Tier 3 & 4 Members: When Is The Right Time To Retire?

Tier 3 and 4 members 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 guaranteed, the size of that benefit can vary.

Three Reasons to Keep Working

  1. Age 55 is the earliest that Tier 3 and 4 members can claim their benefits. However, unless you have 30 years of service, a significant penalty for such an early retirement is imposed — a 27-percent reduction. The longer you wait to retire, the greater your benefit will be. At age 62, you can retire with your full benefits.
  2. Your final average salary (FAS) is a significant factor in the calculation of your pension benefit. Since working longer usually means a higher FAS, continued public employment can increase your pension.
  3. The other part of your retirement calculation is your service credit. More service credit obviously earns you a larger pension benefit, but 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 FAS × 1.66% × years of service; between 20 and 30 years, the formula becomes FAS × 2.00% × years of service.

When is the Right Time to Retire?

If You’re Not Working, Here’s Something to Consider

Everyone’s situation is unique. For example, if you’re vested, you no longer work for a public employer and you don’t think you will again, retiring 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.

Tools To Help Make Your Decision

Here are two ways to decide what makes sense for you:

  1. Our online retirement benefit calculator allows most members to estimate their benefit with different retirement dates, FAS and service credit totals. By changing each variable, you can see the impact it may have on your benefit.
  2. If you’re a Tier 3 or 4 member with five or more years of service credit, you can request an estimate based on your actual salary and service reported to date. If you’re age 50 or older, we can include additional, projected service credit based on a date of retirement up to five years in the future.

To request your estimate, contact our Call Center toll-free at 1-866-805-0990 or 518-474-7736 in the Albany, New York area. You can also send us a Request for Estimate (RS6030) form.

This post has focused on Tier 3 and 4 members. To see how early retirement affects members in other tiers, visit our About Benefit Reductions page.

31 thoughts on “Tier 3 & 4 Members: When Is The Right Time To Retire?

  1. GW

    and yet sometimes if the organization wants you to retire early they make it difficult to work longer and they do – do it and it’s not up to the employee Sad but true- saw it happen too many times

    Reply
  2. Tom

    I have 30 yrs of service credit and will be 54 yoa in June.
    Will I be penalized if I quite my job and start collecting my retirement next year when I turn 55?

    Reply
    1. NYSLRS

      If you leave public service, you may apply for a retirement benefit at age 55. However, certain benefits could be affected if you don’t retire directly from the public payroll.

      Unfortunately, the NYSLRS Social Media team doesn’t have access to members’ account information. To get the account-specific information you need, please email our customer service representatives using our secure email form (http://www.emailNYSLRS.com). One of our representatives will review your account and get back to you. Filling out the secure form allows us to safely contact you about your personal account information. Please allow five to seven business days for a response.

      In addition, you may want to speak with New York State Civil Service or your employer’s health insurance benefit administrator for information about your health insurance benefits. (Please note: NYSLRS does not administer health insurance benefits for its members or retirees). If you participate in the New York State Deferred Compensation plan, you may also wish to speak with one of their representatives.

      Reply
  3. Patti Tifft

    At age 55 I will have 35 yrs of service. I understand there will NOT be a penalty for retiring at this age, other people which have retired at ages 58 or 60 indicated they have been informed if they were to continue to work another year or two, they gain an additional $500 to $800 dollars more a year and have been told by the person advising them it isn’t worth the additional years working for that amount of money. Is this truly the case? The additional years only adds maybe $500? If so, then I feel retiring at 55 is the answer since I could find a part time job and make that amount of money and enjoy more down time.

    Reply
    1. NYSLRS

      Benefits and reductions vary significantly by tier and plan. We have two ways to help you compare your specific pension benefits at age 55 versus 58 or 60:

      1. Our online retirement benefit calculator allows most members to estimate their benefit with different retirement dates, salary and service credit totals. By changing each variable, you’ll be able to see the impact it may have on your benefit.
      2. If you are over 50 years old, you can email us using our secure contact form (http://www.emailNYSLRS.com) to request benefit projections based on your salary and service reported to date. Benefit projections can also be requested through our automated phone line by calling 1-866-805-0990. To hear the member menu, press 3, then 1 for the Employees’ Retirement System or 2 for the Police and Fire Retirement System, and then press 4 for the benefit projector.
      Reply
  4. D. C.

