Tag Archives: The Fund

A Look Inside NYSLRS

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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.

Comptroller DiNapoli’s Fight Against Pension Fraud

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Since taking office in 2007, Comptroller Thomas P. DiNapoli has been committed to fighting public corruption and protecting the New York State and Local Retirement System from pension fraud.

fighting pension fraud

Teamwork

Comptroller DiNapoli, through his Division of Investigations, partners with federal, state, and local law enforcement at every level of government. The Division’s pension fraud investigations have resulted in dozens of arrests and convictions and the recovery of nearly $3 million dollars.

The Retirement System’s Pension Integrity Bureau (PIB) is responsible for recovering erroneously paid pension benefits. In many cases, this is due to the survivors’ failure to report the death of a retiree in a timely manner, but some cases involve schemes to conceal the retiree’s death to continue pocketing pension payments. When PIB comes across apparent criminal activity, it refers the case to the Division of Investigations.

Recent Cases

In June 2021, an Ontario County woman pleaded guilty to grand larceny for stealing $2,076 that was intended for a deceased friend. The woman and her friend, who was retired from the Tonawanda Public Works Department, had a joint bank account. After his death, the woman unlawfully withdrew his pension payment and $3,216 in Veterans Affairs benefits and closed the account.

That same month, an Orange County woman was arrested and charged with grand larceny for allegedly stealing her late mother’s pension payments. She attempted to hide her mother’s death from NYSLRS and more than $50,000 in pension payments were deposited into a joint account after her mother’s death. The woman allegedly used the money to pay bills and make personal purchases, including fast food, liquor, clothing, gas and entertainment.

Other Notable Cases

Some people have taken elaborate measures to keep the pension payments coming in. For example, there was the Queens man who left his father’s body in a morgue for more than a year while he siphoned off $7,542 in pension payments and $17,790 in Social Security from his father’s bank account.

In many instances, the pension fraud involves substantial amounts of money which can lead to serious penalties for those who get caught. A few years ago, a Florida woman was sentenced to 2-to-6 years in State prison after she was convicted of stealing more than $120,000 in pension payments after her uncle’s death. She sent false information to his bank indicating he was still alive, then used her power of attorney to withdraw pension payments for several years.

Then there was the man who impersonated his dead brother in order to collect more than $180,000 in pension benefits. The Retirement System learned of the brother’s death and stopped payments to a trust account the man controlled. The man phoned the NYSLRS Call Center pretending to be his deceased brother demanding his money and insisted he was alive. The ploy failed and he was sentenced to 6 months in jail and 5 years probation. He also signed a $180,140 judgment and had to repay NYSLRS.

Your Pension Fund is Secure

The Pension Fund, which provides the money for pension payments and was valued at an estimated $254.8 billion as of March 31, 2021, has long been recognized as one of the best-managed and best-funded public pension funds in the nation. The State Comptroller’s ongoing effort to combat pension fraud and abuse is just one more reason that the Fund remains safe and secure.

New Yorkers can report allegations of fraud involving taxpayer money by calling the toll-free Fraud Hotline at 1-888-672-4555.

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.

The Common Retirement Fund: 100 Years of Strength and Security

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In 1921, NYSLRS’ pension fund held several million dollars and provided benefits to just a few dozen State employees. Today, the Common Retirement Fund (Fund) provides more than a billion dollars per month to hundreds of thousands of retirees and beneficiaries.

The System’s founders showed foresight in establishing the framework for a sustainable retirement system capable of providing long-term pension security for its members and retirees. Today, one hundred years later, we are considered one of the strongest public pension funds in the country, thanks in large part to the stewardship of Comptroller DiNapoli, trustee of the Common Retirement Fund and administrator of NYSLRS for the past 14 years.

Comptroller DiNapoli’s diligent efforts to maintain the financial well-being of the Fund, the fact that NYSLRS’ participating employers contribute their share into the Fund, and New York’s constitutional requirement that lifetime pension benefits be guaranteed to all NYSLRS retirees — all these elements combine to ensure that NYSLRS retirees will enjoy secure benefits for generations to come.

Common Retirement Fund - A Snapshot of Growth

Investments

The Common Retirement Fund has been widely recognized as one the best-funded and best-managed public pension fund’s in the nation. (In June 2020, the Pew Charitable Trusts ranked NYSLRS as the second-best-funded public retirement system in the nation, based on 2018 data.) The cornerstone of the Fund’s reputation is its sound investment policies. At the direction of Comptroller DiNapoli, Fund managers use a long-term investment strategy designed to take advantage of growth opportunities during good economic times, while helping the Fund weather economic downturns.

The Comptroller seeks the input of a wide range of internal and external advisors, consultants and legal counsel who help to determine the best investment choices and allocation of assets for the Fund. These advisors provide independent advice and oversight of all investment decisions, serve as part of the chain of approval on all investment decisions before they reach the Comptroller for final approval and participate on advisory committees that meet periodically throughout the year.

Fund assets are invested in a diversified portfolio. About 55 percent of the assets are invested in publicly traded stocks. Other investments include bonds, mortgages, real estate and private equity.

The Fund is also strengthened by a forward-looking approach to addressing climate change-related investment risks and capitalizing on the opportunities created by the transition to a low-carbon economy. Comptroller DiNapoli recognizes that climate change poses an enormous threat to the global economy and to the Fund’s investment portfolio. Recently, he announced plans to transition the Fund’s portfolio to net zero greenhouse gas emissions by 2040. This process will include a review of investments in energy companies and, where consistent with his fiduciary responsibility to maintain the long-term financial health of the Fund for NYSLRS members, divestment of companies that don’t meet minimum standards. This policy will help ensure that the Fund adapts to a changing global economy and maintains its growth in coming decades.

The Common Retirement Fund’s Impact on New York Businesses

The Common Retirement Fund’s In-State Private Equity Program invests in new and expanding New York companies and makes capital available to qualifying small businesses. As of March 31, 2020, the Fund’s private equity portfolio included investments in over 330 New York businesses with a total value of $1.9 billion. These investments boost the State’s economy while at the same time generating significant returns for the Fund.

Looking Forward

As the Common Retirement Fund’s assets have grown over the years, so have its obligations. As of March 31, 2020, there were 487,407 NYSLRS retirees and beneficiaries, who were paid $13.4 billion in benefits over the previous year. That’s up from 67,689 retirees and beneficiaries, who were paid $194 million in benefits in 1971. Roughly a third of NYSLRS members are expected to retire over the coming decade.

Comptroller DiNapoli’s focus on continuing the Fund’s record of strong growth ensures that the Retirement System will be ready to meet the challenges of the future. The New York State Common Retirement Fund’s estimated overall investment return was 33.55 percent for the State fiscal year that ended March 31, 2021, reflecting the financial markets’ dramatic rebound from lows reached during the COVID-19 pandemic. The return on investments increased the Fund’s value to an estimated $254.8 billion. More than 1.1 million NYSLRS members, retirees and beneficiaries can continue to rely on the Retirement System for their retirement security.

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.