Tag Archives: police and fire retirement system

Overtime Limits for Tier 5 and 6 Members

Tier 5 and 6 members are subject to limits on the amount of overtime that can be included in their pension. You can earn overtime pay beyond the overtime limit, but it won’t be factored into your pension calculation. And you don’t pay member contributions on overtime pay that is above the limit.

Overtime Limits for Tier 5 and 6 Members

Tier 5 Overtime Limits

The overtime limit for Tier 5 Employees’ Retirement System (ERS) members increases each calendar year by 3 percent. In 2024, the limit for Tier 5 ERS members is $22,688.85.

For Tier 5 Police and Fire Retirement System (PFRS) members, the overtime limit is 15 percent of your regular earnings each calendar year.

For more information, visit our Overtime Limits for Tier 5 page.

Tier 6 Overtime Limits

The overtime limit for Tier 6 ERS members increases each calendar year based on the annual increase of the Consumer Price Index (CPI). In 2024, the limit for Tier 6 ERS members is $20,459.

For Tier 6 PFRS members, the overtime limit is 15 percent of your regular earnings each calendar year.

For more information, visit our Overtime and Earnings Limits for Tier 6 page.

Your Pension Benefit Calculation

Your NYSLRS pension will be based on your service credit and final average earnings (FAE). Your FAE is the average annual earnings you receive during the period when your earnings are highest (36 consecutive months for Tier 5 and 60 consecutive months for Tier 6). Your FAE will include overtime pay you earned up to each annual limit.

Your FAE may be limited in other ways. For example, for most members, if your earnings increase significantly in the years used for your FAE, some of those earnings might not count toward your pension. The specific limits depend on your tier. Visit our Final Average Earnings page for more information about this limit.

For Tier 6 members, the earnings that can be used toward your pension are also limited to the Governor’s salary.

Read Your Plan Publication

Your retirement plan publication provides specific information about the earnings that will be used to calculate your pension. Visit our website to Find Your NYSLRS Retirement Plan Publication.

Estimate Your Pension in Retirement Online

Most members can create their own pension estimate in minutes using Retirement Online. You can enter different retirement dates to see how those choices would affect your benefit. Sign in to Retirement Online and click the “Estimate my Pension Benefit” button to try it.

Applying for a NYSLRS Loan in Retirement Online

Planning on taking out a NYSLRS loan? Applying through Retirement Online is fast and convenient.

Eligibility for a NYSLRS loan is based on your tier. Generally, you’ll need to be on the payroll of a participating employer, have at least one year of service and have sufficient contributions in your account. (Note: Retirees are not eligible for NYSLRS loans.)

Applying for a NYSLRS Loan in Retirement Online

Retirement Online is the Fastest Way to Apply

When you use Retirement Online, NYSLRS receives your application immediately and can process your loan more quickly. It’s also an easy way to check the amount you are eligible to borrow, your balance on any outstanding loans, and more.

To apply:

As you work your way through the online application, you’ll see:

  • How much you are eligible to borrow;
  • The minimum repayment amount;
  • The expected payoff date; and
  • How much you can borrow without tax implications.

If you apply for a loan and you already have an existing loan (or loans), you’ll choose one of two options:

  1. Multiple loans: With multiple loans, you are taking a new loan, and each of your outstanding loans has a separate five-year due date and minimum payment. The minimum payments for each of your loans are added together for one total minimum payment. This combined minimum payment amount is higher than the minimum would be if you choose a refinanced loan, but with multiple loans, as each loan is paid off, your total minimum payment goes down.
  2. Refinance your existing loan: Refinancing your loan adds your new loan amount to your existing balance and consolidates the entire amount as one loan instead of taking separate loans. Minimum payment amounts for refinanced loans are lower than the minimum for multiple loans because when you refinance, we combine your existing loan balance with your new loan and spread out the repayment over a new five-year term. However, this increases the portion of your loan that may be considered a taxable distribution, and federal withholding can significantly reduce the loan amount that you receive.

There is a service charge of $45 that will be deducted from your loan check when it is issued. The current interest rate is 5 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 – 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.

When Will I Receive My Loan Check?

Loan checks are mailed out from NYSLRS once a week. To check the status of your loan application:

You will also receive a confirmation letter when your loan case has been completed. You can find it in your Retirement Online account under “View Documents.”

