This COLA is a permanent annual increase to your retirement benefit. It is based on the cost-of-living index and is designed to address inflation.
How Cost-of-Living Adjustment is Determined
COLA payments are based on the rate of inflation, as reflected in the consumer price index published by the U.S. Bureau of Labor Statistics. The law requires that COLA payments be calculated based on 50 percent of the annual rate of inflation, measured at the end of the fiscal year (on March 31st). In addition, the COLA cannot be less than 1 percent or greater than 3 percent of your benefit.
The COLA adjustment is applied to the first $18,000 of your benefit calculated as a Single Life Allowance, even if you selected a different pension payment option. Once your COLA payments begin, you will automatically receive an increase to your monthly benefit each September.
The September 2021 COLA equals 1.4 percent, for a maximum annual increase of $252.00, or $21.00 per month before taxes.
When Will You See the Increase?
Eligible retirees will see the first 2021 COLA payment in their September pension payment. It will be available to those with direct deposit on September 30, 2021. If you receive a paper check, the COLA will be included in the check mailed on September 29, 2021.
You can sign in to your Retirement Online account to view a current breakdown of your pension payment. If you have direct deposit and are eligible for a COLA increase, you will receive notification of the net change in your monthly payment amount in September.
If you are not eligible for a COLA yet, you will receive your first increase in the month after you become eligible. This payment will include a prorated amount to cover the month you became eligible. After that, you will receive a COLA increase each September.
Under normal circumstances, NYSLRS won’t release your benefit information – even to close family members – without your permission. However, if we have an approved copy of your power of attorney (POA) form on record, we can discuss your information with the person you named as your agent in your POA.
For example, your agent could ask for details about your pension payments, get help completing a loan application or call us for clarification if you don’t understand a letter you received.
Your agent could be your spouse, another family member or a trusted friend. You may designate more than one person as your agent, and you may authorize those agents to act together or separately. You may also designate “successor agents” to act on your behalf if the primary agent is unable or unwilling to serve.
A POA form may be filed with NYSLRS at any time, so there’s no need to wait until a “life event” happens to file. With a POA already on record, the designated agent can act immediately in case of emergency, hospitalization or unexpected illness.
What Can Agents Do?
The agent named in your POA is authorized to act on your behalf and conduct business with NYSLRS for you.
Agents can file applications and forms, such as service or disability retirement applications. They can get account-specific benefit information, request copies of retirement documents, update addresses and phone numbers, and take out loans. For retirees, agents can change the amount withheld from your pension for taxes.
If you use the NYSLRS POA form, and your agent or successor agent is your spouse, domestic partner, parent or child, they have “self-gifting authority.” That means they can designate themselves as a beneficiary of your pension benefits or, if you are not yet retired, choose a retirement payment option that provides for a beneficiary after your death and designate themselves as a beneficiary for that benefit.
If your agent or successor agent is not your spouse, domestic partner, parent or child, they do not automatically have self-gifting authority. If you want them to be able to designate themselves as beneficiaries, you should indicate that in the Modifications section of the POA. You should identify your agent by name and specify the authority you want granted to them.
It’s important to note that the NYSLRS POA form only covers Retirement System transactions. It does not authorize an agent to make health care decisions or changes to a Deferred Compensation plan.
Changes to the POA Law
The law governing POA requirements was changed effective June 13, 2021. Any POA executed since that date must comply with the new requirements (the NYSLRS form complies with the new requirements):
All POAs must be signed by two disinterested witnesses (witnesses who are not listed as an agent in the POA or named in the POA as a person who can receive gifts).
The use of a Statutory Gift Rider to grant gifting authority has been eliminated. If you do not use the NYSLRS POA form and instead submit a separately prepared Statutory POA form, gifting authority, even for a close family member, must be granted in the Modifications section of the POA. (See our Power of Attorney page for details.)
If you have an approved POA on file with NYSLRS, you do not need to send a new one. POAs executed before June 13, 2021, will be reviewed in accordance with the laws in effect at the time. POAs executed on or after June 13, 2021, that use an old POA form or do not comply with other requirements of the new law will not be valid.
You can also mail your POA (original or photocopy). You may wish to mail it certified mail, return-receipt requested, so you know when NYSLRS receives it. Mail it to:
NYSLRS 110 State Street Albany, NY 12244-0001.
Find Out More
A power of attorney is a powerful document. Once you appoint someone, that person may act on your behalf with or without your consent. We strongly urge you to consult an attorney before you execute this document.
You may revoke your POA at any time by sending us a signed, notarized statement.
