension page for more information. If you move to another state, your pension may be subject to that state’s income tax. If you’re thinking of moving to another state, check with that state’s tax department.
  4. Get Your Retiree Annual Statement in Retirement Online
    Starting in 2024, you can use Retirement Online to view and print your annual statement. Help us go green and update your delivery preference to receive an email when it’s available, instead of waiting to receive it in the mail.
  5. Manage Your Direct Deposit in Retirement Online
    Use Retirement Online to securely update your direct deposit bank account information. Whether you’ve switched banks or need to move your deposits to a different account, you can make those changes quickly with Retirement Online. Changes are generally applied within one to two payments. You can find out when your next pension payment is coming by checking our online pension payment calendar.
  6. Prove Your Pension Income Using Retirement Online
    You may need proof of your retirement income for housing or as part of an application for the Home Energy Assistance Program (HEAP). With Retirement Online, you can print or save an income verification letter any time you need one.
  7. Receiving Your Annual Cost of Living Increases
    Once you become eligible for a cost-of-living adjustment (COLA), you will receive a permanent increase to your pension amount every September. When your net benefit amount changes, NYSLRS will inform you.
  8. View Your Pension Payment “Pay Stub” in Retirement Online
    Sign in to Retirement Online to access full pay stubs for your pension payments. Select the date of the payment you want to review to see a breakdown of your pension payment, including your most recent COLA amount as well as any deductions made for health insurance, union dues, tax withholding or disbursements under a domestic relations order.
  9. You May Leave a Death Benefit
    Your survivors may be entitled to a death benefit after you die. Retirement Online makes it easy for eligible retirees to view their beneficiary selections, choose different beneficiaries or change contact information for an existing beneficiary. Anyone can report the death of a retiree by using our online death report form.
  10. Best-Funded, Best-Managed
    The New York State Common Retirement Fund holds and invests the assets of NYSLRS on behalf of members, retirees and their beneficiaries and continues to be one of the best-funded and best-managed public pension funds in the nation. Comptroller Thomas P. DiNapoli is the administrative head of NYSLRS and trustee of the Common Retirement Fund.

Not retired yet? Read our blog post 10 Things All NYSLRS Members Should Know.

10 Things All NYSLRS Members Should Know

Brush up on your Retirement System knowledge! Here are 10 things all NYSLRS members should know.

10 Things All NYSLRS Members Should Know
  1. Lifetime Retirement Benefit
    You are part of a defined benefit pension plan, which provides a lifetime benefit at retirement based on your earnings and years of service.
  2. Qualify for a Retirement Benefit by Becoming Vested
    Becoming vested is a key milestone in every NYSLRS member’s career. Once you’re vested, you have earned enough service to qualify for a retirement benefit, once you meet the minimum age requirements established by your retirement plan.
  3. Tier Determines Benefits
    Your tier determines your eligibility for benefits under your plan and how those benefits are calculated.
  4. Conduct NYSLRS Business Using Retirement Online
    Retirement Online is the fastest and most convenient way to do business with NYSLRS. It only takes a few minutes to open your account. Use Retirement Online instead of calling or mailing for instant access to benefit information and convenient tools to make account changes.
  5. Estimate Pension Using Retirement Online Calculator
    Most members can use Retirement Online to create benefit estimates based on the most up-to-date information we have on file. You can enter different retirement dates and payment options to see how those choices would affect your benefit.
  6. Use Plan Publication to Learn about Benefits
    Your retirement plan publication is a comprehensive source for information about your benefits.
  7. Pension Calculated Using Highest Earnings
    Your final average earnings (FAE) is another major factor in calculating your NYSLRS pension. 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. 
  8. Request Past Service Credit Before Retirement
    Service credit is one of the major factors in calculating your NYSLRS pension. You earn a year of service credit for each year of full-time employment with a participating employer. In some cases, you may also be able to request additional credit for past service.
  9. NYSLRS Membership Includes Death and Disability Benefits
    NYSLRS membership provides more than just retirement benefits. If you become seriously ill or injured, you may be eligible for a disability benefit. And, you may also be eligible to leave a beneficiary a death benefit if you die while working for a public employer.
  10. Best-Funded, Best-Managed
    The New York State Common Retirement Fund holds and invests the assets of NYSLRS on behalf of members, retirees and their beneficiaries and continues to be one of the best-funded and best-managed public pension funds in the nation. Comptroller Thomas P. DiNapoli is the administrative head of NYSLRS and trustee of the Common Retirement Fund.