Repaying Your NYSLRS Loan

Loan payments are deducted from your paycheck. If you choose to repay the minimum amount, your payroll deduction may be increased periodically to ensure your loan will be repaid within the required five-year repayment term. You can increase your payroll deduction amount, make additional payments or pay your loan in full at any time with no prepayment penalties. Retirement Online is the easiest way to manage your loan payments. Sign in to your account and select “Manage my Loans.”

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 in Retirement Online.

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. Once you do, your pension benefit will increase from that point on, but it will not be adjusted retroactively back to your date of retirement.

Visit Our Website for More Information

For more information about NYSLRS loans, including what happens if you go off payroll or default on your loan, visit our Loans page. Need help with Retirement Online? See our Tools and Tips blog post.

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.

NYSLRS – One Tier at a Time: PFRS Tier 2

When you join the New York State and Local Retirement System (NYSLRS), you’re assigned a tier based on the date of your membership. This post looks at Tier 2 members of 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.

PFRS has five tiers. Almost half of PFRS members are in Tier 2, which began on July 31, 1973, and ended on June 30, 2009. Most are in special retirement plans that allow for retirement after 20 or 25 years, regardless of age, without penalty.

The special plans that cover most police officers and firefighters fall under Sections 384, 384(f), 384-d, and 384-e of Retirement and Social Security Law. You can sign in to Retirement Online to find your benefit plan, which is listed under ‘My Account Summary.’

PFRS Tier 2

Where to Find PFRS Tier 2 Information

Whether you’re in one of the retirement plans described in this post or another retirement plan, we encourage you to visit our website to find your NYSLRS retirement plan publication. It’s a comprehensive description of the benefits you’re entitled to receive as a PFRS member.

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.

Members may not be able to use the Retirement Online calculator in certain circumstances, for example, if they have recently transferred a membership to NYSLRS, if they are a Tier 6 member with between five and ten years of service, or if they have worked for multiple employers and were covered by different retirement plans. These members can contact us to request an estimate or use the “Quick Calculator” on our website. The Quick Calculator generates estimates based on information you provide.  

Add a NYSLRS Publication to Your Summer Reading List

Looking for some summer reading to add to your e-reader? Check out these publications from NYSLRS for important retirement information.

Add a NYSLRS Publication to Your Summer Reading List

1. Retirement Plan for ERS Tier 6 Members (Article 15)

Are you one of more than 350,000 Tier 6 Employees’ Retirement System (ERS) members covered by Article 15? Your retirement plan publication explains some of the benefits and the services available to you, including service retirement, disability retirement, death benefits and more. Read it now.

2. Retirement Plan for ERS Tier 3 and 4 Members (Articles 14 and 15)

If you’re not in Tier 6, you’re likely among more than 260,000 Tier 3 and 4 ERS members covered by Article 14 and 15. Check out your publication to find out about the benefits and the services available to you. Read it now.

3. Service Credit for Tiers 2 Through 6

The service credit you earn as a NYSLRS member is an important factor in the calculation of your pension. This publication explains the service you can earn credit for and how you can request to purchase credit for additional public employment or military service. Read it now.

4. What If I Leave Public Employment?

While we hope you stay a NYSLRS member throughout your working career, we understand that circumstances can change. If you leave public employment, this publication explains what you’ll need to do and what happens to your NYSLRS membership. Spoiler: It depends on how much service you have. Read it now.

5. What If I Work After Retirement?

Generally, NYSLRS retirees under age 65 can earn up to $35,000 per calendar year from public employers in New York State without affecting their NYSLRS pension. However, you should be aware of the laws governing post-retirement employment and how working after retirement may impact your retirement benefits. If you are considering working while collecting your pension, you should read this publication. If you already work in public employment as a NYSLRS retiree, read our Update Regarding Retiree Earnings Limit blog post for information about recent legislation and Governor’s executive orders that affect the limit.

Other Publications

Looking for other retirement plans? Maybe you’re a police officer, a firefighter, a sheriff or a correctional officer. You can find your retirement plan publication on our website. Visit our Publications page for more general information topics such as Life Changes: Why Should I Designate a Beneficiary?

Divorce and Your Pension

One aspect of retirement planning some members may not consider is how a divorce may affect their pension benefit. In New York State, retirement benefits earned by NYSLRS members are considered marital property. So, if you get a divorce, a judge may award your ex-spouse part of your pension. The process for dividing retirement assets after a divorce is complicated, but here is some basic information.

Dividing Pension Benefits After a Divorce

A commonly used formula for distributing pension benefits, established by the State Court of Appeals (the Majauskas formula), provides an ex-spouse with a portion of your pension based on half of the service credit you earned while you were married.