We all look forward to a long, happy and financially secure retirement. But as you plan ahead for retirement, “how long?” is an important question to ask.
Longer Life Span, Longer Retirement
People are living longer. A 55-year-old man can expect to live for another 27 years, to about 82. A 55-year-old woman can expect to live for another 30 ½ years. These figures, derived from the Social Security life expectancy calculator, are only averages. They don’t take into account such factors as your health, lifestyle or family medical history.
Here are some other statistics that are worth pondering as you plan for retirement: more than 37,000 current NYSLRS retirees are over 85, and more than 3,400 have passed the 95 mark. In fact, in the State fiscal year that ended in March 2020, 375 NYSLRS’ retirees were 101 or older. Considering that many public employees retire at 55, it’s possible that a fair percentage of them could have retirements that last 45 years or more.
Making Your Savings Last
As you plan for a long retirement, you need to ask yourself, will I have enough money to maintain a comfortable lifestyle for decades to come?
Employees’ Retirement System (ERS) members who retired in fiscal year 2020 are receiving an average monthly pension of $2,656. The average Social Security benefit for a retired worker was $1,544, as of December 2020.
Your retirement savings are also crucial assets that can supplement your pension and Social Security. Savings are a hedge against inflation, can help in an emergency and provide flexibility over a long retirement.
If you have no retirement savings, it is never too late to start. An easy way to get started is through the New York State Deferred Compensation Plan, a retirement savings program created for New York State employees and employees of participating public agencies. If you’re a municipal employee, ask your employer if you’re eligible for the Deferred Compensation Plan or another retirement savings plan. (The New York State Deferred Compensation Plan is not affiliated with NYSLRS.)
After you retire, you’ll need to manage your retirement savings wisely to ensure your money lasts. You may find this savings withdrawal calculator helpful.
NYSLRS is Here for You
Your NYSLRS pension is a lifetime benefit that will provide monthly payments throughout your retirement. Get a head start on your retirement planning by getting a pension estimate. Most members can get an estimate by using our online benefit calculator.
Planning on taking out a NYSLRS loan? Applying online offers speed and convenience.
NYSLRS loan eligibility is based on your tier, but generally, you’ll need to be on the payroll of a participating employer, have at least one year of service and have a certain amount of contributions in your account. Retirement Online will provide the eligibility information you need as you step through the application process. (Note: retirees are not eligible for NYSLRS loans.)
Retirement Online is the fastest way to apply for a NYSLRS loan. It’s also an easy way to check your current loan balance, the amount you are eligible to borrow and more.
Once you’ve signed in, scroll down to ‘My Account Summary.’ Under ‘I want to…’ click the green “Apply for a Loan” button and follow the prompts.
As you work your way through the online application, you’ll see:
How much you can borrow;
The minimum repayment amount;
The expected payoff date; and
How much you can borrow without tax implications.
A service charge of $45 will be deducted from your loan check when it is issued. The current interest rate is 5.8 percent. The interest rate will remain fixed for the term of your loan.
NYSLRS loans are exempt from New York State and local income taxes. But the Internal Revenue Service (IRS) may consider all or part of a NYSLRS loan taxable in some cases – for instance, if you borrow above certain limits. The Retirement Online loan application will show you the maximum amount you can borrow without tax implications.
If you already have a loan and you want to take another loan, you can either take multiple loans or refinance your existing loan. Taking a new loan (the multiple-loan option) minimizes your potential tax consequences. Your minimum payment will be higher, but you will pay off your loans faster than you would by refinancing. Refinancing adds the new loan amount to your existing balance and spreads the entire balance over a new five-year term. Your payment will be lower but your tax consequences may be significantly higher.
Repaying Your NYSLRS Loan
Loan payments will be deducted from your paycheck. You can choose the minimum payroll deduction, which would pay off your loan in five years, or you can pay more to pay off your loan sooner. The payment calculator in Retirement Online will provide your expected payoff date if you enter an amount higher than the minimum.
If you are having trouble making payments because of a furlough or authorized leave of absence, you can find important information in our blog post, Managing Your NYSLRS Loan Payment.
Retiring With an Outstanding NYSLRS Loan
If you retire with an outstanding loan, your pension will be reduced. You will also need to report at least a portion of the loan balance as ordinary income (subject to federal income tax) to the IRS. If you retire before age 59½, the IRS may charge an additional 10 percent penalty. 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.
Note: Employees’ Retirement System (ERS) members may repay their loan after retiring, but they must pay the full amount (that is, the amount that was due on their retirement date) in a single lump-sum payment.
For more information about NYSLRS loans, visit our Loans page. If you need help with the Retirement Online loan application, click “Help” at the top of your account page. Then click next to ‘Requesting a Loan’ and select the step-by-step guide that best fits your situation. Retirement Online is generally available from 7:00 am to 9:30 pm on Monday, Wednesday, Thursday and Friday; from 7:00 am to 6:00 pm on Tuesday; and from 6:00 am to 11:00 pm on Saturday and Sunday.
Tier 3 and 4 members in the Article 15 retirement plan qualify for retirement benefits after they’ve earned five years of credited service. Once you’re vested, you have a right to a NYSLRS retirement benefit — even if you leave public employment. Though your pension is guaranteed, the amount of your pension depends on several factors, including when you retire. Here is some information that can help you determine the right time to retire.
Three Reasons to Keep Working
Tier 3 and 4 members can claim their benefits as early as age 55, but they’ll face a significant penalty for early retirement – up to a 27 percent reduction in their pension. Early retirement reductions are prorated by month, so the penalty is reduced as you get closer to full retirement age. At 62, you can retire with full benefits. (Tier 3 and 4 Employees’ Retirement System (ERS) members who are in the Article 15 retirement plan and can retire between the ages of 55 and 62 without penalty once they have 30 years of service credit.)
Your final average earnings (FAE) are a significant factor in the calculation of your pension benefit. Since working longer usually means a higher FAE, continued public employment can increase your pension.
The other part of your retirement calculation is your service credit. More service credit can earn you a larger pension benefit, and, after 20 years, it also gets you a better pension formula. For Tier 3 and 4 members, if you retire with less than 20 years of service, the formula is FAE × 1.66% × years of service. Between 20 and 30 years, the formula becomes FAE × 2.00% × years of service. After 30 years of service, your pension benefit continues to increase at a rate of 1.5 percent of FAE for each year of service.
If You’re Not Working, Here’s Something to Consider
Everyone’s situation is unique. For example, if you’re vested and no longer work for a public employer, and you don’t think you will again, taking your pension at 55 might make sense. When you do the math, full benefits at age 62 will take 19 years to match the money you’d have received retiring at age 55 — even with the reduction.
An Online Tool to Help You Make Your Decision
Most members can use Retirement Online to estimate their pensions.
A Retirement Online estimate is based on the most up-to-date information we have on file for you. You can enter different retirement dates to see how those choices would affect your benefit, which could help you determine the right time to retire. When you’re done, you can print your pension estimate or save it for future reference.
If you are unable to use our online pension calculator, please contact us to request a pension estimate.
This post has focused on Tier 3 and 4 members. To see how retirement age affects members in other tiers, visit our About Benefit Reductions page.
Most NYSLRS members contribute a percentage of their earnings to help fund pension benefits. For Tier 6 members (those who joined NYSLRS on or after April 1, 2012), that percentage, or contribution rate, can vary from year to year.
When Tier 6 Contribution Rates are Determined
A Tier 6 member’s contribution rate is calculated annually. New rates become effective each year on April 1, the beginning of the State’s fiscal year. Once your rate is set for a fiscal year, it will not change for the rest of that fiscal year. However, depending on your earnings, it may change the following year.
How Your Tier 6 Contribution Rate is Calculated
As a Tier 6 member, your contribution rate is based on how much you earn. Changes in your earnings may result in changes to your rate. The minimum rate is 3 percent of your earnings, and the maximum is 6 percent.
During your first three years as a NYSLRS member, your contribution rate is based on an estimated annual wage we receive from your employer. After three years, the rate is based on what you actually earned two years earlier. If you are a Tier 6 member with three or more years of membership in NYSLRS, this video will help explain how your contribution rate is determined:
The amount you contribute to the Retirement System will not affect the amount of your pension. Your NYSLRS pension is a lifetime benefit based on your retirement plan, years of service and final average earnings. You can learn more about your pension by reading your plan booklet on our Publications page. For help finding the right plan book, read our blog post 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.
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.
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.
NYSLRS, which comprises the Employees’ Retirement System (ERS) and the Police and Fire Retirement System (PFRS), had 673,336 members as of March 31, 2020. Our members are State government, local government and school district employees from across New York, including 637,746 in ERS and 35,590 in PFRS. Seventy-nine percent of our members were active, which means they were on a public payroll as of March 31.
NYSLRS Membership Over Time
A decade ago, nearly 90 percent of NYSLRS members were in Tiers 3 and 4. Now, those tiers represent less than half of our membership, while Tier 6 members are on the verge of surpassing them. Tier 6, which includes members who joined NYSLRS since April 1, 2012, has 298,633 members, or 44.4 percent of total membership.
Here’s a look at our NYSLRS membership by tier, as of March 31:
Tier 1: NYSLRS’ oldest tier, whose members first joined the system before July 1, 1973 (July 31, 1973 for PFRS members), is dwindling. Tier 1 represented only 0.2 percent of our membership. There were only 1,552 Tier 1 ERS members and 24 Tier 1 PFRS members.
Tier 2: With 22,262 members, Tier 2 represented 3.3 percent of membership. Ninety-two percent of Tier 2 members were in PFRS.
Tiers 3 & 4: Tiers 3 and 4, which have similar retirement plans, had 311,213 members, 46.2 percent of the total membership. Tiers 3 and 4 are primarily ERS tiers. There is no Tier 4 in PFRS, and only 228 PFRS members were in Tier 3.
Tier 5: Tier 5 covers members who joined from January 1, 2010 through March 31, 2012. With 39,652 members, Tier 5 represented 5.9 percent of membership.
Tier 6: This tier covers members who joined since April 1, 2012. Its ranks grew by 15 percent during the last fiscal year.
But NYSLRS is more than just the pension fund. The system had 673,336 members as of March 31, including county workers, professional firefighters and State troopers. Here are some facts about our membership:
530,547 active members (that is, members still on a public payroll) work for 2,962 public employers statewide.
One-third of those active members work for New York State. The rest work for counties, cities, towns, villages, school districts and public authorities.
Nearly 94 percent of active members are in the Employees’ Retirement System (ERS). The Police and Fire Retirement System (PFRS) accounts for 6 percent of NYSLRS membership.
More than 44 percent of all members are in Tier 6. Fifty-eight percent of PFRS members are in Tier 2 and almost 49 percent of ERS members are in Tiers 3 and 4.
NYSLRS Retirees and Beneficiaries
The average pension for an ERS retiree was $25,105; the average for a PFRS retiree was $54,684. But these pension payments don’t just benefit the system’s retirees and beneficiaries. Because 79 percent of NYSLRS retirees and beneficiaries live in New York, $10.8 billion worth of benefits stayed in the State. And that money supported local businesses, paid local taxes and generated economic development statewide.
An Award-Winning Publication
Extensive information about NYSLRS members and retirees, the Fund, and Fund investments can be found in the 2020 Comprehensive Annual Financial Report (CAFR). NYSLRS once again received the Certificate of Achievement for Excellence in Financial Reporting for the 2019 CAFR. The Certificate of Achievement is a national award recognizing excellence in the preparation of state and local government financial reports. NYSLRS has won this award for the last 16 years.
NYSLRS is actually two retirement systems: The Employees’ Retirement System (ERS) and the Police and Fire Retirement System (PFRS).
PFRS, which provides retirement benefits for police officers and paid firefighters, is the smaller of the two systems, with about 35,000 members. Roughly a third of PFRS members work for cities, while 20 percent work for New York State. The remainder work for towns, counties and villages.
There are five tiers in PFRS, reflecting when the members joined the system: Tiers 1, 2, 3, 5 and 6 (there is no Tier 4). Tier 2, which includes PFRS members who joined the Retirement System from July 31, 1973 through June 30, 2009, is the largest tier, accounting for almost 60 percent of membership. If you joined PFRS on or after April 1, 2012, you are in Tier 6.
The vast majority of PFRS members (98 percent) are in special retirement plans that allow for retirement after 20 or 25 years of creditable service. If you are in one of these plans, once you have the full amount of required service, you can retire at any age.
Some PFRS members are in regular retirement plans, which require a member to reach a certain age before they are eligible for a pension.
As a PFRS member, you’ll pass a series of important milestones throughout your career. Knowing and understanding these milestones will help you better plan for your financial future.
Service credit is a key in determining your eligibility for a pension and other benefits, including the amount of those benefits.
Under most 20- and 25-year plans, not all public employment is creditable. Usually, police and firefighting service can be counted as special-plan service. You may also be able to use military service to help you reach 20 or 25 years. If you have questions about the service that can be used to calculate your pension, please check your retirement plan booklet or contact us.
PFRS Plan Booklets
You can find details about your NYSLRS benefits in your retirement plan booklet.
For the majority of PFRS members, that’s the Special 20- and 25-Year Plans booklet. This booklet is for PFRS Tier 2, 3, 5 and 6 members covered by Sections 384, 384-d and 384-e of the State Retirement and Social Security Law.