Tag Archives: Vested

Common Retirement Myths—Part 1

The laws governing your NYSLRS retirement benefit can be confusing. Sometimes a small misunderstanding can have a big impact on your finances. So base your financial decisions on retirement facts, not common myths.

Retirement Myths vs Facts


myth

My NYSLRS pension is like a 401(k)-style retirement savings account and I will get my contributions back when I retire.

fact

Your NYSLRS pension is a defined benefit plan. Your pension will be a lifetime benefit based on your earnings and years of service—it will not be based on your contributions. Member contributions support the benefits earned by current and future retirees and are an important asset of the Common Retirement Fund.


myth

If I work for more than one NYSLRS participating employer, the service credit from both will count toward my pension benefit.

fact

It depends. You can only earn one year of service credit in a 12-month period. If you work part-time for two participating employers, you would receive credit toward retirement from both, up to the maximum of one year. However, if you already work full-time for one NYSLRS employer, plus you work part-time for another employer, your part-time job won’t increase your retirement service credit. Also, if you are a full-time employee of a school district, you won’t earn extra service credit if you work during the summer.


myth

NYSLRS administers health insurance coverage for its retirees.

fact

NYSLRS does not administer health insurance programs. We may deduct premiums from a retiree’s monthly pension benefit to pay for health insurance coverage if their former employer instructs us to do so, but we can’t answer questions about coverage or changes in premium amounts.

The New York State Department of Civil Service administers the New York State Health Insurance Program (NYSHIP) for New York State retirees and some municipal retirees. If you are still working, your employer’s Human Resources (Personnel) office should be able to answer your questions about post-retirement coverage.


myth

I can take out a NYSLRS loan after I retire.

fact

You need to actively work for New York State or a participating employer to take a NYSLRS loan. They are not available to retirees.


myth

If I’m vested and no longer working for a public employer, NYSLRS will automatically start paying my pension as soon as I’m eligible.

fact

Your pension is not automatic. You must apply for retirement 15 to 90 days before your retirement date. Your retirement date is up to you. In order to retire, a NYSLRS member must terminate employment and be removed from the payroll of their employer(s) before the effective date of retirement.

Most NYSLRS members can begin collecting their pension as early as age 55. If you retire between age 55 and your full retirement age (62 or 63, depending on your tier and plan), you may face a permanent benefit reduction. If you have left public employment though, your benefit won’t increase after you reach full retirement age so don’t delay filing for retirement beyond that point.


You can find more answers about your NYSLRS benefits in your retirement plan publication. If you have account-specific questions, please message our customer service representatives using our secure contact form.

Check out Common Retirement Myths—Part 2 where we debunk five other retirement myths.

ERS Tier 3 and 4 Milestones

When you join the Employees’ Retirement System (ERS), you are assigned a tier based on your date of membership. You are in:

  • Tier 3 if you joined July 27, 1976 through August 31, 1983.
  • Tier 4 if you joined September 1, 1983 through December 31, 2009.

Let’s look at the ERS Tier 3 and 4 milestones and how they affect your benefits.

Why Milestones Matter

As a NYSLRS member, you earn service credit for your paid public employment. Generally, one year of full-time work equals one year of service credit. As you earn service credit, you’ll reach career milestones that will make you eligible for certain benefits or for increases to your existing benefits. Understanding these milestones can help you plan for retirement.

Your ERS Tier 3 and 4 milestones and pension calculation depend on your retirement plan, so it is important to familiarize yourself with the details of your plan. Most ERS Tier 3 and 4 members are in the Article 15 retirement plan (named for a section of the New York State Retirement and Social Security Law). If you see Plan A15 listed in the ‘My Account Summary’ section of your Retirement Online account, you’re in this plan. For members not covered by the Article 15 retirement plan, visit our website to Find Your NYSLRS Retirement Plan Publication.