    According to #3 above, for Tier 3 and 4 members, “the formula for the first 20 years is FAS × 1.66% × years of service; between 20 and 30 years, the formula becomes FAS × 2.00% × years of service”. How to understand the “first 20 years” here? If an employee has 30 years of service, the formula is “(FAS x 1.66% x 20) + (FAS x 2% x10)” OR “FAS x 2% x 30”? Please clarify. Thanks.

    Reply
    1. NYSLRS

      In this case, if a member has less than 20 years of service, the formula is:
      FAS x 1.66% x total years of service.

      If a member has 20 to 30 years of service, the formula is:
      FAS x 2% x total years of service.

      If a member has 30 or more years of service, the formula is:
      FAS x 2% x 30 PLUS FAS x 1.5% X each year beyond 30 years.

      Reply
      1. R.T

        Hello. It the last sentence accurate? The Comptroller’s website says: •For each year of credited service beyond 30 years, you will receive 1.5 percent of your FAS.

        Example shown:
        35,000 × 2% × 30 years = $21,000 per year
        plus
        $35,000 × 1.5% × 1 year = $525 per year
        = $21,525 per year or
        $1,794 per month

        Reply
        1. NYSLRS Post author

          ERS Tier 3 and 4 members who have reached 30 years of service receive 1.5 percent of their final average salary (FAS) for each additional year of service. So a member with 31 years would receive a retirement benefit equal to 61.5 percent of their FAS.

          Reply
          1. JJT

            Hello,

            I had same question as previous commenter RT did when reading your April 5, 2017 comment: That comment says:

            “If a member has 30 or more years of service, the formula is:
            FAS x 2% x total years of service PLUS FAS x 1.5% X each year beyond 30 years.”

            But what I believe it should say is:

            “If a member has 30 or more years of service, the formula is:
            FAS x 2% x 30 YEARS of service PLUS FAS x 1.5% X each year beyond 30 years.”

            Your follow up comment on May 4th saying that someone with 31 years of service would have 61.5 percent of FAS does appear to be the correct info, but that is different than than the first info I quoted above.

  5. Sue

    If I leave State service before 55 when I do file on my 55th birthday will my dad still be based on leaving with 30 days vac?

    Reply
    1. NYSLRS

      Actually, a recent blog post tackles filing for retirement.

      If you are a Tier 3, 4, 5, or ERS Tier 6 member, you are eligible for a benefit on your 55th birthday. You can submit your retirement application 15 to 90 days before you turn 55. If you are off payroll and you submit your application on or after your 55th birthday, your application will be effective immediately upon filing with this office.

      Assuming you’re a Tier 3 or 4 ERS member, your lump-sum vacation payout will still count towards your final average salary (FAS), even if you go off state payroll, as long as your FAS is based on your last three years of service. Learn more in the ERS Tier 3 and 4 retirement plan book.

      For more detailed, account-specific information, please email our customer service representatives using our secure email form. One of our representatives will review your account to address your questions. Filling out the secure form allows us to safely contact you about your personal account information. Please allow five to seven business days for a response.

      Reply
    1. NYSLRS

      If you’re an ERS member, starting in 2008 would place you Tier 4. Tier 4 members only need five full-time years of service credit to earn a retirement benefit.

      However, there is also an age requirement: You must be at least 55 years old to qualify for a retirement benefit. And, to receive your full benefit, you must be 62 years old at retirement. If you retire before 62 with less than 30 years of service, you will receive a reduced benefit.

      For account-specific information, we recommend emailing our customer service representatives using our secure email form (see link below). One of our representatives will review your account to address your questions. Filling out the secure form allows us to safely contact you about your personal account information. Please allow five to seven business days for a response.

      http://www.emailNYSLRS.com

      Reply
    1. NYSLRS

      Pension benefits are paid on a monthly basis, at the end of every month. For example, we send out May’s payment at the end of May.

      If your benefit is paid by direct deposit, you will have access to it on the last business day of each month. If your benefit is paid by check, we will mail it on the second-to-last business day of each month.