NYSLRS is one of the largest public retirement systems in America, serving more than 1.2 million members, retirees and beneficiaries. Read A Look Inside NYSLRS to learn more about your retirement system.

Vested: Qualifying for a Retirement Benefit

Becoming vested is a crucial milestone for NYSLRS members. It means you have earned enough service to qualify for a retirement benefit once you meet the age or service requirements established by your retirement plan. Vesting is automatic — you don’t have to fill out any paperwork to become vested.

Vested: Qualifying for a Retirement Benefit

Years of Service Credit to Become Vested

NYSLRS members in Tiers 2 – 6 need five years of service credit to be vested.  

If you work part-time, or if you have an unpaid leave of absence, it will take longer to become vested. For example, if you work half-time, you earn six months of credit toward vesting for each year on the job.

Sign in to your Retirement Online account to check your total estimated service credit and whether you are vested.

If you work for a school district, read our How School Employees Earn NYSLRS Service Credit blog post for information about how your service credit is determined. 

Note: Previously, Tier 5 and 6 members needed ten years of service to be eligible for a service retirement benefit. However, as of April 9, 2022, these members only need five years of service credit to be vested. The new law did not change benefit rules such as how long members must contribute, pension benefit calculations, the full retirement age, reductions to retire early or the cost to purchase previous service.

Applying for Retirement

Vesting is automatic, but you will need to apply for retirement to receive your pension — NYSLRS will not pay out your pension benefit unless you apply for it.

Pension eligibility requirements and benefit calculations depend on your tier and retirement plan. To find your tier and retirement plan, sign in to your Retirement Online account and go to the ‘My Account Summary’ section. Once you know your tier and retirement plan, you can find your retirement plan publication for comprehensive information about your benefits and filing instructions.

And when you’re ready, you can apply for a service retirement benefit quickly and easily using Retirement Online.

If you leave public employment, read about the age requirements for filing for a vested retirement benefit as well as other important information that you should know about your NYSLRS membership and benefits.

A Look Inside NYSLRS

The New York State and Local Retirement System (NYSLRS) administers two distinct systems. They are:

  • The Employees’ Retirement System (ERS) with 659,750 members; and
  • The Police and Fire Retirement System (PFRS) with 35,754 members.

During the State fiscal year that ended on March 31, NYSLRS provided pension benefits to nearly 515,000 retirees and beneficiaries. Altogether, that’s more than 1.2 million participants, making NYSLRS one of the largest public retirement systems in the nation.

A Look Inside NYSLRS

New York State Common Retirement Fund

NYSLRS benefits are provided by the New York State Common Retirement Fund. State Comptroller Thomas P. DiNapoli is administrative head of NYSLRS and trustee of the Fund, which is widely recognized as one of the best-managed and best-funded public retirement funds in the nation. It’s also exceptionally enduring; 2021 marked the 100-year anniversary of the Retirement System.

NYSLRS Members                                                          

But NYSLRS is more than just the pension fund. Here are some facts about NYSLRS members as of March 31:

  • 514,150 active members (that is, members still on the public payroll) work for 2,979 public employers statewide.
  • About 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 total active members are in ERS. PFRS accounts for 6 percent of total active membership.
  • Almost 60 percent of all members are in Tier 6.
  • In ERS, 58.8 percent of members are in Tier 6, while 36.7 percent are in Tiers 3 and 4.
  • In PFRS, 51.1 percent of members are in Tier 6, while 43.4 percent are in Tier 2.

NYSLRS Retirees and Beneficiaries

The average pension for an ERS retiree was $27,227 as of March 31, 2023; the average for a PFRS retiree was $60,592. But these pension payments don’t just benefit retirees and beneficiaries. About 78 percent of retirees and beneficiaries stay in New York State and generate billions of dollars in economic activity. Their spending supports local businesses, contributes to local taxes and creates jobs in our communities.

Learn More About NYSLRS

Detailed information about our members and retirees, the Fund and Fund investments can be found in the 2023 Annual Comprehensive Financial Report.

National Retirement Security Month

October is National Retirement Security Month, a time to learn more about the importance of saving and your potential sources of income in retirement. Even if your own retirement seems far off in the future, it’s never too early to start developing your plans for retirement.

Retirement Security

NYSLRS and Retirement Security

Check out these blog posts to learn more about how your NYSLRS pension and other sources of retirement income can provide retirement security.

  • What is a Defined Benefit Plan?
    Your NYSLRS pension is a defined benefit retirement plan. When you retire, you’ll receive a guaranteed lifetime benefit based on your earnings and years of service. It will be calculated using a preset formula rather than being limited to your accumulated contributions and your investment returns, as it would be in a 401(k)-style plan.  
  • The 3-Legged Stool: An Approach to Retirement Confidence
    Think of your retirement security as a three-legged stool — each leg represents a different income source that supports you in retirement. The first leg of the stool is your NYSLRS pension, and the second leg is your Social Security benefit. The third leg is your own personal savings, which can give you more flexibility during retirement, helping to ensure that you’ll be able to do the things you want to do.
  • Compounding: A Great Way for Your Money to Grow
    The sooner you can start saving, the better — especially if you have a retirement savings account with compounding interest. When your money is compounded, it increases in value by earning interest on both the principal and accumulated interest. But for your money to make more money, it needs time to grow.
  • Deferred Compensation: Another Source of Retirement Income
    Deferred compensation plans are voluntary retirement savings plans. Your contributions will be automatically deducted from your paycheck, and you can contribute as little as 1 percent of your earnings. It’s a savings vehicle to consider if you want to start saving extra for retirement but aren’t sure where to start.
  • Give Your Retirement Savings a Boost
    Once you’re on your way and saving for retirement, you may want to look at ways to increase how much you save. Even the smallest increase can make a big difference over time, while having a minimal impact on your take-home pay.

Remember, retirement security doesn’t just happen — it takes planning. Visit our Retirement Planning page for more information about your NYSLRS pension, including an overview of how it’s calculated, estimating your amount and how to find a description of the benefits provided by your specific retirement plan.

Where Are Your Important Documents?

We accumulate a lot of important documents over a lifetime — things such as birth certificates, diplomas, deeds, wills, insurance policies and more. If you’re like many people, you may have papers stuffed in drawers, filing cabinets or boxes in the attic. If you need an important document, will you be able to find it? What’s more, when you pass away, will your loved ones be able to find what they need?
where are your important documents?

Organize Your Important Documents

Important documents should be kept in a secure but accessible place in your home. This includes personal documents, such as your passport, birth certificate, marriage certificate, will and burial instructions. You should also include information about your NYSLRS retirement benefits, income taxes, bank accounts, credit cards and online accounts. Important contact information, such as the names and phone numbers of your attorney, accountant, stockbroker, financial planner, insurance agent and executor of your will should also kept in a secure location.

Our fillable form, Where My Assets Are, can help make organizing your important documents a little easier. It will help you or your loved ones locate these documents when they are needed. It’s a good idea to review and update this information regularly.

Be aware that a safe deposit box may be sealed when you die. Don’t keep burial instructions, power of attorney or your will in a safe deposit box, because these items may not be available until a probate judge orders the box to be opened. However, a joint lessee of the box, or someone authorized by you, would be permitted to open the box to examine and copy your burial instructions.

Review Death Benefits and Beneficiary Designations

Depending on your tier and retirement plan, your beneficiaries may be eligible to receive a death benefit. Visit our member and retiree death benefit pages for more information.

Then, sign in to your Retirement Online account to review your named beneficiaries and update their contact information if needed. From your Account Homepage, click “View and Update My Beneficiaries” to get started.

Please note, when a NYSLRS member or retiree dies, it is important that survivors report the death to NYSLRS as soon as possible. Before any death benefits can be processed or paid, NYSLRS will need an original, certified death certificate.

Crunching the Numbers: A Short Guide to Retirement Calculators

A good estimate of your post-retirement income is essential for effective retirement planning. But gauging your income can be tricky when it comes from multiple sources. Fortunately, there are a variety of online calculators that can help you get started.

online calculators for retirement planning

NYSLRS Benefit Calculator

Most NYSLRS members can quickly create a pension estimate using Retirement Online. Your estimate will be based on the most up-to-date account information we have on file for you. You can enter different retirement dates to see how those choices would affect your benefit and adjust your earnings or service credit if you anticipate a raise or plan to purchase past service.