Important ERS Tier 3 and 4 Milestones

ERS Tier 3 and 4 member milestones

Here are some additional important milestones for Tier 3 and 4 members in the Article 15 retirement plan:

  • With ten years of service credit, you can apply for a non-job-related disability benefit if you are permanently disabled and cannot perform your duties because of a physical or mental condition.
  • With ten years of service credit, your beneficiaries may be eligible for an out-of-service death benefit if you leave public employment and die before retirement.
  • Ten years also marks the point when you are no longer able to withdraw your membership and receive a refund of your contributions if you leave public employment.
  • You are eligible to retire once you are age 55 and have five years of service credit. However, for most Tier 3 and 4 members, there would be reductions to your benefit if you retire before age 62 with less than 30 years of service credit.
  • You can retire with full benefits at age 62.
    • If you retire with less than 20 years of service, your pension will equal 1.66 percent of your final average earnings (FAE) for each year of service.
    • If you retire with 20 to 30 years of service, your pension will equal 2 percent of your FAE for each year of service.
    • For each year of service beyond 30 years, you will receive 1.5 percent of your FAE.

Note: When you retire, your FAE will be based on the average of your three highest consecutive years of earnings. The law limits the FAE of all members who joined on or after June 17, 1971. Read our blog post, Calculating Your Final Average Earnings, for more information, including how your FAE will be calculated and limitations.

Most members can estimate their pension in Retirement Online. You can fine tune your estimate by entering your annual earnings and expected pay increases. You can also include any service credit you plan to purchase.

ERS Tier 5 Milestones

If you joined the Employees’ Retirement System (ERS) on or after January 1, 2010, but before April 1, 2012, you are a Tier 5 member. Let’s look at the ERS Tier 5 milestones you will reach over the course of your public service career and how they will affect your benefits.

Why Milestones Matter

As a NYSLRS member, you earn service credit for your paid public employment. Generally, one year of full-time work equals one year of service credit. As you earn service credit, you’ll reach career milestones that will make you eligible for certain benefits or for increases to your existing benefits. Understanding these milestones will help you plan for retirement.

Your ERS Tier 5 milestones and pension calculation depend on your retirement plan, so it is important to familiarize yourself with the details of your plan. Most ERS Tier 5 members are in the Article 15 retirement plan (named for a section of the New York State Retirement and Social Security Law). If you see Plan A15 listed in the ‘My Account Summary’ section of your Retirement Online account, you’re in this plan. For members not covered by the Article 15 retirement plan, visit our website to Find Your NYSLRS Retirement Plan Publication.

Important ERS Tier 5 Milestones

ERS Tier 5 milestones

Here are some additional important milestones for Tier 5 members in the Article 15 retirement plan:

  • With ten years of service credit, you can apply for a non-job-related disability benefit if you are permanently disabled and cannot perform your duties because of a physical or mental condition.
  • With ten years of service credit, your beneficiaries may be eligible for an out-of-service death benefit if you leave public employment and die before retirement.
  • Ten years also marks the point when you are no longer able to withdraw your membership and receive a refund of your contributions if you leave public employment.
  • You are eligible to retire once you are age 55 and have at least five years of service credit. However, for most Tier 5 members, there would be reductions to your benefit if you retire before age 62.
  • You can retire with full benefits at age 62.
    • If you retire with less than 20 years of service, your pension will equal 1.66 percent of your final average earnings (FAE) for each year of service.
    • If you retire with 20 to 30 years of service, your pension will equal 2 percent of your FAE for each year of service.
    • For each year of service beyond 30 years, you will receive 1.5 percent of your FAE.

Note: When you retire, your FAE will be based on the average of your three highest consecutive years of earnings. The law limits the FAE of all members who joined on or after June 17, 1971. Read our blog post, Calculating Your Final Average Earnings, for more information, including how your FAE will be calculated and limitations.

Most members can estimate their pension in Retirement Online. You can fine tune your estimate by entering your annual earnings and expected pay increases. You can also include any service credit you plan to purchase.