      For specific pension payment dates, check out our Pension Payment Calendar page.

      Reply
    1. NYSLRS Post author

      That depends on your situation. If you are a Tier 3 or 4 member with 30 years of service, you can retire at 55 with no reduction to your benefits. But if you continue to work till 62, you will accrue additional service credit, which would increase your benefit.

      However, if you were to leave public service at 55, your benefit would not increase if you waited until 62 to apply for retirement.
      Our online retirement benefit calculator allows most members to estimate their benefit with different retirement dates, final average salaries and service credit totals. By changing each variable, you can see the impact it may have on your benefit.

      Reply
  6. Charles Rodenas

    Is there any chance of a State financial incentive and or County incentive to induce state and County workers to retire and reduce payroll? Word is the State is offering a buyout. Is this true?

    Reply
    1. NYSLRS Post author

      At this time, we’re not aware of any discussions about statewide retirement incentives. The New York State Legislature (not NYSLRS) occasionally enacts these retirement incentive programs, which are approved by both houses and signed into law by the Governor. The Retirement System administers programs that are signed into law. We’ll notify your employer if the Legislature makes a State incentive program available.

      Non-State employers (such as Counties) may choose to offer incentives to their employees, however, it’s important to note that these individual employer incentives will not affect a member’s NYSLRS pension benefits.

      Reply
  7. Todd Schall

    “the formula for the first 20 years is FAS × 1.66% × years of service; between 20 and 30 years”

    I understood that when you reach 20 years of service, all of your years are then calculated at 2.00%?

    Reply
    1. NYSLRS Post author

      You are right. When you reach 20 years of service, the first 20 years of service are calculated at 2 percent instead of 1.66 percent. We apologize for the confusion, and we have updated the blog to make that clear. Thank you.

      Reply
  8. Cheryl Darrow

    I will be 59 on October 5th and will have 30 years of service in September. Will I qualify for my full benefit at that time? I would love to retire at the end of October. Which day would be best to go? Thank you!

    Reply
    1. NYSLRS Post author

      If you are an ERS member in Tier 3 or 4 and over age 55, you will be eligible for your full retirement benefit once you reach 30 years of service.

      Which day you retire is up to you, but if you are thinking of retiring this year, you may want to contact our Customer Service Representatives to request a benefit projection or discuss your options.

      To get the account-specific information you need, please email our customer service representatives using our secure email form (http://www.emailNYSLRS.com), and one of our representatives will review your account and respond to your questions. Filling out the secure form allows us to safely contact you about your personal account information.

      Reply
  9. Russ Zocco

    this is very confusing to me. I am a Tier 4 member. It is my understanding that as a Tier 4 you can retire at age 55 with 30 years of service and receive 60% of your final highest average salary. Why is it being explained that full retirement is at age 62? That is simply not accurate. Please explain. Thank you

    Reply
    1. NYSLRS Post author

      You are correct that Tier 4 members in the Employees Retirement System with 30 years of service credit can retire at age 55 without a benefit reduction. And, yes; with 30 years of service, your calculation would be 60 percent of your FAS.

      However, members retiring before age 62 without 30 years of service credit would see a significant reduction in their benefits as shown in the graphic.

      Reply
    1. NYSLRS Post author

      Generally, unless you retire under a disability retirement, earnings are unlimited for retirees if they are self-employed; work for a private employer; work for another state or its political subdivisions; or work for the federal government.

      For more information, we suggest reading our Life Changes: What If I Work After Retirement? publication.

      Reply
  10. Roseanne Nadrich

    This may sound like a strange question, but is there a MANDATORY age for retirement under Tier 4? My municipality is forcing us to retire upon our 65th birthday. Is there any law governing that limitation?

    Reply
    1. NYSLRS Post author

      Certain retirement plans may have a mandatory retirement age, but unfortunately, the NYSLRS Social Media Team does not have access to your account information to determine if they apply to you.

      To get the account specific information you need, we recommend emailing our customer service representatives using our secure email form. One of our representatives will review your account and respond to your questions. Filling out the secure form allows us to safely contact you about your personal account information.

      Reply

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