Social Security Calculators

The Social Security Administration (SSA) hosts several calculators that you may find helpful. Their Quick Calculator uses information you enter to provide a rough Social Security benefit estimate. Their Retirement Estimator calculates your benefit based on your actual earnings. You’ll need to enter your Social Security number and other personal information to create an SSA account. 

You can also look up when you will be eligible for full Social Security benefits and estimate your life expectancy.

Savings Calculators

If you are saving for retirement, a simple savings calculator can give you an idea of how your money can grow over the years. However, simple calculators like this assume a fixed amount of savings each month. Most people increase their retirement savings as their income grows.

If you have a 457(b) plan like those offered by the New York State Deferred Compensation Plan, you can use their interactive retirement planner to project a hypothetical view of what your retirement may look like based on information you provide

Savings Withdrawal Calculators

Savings withdrawal calculators are designed to help determine how much savings remains after a series of withdrawals. These are especially helpful tools to use when trying to determine how long your retirement savings will last, based on a starting amount, how much you expect to withdraw, how often and some other factors.

How Much Do You Need?

Now that you’ve estimated your potential sources of retirement income, it’s important to understand your anticipated expenses in retirement. Our Income and Expenses Worksheet can help you create a post-retirement budget.

Think of retirement security as a three-legged stool, with your NYSLRS pension, social security benefit and retirement savings working together to provide financial stability. Your NYSLRS pension is a defined benefit, or traditional pension, that will provide you with a monthly payment for the rest of your life. Having a retirement savings account can give you more flexibility to do the things you want to do, or provide a source of cash in case of an emergency. Start saving for retirement if you haven’t already, or give your retirement savings a boost.

Know Your Benefits: What If I Leave Public Employment

It may not come up during your career, but if you leave public employment before you are eligible to retire, you should know what happens with your NYSLRS membership and benefits. Your options will depend on how many years of service you have. It’s also important to keep your account information up to date. If you remain a member of NYSLRS after you leave public employment, you can regularly review your account information and keep it up to date by using Retirement Online.

What Should I Do if I Leave Public Employment

Find Out If You Are Vested

NYSLRS members are vested when they have five years of service credit. Sign in to your Retirement Online account to see your total estimated service credit.

  • If you have 5 or more years of service when you leave public employment, and you leave public employment before you are eligible to retire, you can receive a vested retirement benefit when you become eligible.
  • If you leave with between five and ten years of service, you can either remain a member and receive a vested retirement benefit when you become eligible or terminate your membership and receive a refund of your contributions.
  • If you leave with more than ten years of service, you cannot withdraw your NYSLRS membership and you can receive a vested retirement benefit when you become eligible and apply.
  • If you leave with less than ten years of service, you can end your membership and receive a refund of your contributions.

Keep Your Contact Information Updated

It’s important to make sure we have your current mailing address, phone number and personal email address, and let us know about any future changes. That way, you won’t miss important information from us, such as your Member Annual Statement.

To update your contact information, sign in to Retirement Online. Go to ‘My Profile Information,’ find your address, phone number or email address under ‘My Profile Information’ and click “update.”

Keep Your Beneficiaries Updated

If you leave public employment, your beneficiaries may still be eligible for a death benefit, so you should review your beneficiary designations periodically. Sign in to Retirement Online, go to the ‘My Account Summary’ area of your Account Homepage and click “View and Update My Beneficiaries.” Your beneficiary changes will be considered filed on the day you submit them.

Repay Any NYSLRS Loans

If you leave public employment, you will no longer be able to pay off your NYSLRS loans by payroll deduction. If you have any outstanding NYSLRS loans, you must make payments directly to NYSLRS at least once every three months and repay your loan within five years of when it was issued, or you will default on the loan. Defaulting on a loan may carry considerable tax consequences: You’ll need to pay ordinary income tax and possibly an additional 10 percent penalty on the taxable portion of the loan. You can make loan payments to NYSLRS via Retirement Online.

You aren’t eligible to take a new NYSLRS loan once you are off the public payroll.

Receiving a Vested Retirement Benefit

If you are vested, once you reach retirement age, you can receive a lifetime pension based on your salary and service from when you were working in public employment. It’s your responsibility to apply for retirement — NYSLRS will not pay out your pension benefit unless you apply for it.

The earliest date you can receive your retirement benefit depends on your tier and retirement system.

  • Tier 1 and 2 members are eligible for a vested retirement benefit as early as the first of the month following your 55th birthday.
  • Tier 3, 4 and 5 members and Employees’ Retirement System (ERS) Tier 6 members are eligible for a vested retirement benefit as early as your 55th birthday.
  • Police and Fire Retirement System (PFRS) Tier 6 members are eligible for a vested retirement benefit on your 63rd birthday.

For most members, however, if you retire before your full retirement age, you would face a permanent early retirement benefit reduction. The full retirement age is 62 for Tier 1 – 5 members, and age 63 for ERS Tier 6 members and off-payroll PFRS Tier 6 members.

Most members can estimate your pension amount using the benefit calculator in Retirement Online. Sign in to your Retirement Online account, go to the ‘My Account Summary’ area of your Account Homepage and click the “Estimate my Pension Benefit” button. You can also apply for your retirement benefit using Retirement Online.

If You Leave Public Employment with Less than Ten Years of Service

With less than ten years of service credit, you can choose to end your membership and request a refund of your contributions. If you withdraw your contributions, however, you will no longer be eligible to receive a pension benefit. You can withdraw by signing in to Retirement Online, going to the ‘My Account Summary’ area of your Account Homepage, and clicking “Withdraw My Membership.”  

You cannot withdraw from NYSLRS once you have ten years of service credit.

(Note: Tier 1 and 2 members and PFRS Tier 3 (Article 11) members covered by a non-contributory retirement plan can make voluntary contributions. These members can withdraw their voluntary contributions without ending their membership. Contact us if you have questions.)

If you have less than five years of service credit (aren’t vested) and don’t withdraw your contributions, they will continue to earn 5 percent interest for seven years. After seven years off the public payroll, your membership ends automatically, and your contributions will be deposited into a non-interest-bearing account until you withdraw them.

For more information, including tax implications of withdrawing your membership, read Life Changes: What If I Leave Public Employment?.

Debt and Retirement

If you’re planning to retire soon, it’s a good idea to take inventory of any debt you owe. Paying down your debt can give you flexibility to enjoy the type of retirement you want.

NYSLRS Loan Debt

If you have an outstanding NYSLRS loan balance when you retire, it will reduce your pension. The amount of your reduction is based on:

  • Your retirement system — Employees’ Retirement System (ERS) or Police and Fire Retirement System (PFRS);
  • Your tier;
  • Your age at retirement; and
  • Whether you retire with a service retirement benefit or a disability retirement benefit.
Debt and Retirement - How a NYLSRS Loan Balance Could Affect Your Pension

The pension reduction does not go toward repaying the outstanding loan balance — it’s a permanent reduction. And, at least part of the loan balance at retirement will be subject to federal income taxes.

When you apply to retire using Retirement Online and have an outstanding NYSLRS loan balance, the pension reduction amounts are provided to you. They are also listed on the loan applications on our Forms page. If you are nearing retirement, be sure to check your loan balance. If you are not on track to repay your loan before you retire, you can increase your loan payments, make additional lump sum payments or both (see the Change Your Payroll Deductions or Make Lump Sum Payments section of our Loans page.)

Although ERS members may repay their loan after retiring, they would have to pay the full balance that was due at retirement in a single lump sum payment. Then, going forward, the pension would be increased to the amount it would have been without the loan reduction. However, it would not be increased retroactively back to the date of retirement.

Other Debt to Check

Credit Cards

Another priority is paying off credit cards. The average American household with credit card debt carries a month-to-month balance of $7,876 and pays $1,380 a year in interest, according to a recent analysis of federal data.

Credit card statements carry a minimum payment warning that tells you how long it will take, and how much it will cost, to pay off your balance making only minimum payments.

If you have more than one credit card balance, many financial advisors recommend you pay as much as you can on the card with the highest interest, while making at least the minimum payments on lower-interest cards. Once you’ve paid off the high-interest card, focus on the one with the next-highest rate, and so on. Other advisors say it might be better to pay off the card with the smallest balance first. The idea is to gain a sense of accomplishment, and make the process seem less daunting.

Mortgages

Mortgage balances make up 70 percent of the $17.06 trillion in U.S. household debt. Should you try to pay off your mortgage before you retire? Advice varies on that question. It would eliminate a major expenditure and let you spend your retirement income on other things. On the other hand, if your mortgage interest rate is relatively low, you may want to focus on paying off other high-interest debt or boosting your retirement savings. What works best for you will depend on your situation.