ERS Tier 6 Milestones

If you joined the Employees’ Retirement System (ERS) on or after April 1, 2012, you are a Tier 6 member. Let’s look at the ERS Tier 6 milestones you will reach over the course of your public service career and how they will affect your benefits.

Why Milestones Matter

As a NYSLRS member, you earn service credit for your paid public employment. Generally, one year of full-time work equals one year of service credit. As you earn service credit, you’ll reach career milestones that will make you eligible for certain benefits or for increases to your existing benefits. Understanding these milestones will help you plan for retirement.

Your ERS Tier 6 milestones and pension calculation depend on your retirement plan, so it is important to familiarize yourself with the details of your plan. Most ERS Tier 6 members are in the Article 15 retirement plan (named for a section of the New York State Retirement and Social Security Law). If you see Plan A15 listed in the ‘My Account Summary’ section of your Retirement Online account, you’re in this plan. For members not covered by the Article 15 retirement plan, visit our website to Find Your NYSLRS Retirement Plan Publication.

Important ERS Tier 6 Milestones

ERS Tier 6 milestones

Here are some additional important milestones for Tier 6 members in the Article 15 retirement plan:

  • With ten years of service credit, you can apply for a non-job-related disability benefit if you are permanently disabled and cannot perform your duties because of a physical or mental condition.
  • With ten years of service credit, your beneficiaries may be eligible for an out-of-service death benefit if you leave public employment and die before retirement.
  • Ten years also marks the point when you are no longer able to withdraw your membership and receive a refund of your contributions if you leave public employment.
  • You are eligible to retire once you are age 55 and have at least five years of service credit. However, for most Tier 6 members, there would be reductions to your benefit if you retire before age 63.
  • You can retire with full benefits at age 63.
    • If you retire with less than 20 years of service, your pension will equal 1.66 percent of your final average earnings (FAE) for each year of service.
    • If you retire with 20 years of service, your pension will equal 1.75 percent of your FAE for each year of service.
    • For each year of service beyond 20 years, you will receive 2 percent of your FAE.

Note: A new law improves your pension benefits. When you retire, your final average earnings (FAE) will be based on the average of your three highest consecutive years of earnings, the same as members in other tiers. Read our blog post, Calculating Your Final Average Earnings, for more information, including how your FAE will be calculated and limitations.

Most members can estimate their pension in Retirement Online. You can fine tune your estimate by entering your annual earnings and expected pay increases. You can also include any service credit you plan to purchase.

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.

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?.

NYSLRS – One Tier at a Time: ERS Tiers 3 and 4

(We know that’s two, but let us explain.) When you join the New York State and Local Retirement System (NYSLRS), you’re assigned a tier based on your date of membership. There are six tiers in the Employees’ Retirement System (ERS) and five in the Police and Fire Retirement System (PFRS). Your tier determines such things as your eligibility for benefits, the calculation of those benefits, death benefit coverage and whether you need to contribute toward your benefits.

Our series, NYSLRS – One Tier at a Time, walks through each tier and gives you a quick look at the benefits in both ERS and PFRS. Today’s post looks at ERS Tiers 3 and 4. Of our current 650,251 ERS members, 263,561 are in Tiers 3 and 4, representing 40.5 percent of ERS membership.

Most ERS Tier 3 and Tier 4 members (unless they are in special retirement plans) retire under the Article 15 retirement plan. Check out the graphic below for the basic retirement information for Tiers 3 and 4 members in this plan.

ERS Tiers 3 and 4 - Article 15

Membership Milestones for ERS Tiers 3 and 4

ERS members in Tiers 3 or 4 need five years of service credit to become vested. Once vested, they’re eligible for a lifetime pension benefit as early as age 55. However, if they retire before the full retirement age of 62 with fewer than 30 years of service credit, their benefit will be reduced. Some Tier 3 and 4 members, such as sheriffs or correction officers, can retire with 20 or 25 years of service, regardless of age and without penalty.