For example, let’s say you worked in your public-sector job for 10 years before you married. Then you got married continued working in public service for another 20 years, and then divorced. After the divorce, you continued working in public service for an additional 10 years. You’d have 40 total years of service credit, but only 20 years of your service was earned during your marriage. Under the Majauskas formula, your ex-spouse would be entitled to the proceeds of half of the service credit you earned during the marriage (10 years of service), or a quarter of your pension.

Other ways to divide pension benefits include a flat dollar amount, a benefit based on a specific date or a flat percentage of the benefit.

divorce and your pension

Domestic Relations Orders

To divide your retirement benefits after a divorce, NYSLRS needs a Domestic Relations Order (DRO). This court order, issued after a final judgment of divorce, gives us specific instructions on how your benefits should be split.

If your pension benefits will be affected by divorce, your DRO should be submitted to the Retirement System before you apply for retirement. We require a certified copy of the DRO, and it must be signed by a Supreme Court judge and entered as an official court document. We also require proof of divorce, such as a copy of the judgment of divorce. Failure to submit your DRO before you retire could result in a delay of your pension payments or an overpayment to you, which would need to be recovered by NYSLRS.

Learn More

Divorce may affect other NYSLRS benefits as well. Read Divorce and Your Benefits for more information including formulas for determining an ex-spouse’s share, a template you can use to draft a DRO and how to avoid a rejected DRO.

NYSLRS – One Tier at a Time: PFRS Tier 6

When you join the New York State and Local Retirement System (NYSLRS), you’re assigned a tier based on the date of your membership. This post looks at Tier 6 members of 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.

PFRS has five tiers. Anyone who joined PFRS on or after April 1, 2012 is in Tier 6. There are 16,027 Tier 6 members, which accounts for more than 45 percent of PFRS membership, making it the second largest PFRS tier.

About Regular Plans and Special Plans

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

Eighty percent of PFRS members are in plans covered under Sections 384, 384-d, 384-e or 384-f of the New York State 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 6 members.

PFRS Tier 6

Where to Find PFRS Tier 6 Information

For more information about PFRS Tier 6 membership, find your NYSLRS retirement plan publication. It’s a comprehensive description of the benefits provided by your specific plan.

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.

As of April 9, 2022, Tier 5 and 6 members only need five years of service credit to be vested. Tier 5 members with five or more years of service can estimate their pension benefit in Retirement Online. If you are a Tier 6 member with between five and ten years of service credit, you can contact us to request a benefit estimate.

Some Pension Payment Options Can Provide a Lifetime Benefit for a Loved One

When you apply for a NYSLRS pension, you’ll need to choose a payment option, which determines how your retirement benefit will be paid. All options will provide you with a monthly benefit for the rest of your life. The single life allowance option pays the highest monthly benefit, but all payments stop at your death. If you choose a different option, you may be able to provide a lifetime benefit to a beneficiary.

You can apply for service retirement through Retirement Online. One of the benefits of applying online is that you’ll see a projection of your pension payment under each option before you’re asked to select one. If you submit your retirement application by mail, you’ll need to mail a paper option election form.

payment options

Joint Allowance Payment Options

In exchange for a reduction in your monthly payment, joint allowance options pay your beneficiary all or part of your pension after you die. The amount of the reduction in your pension is based on your life expectancy and the life expectancy of your beneficiary. The reduction is permanent even if your beneficiary dies before you do.

You can only choose one beneficiary under a joint allowance option, and you can’t change your beneficiary after you retire, regardless of the circumstances. If your beneficiary dies before you, all payments will stop when you die.

Pop-Up Payment Options

Like joint allowance options, pop-up options allow you to provide a lifetime payment for a beneficiary after your death. But, if your beneficiary dies before you, your future monthly payments will increase to the amount you would have been receiving had you chosen the single life allowance at retirement. (The pop-up only affects future payments. You would not be entitled to any retroactive payments.)

The monthly reduction in your benefit will be greater if you choose a pop-up option over a regular joint allowance.

Payment Options for Multiple Beneficiaries

There are options that allow you to leave a monthly payment to more than one beneficiary, and options that leave a benefit for a certain amount of time. For more information, visit our Payment Option Descriptions page.

Consider Your Decision Carefully

There are many factors that might influence your payment option choice. Your age and overall health, the age and health of your partner, and your loved one’s access to other financial resources should all be considered.

You only have 30 days after the last day of your retirement month to change your option. After that date, you cannot change your option for any reason.

An important step in retirement planning is finding out how much you can expect to receive. Most members can use Retirement Online to create a pension estimate based on the salary and service information we have on file for them. You can enter different retirement dates and beneficiaries to see how they affect your potential benefit and pension payment options. Go to the ‘My Account Summary’ section of your Retirement Online Account Homepage and click the “Estimate my Pension Benefit” button. You can also ask NYSLRS to send you a benefit estimate that calculates your pension under the various options.

Other Death Benefits

Most NYSLRS retirees are eligible for a post-retirement death benefit if they retire directly from payroll or within one year of leaving covered employment. Eligibility depends on your retirement plan and tier. If you are eligible, your beneficiary will receive a one-time, lump sum payment. The amount of the post-retirement benefit is a percentage of the death benefit available during your working years. For information about this and other potential death benefits, please visit our Death Benefits for Retirees page.

A Good Plan Can Ease Your Transition to Retirement

When people talk about retirement planning, they’re usually talking about money. But there’s another aspect that people often forget: what will you do with all that newfound free time? After decades of hard work, the thought of sleeping late and taking it easy is pretty attractive. But the transition to retirement is a big deal, and many retirees don’t consider the psychological aspects of the change. We’ve gleaned some advice from professional sources.

A Good Plan Can Ease Your Transition to Retirement

Create a Plan and Schedule

However you feel about your job right now, it’s an important part of your life. It provides structure, mental stimulation and social interaction. Retiring can leave a void, and streaming the latest shows or making frequent trips to the grocery store may not be enough to fill it. Empty or aimless hours can lead to boredom, disenchantment and even depression.

You may have a long list of things to do, places to go, and hobbies to take up, but if you don’t decide where to begin, it can be hard to get started. You’ll need to actively plan your activities and create a schedule to successfully manage your time in retirement. Write down how you’d like to spend each day of the week, blocking out time for chores, social engagements, hobbies and exercise. Sticking to a schedule can keep your days structured and give you a sense of accomplishment.

Stay Engaged

For many people, staying busy and remaining socially engaged are essential to a satisfying transition to retirement. That’s one reason why some retirees take on part-time or seasonal jobs.

A job in retirement doesn’t necessarily mean continuing to do the same old thing. Retirement is an opportunity to reinvent yourself. Do something you’ve always wanted to do, something fun and challenging.

Maybe the job for you is one that doesn’t pay at all, at least monetarily. There are countless organizations looking for volunteers.

Volunteering just a few hours a week will give you something to look forward to and keep you connected to the outside world, which can improve both your mental and physical well-being.

Exercise Your Body and Brain

Regular exercise not only keeps you physically fit — it also increases your sense of well-being. Whatever you do to exercise, make it part of your regular schedule. Consider taking a fitness class at a local gym, which also adds a social element to your workout. Maybe you can up the ante by trying something new, like a martial arts class.

Don’t forget to exercise your brain. A course or workshop can help you discover a new side to yourself (the painter, the mystery writer, the master of topiary). You may even want to enroll in classes at a local community college or return to school full-time.

Whatever you do, make sure it’s part of a plan — a plan for a happier retirement.

Sex Identification and Your NYSLRS Membership

As of January 1, 2023, when new members are enrolled in NYSLRS, they can choose “x” as their sex identification instead of “male” or “female.”

sex identification

Updating Your Sex Identification With NYSLRS

If you’re already a member or a retiree, you can update your sex identification with us at any time.

Sign in to Retirement Online to check what information we have on file for you. You can find your current sex identifier on your Account Homepage under ‘My Profile Information.’

If you need to change or correct your sex identification, send us a signed letter requesting the change. Please include your NYSLRS ID on the letter. No additional documentation is required to change your sex identifier.

You can send us the letter by attaching it to our secure contact form, or by mailing it to:

NYSLRS
110 State Street
Albany, NY 12244-0001

We are working to update Retirement Online so members and retirees can sign in and update their sex identification on their own. This feature is expected to be available sometime in 2023. (Need help accessing Retirement Online in the meantime? See our Tools and Tips post for more information.)

Need a Name Change Too?

If you’re changing your last name, you can make the update, and upload copies of the documentation showing the change, in Retirement Online. Sign in to your account, go to the ‘My Profile Information’ section of your Account Homepage and click the “update” link next to your name. A list of acceptable documentation will be provided.

To update your first or last name, send us a Name Change Notice (RS5483) form. You will need to provide original documentation, such as a court order, if the name change is for a reason other than a change in marital status. We can also accept a certified copy of the documentation.