You can check your service credit total and estimate your pension using Retirement Online. Most members can use our online pension calculator to create an estimate based on the salary and service information NYSLRS has on file for them. You can enter different retirement dates to see how your choices would affect your potential benefit.

For more information about Tier 3 and 4 membership, find your NYSLRS retirement plan publication. It’s a comprehensive description of the benefits provided by your specific plan.

Left Public Employment? Don’t Forget to File for Retirement

If you expect to leave public employment before retirement age, or if you’ve already left, take note of this important information about your NYSLRS pension.

Once you become a vested NYSLRS member, you’re eligible for a NYSLRS pension even if you leave public employment before retirement age. Vesting is automatic but receiving retirement benefits is not. You’ll need to apply for your pension. But when should you apply?

Filing for Retirement If You Have Left Public Employment

Most NYSLRS members can begin collecting their pension as early as age 55. If you file for your retirement benefit between age 55 and your full NYSLRS retirement age, you may face a permanent benefit reduction. Full retirement age for a NYSLRS pension is 62 or 63, depending on your plan and tier.

retirement age for full benefits if you left public employment

Waiting longer than your full retirement age, however, could cost you a lot of money.

If you aren’t working for a NYSLRS participating employer, your NYSLRS pension will not increase after your full retirement age. Pension benefits are not retroactive, and you will not be able to recover the monthly pension payments that you would have received if you retired at full retirement age.

How Social Security and NYSLRS Rules Differ

NYSLRS and Social Security are different systems with different milestones. You can collect Social Security retirement benefits as early as age 62. If you delay taking Social Security, your benefit amount will continue to increase 8 percent per year until you reach age 70 (for those born in 1943 or later).

But if you wait until you’re 70 to apply for your NYSLRS pension, you’ll miss out on years of NYSLRS benefit payments.

The information above applies only to members who leave public employment before their full retirement age.

(In most cases, if you are still working for a participating public employer in New York State, your pension amount will continue to increase, even if you work past your retirement age.)

Steps You Can Take

Your retirement may be years or even decades in the future. Here are a few steps you can take to help you keep track of your NYSLRS pension if you leave public employment:

  • Estimate your NYSLRS pension at different ages using the benefit calculator in Retirement Online.
  • Create a plan for retirement, taking into account the milestones above.
  • Review your plan periodically and update it as necessary.
  • Keep your contact information up to date using Retirement Online.
  • Contact NYSLRS if you have questions about your benefits.

NYSLRS – One Tier at a Time: PFRS Tier 5

When you join the New York State and Local Retirement System (NYSLRS), you’re assigned a tier based on the date of your membership. There are six tiers in the Employees’ Retirement System (ERS) and five in the Police and Fire Retirement System (PFRS). Each tier has a different benefit structure established by New York State legislation.

Our series, NYSLRS — One Tier at a Time, walks through each tier to give you a quick look at the benefits in both ERS and PFRS. Today’s post looks at PFRS Tier 5. Anyone who joined PFRS from January 9, 2010 through March 31, 2012 is in Tier 5. There were 1,967 PFRS Tier 5 members as of March 31, 2021, making up 5.6 percent of PFRS membership.

About Special Plans

Under a regular plan, you need to reach certain age and service requirements to receive your NYSLRS pension. If you’re covered by a special plan, there is no age requirement, and you can receive your pension after completing 20 or 25 years of service.

Nearly 80 percent of PFRS members are in plans covered under Sections 384, 384-d, 384-e or 384-f of the Retirement and Social Security Law. Read our Police and Fire Retirement System blog post for information about different PFRS plans.

Check out the graphic below for the basic retirement information for PFRS Tier 5.

PFRS Tier 5

If you’re a PFRS Tier 5 member, you can find detailed information about your benefits in the retirement plan booklets listed below:

For special plans under miscellaneous titles, please visit our Publications page.

Check out other posts in the PFRS series: