The New York State and Local Retirement System (NYSLRS) covers state and local government workers outside New York City, apart from teachers, who are in the separate New York State Teachers' Retirement System. It has six membership tiers based on when you joined, and the differences between them are large. A Tier 6 member who joined on or after April 1, 2012 works under much tighter terms than a Tier 1 member who joined before July 1, 1973.
The six tiers
For the Employees' Retirement System (ERS), the tiers are set by your date of membership:
- Tier 1: joined before July 1, 1973
- Tier 2: July 1, 1973 to July 26, 1976
- Tier 3: July 27, 1976 to August 31, 1983
- Tier 4: September 1, 1983 to December 31, 2009
- Tier 5: January 1, 2010 to March 31, 2012
- Tier 6: April 1, 2012 or later
Tiers 1 and 2 are mostly retirees now. Tiers 3 and 4 contribute 3% of pay until they have 10 years of membership or service. Tier 5 contributes 3% for its whole career. Tier 6 contributes 3% to 6% depending on pay. The normal retirement age is 62 for Tiers 4 and 5 and 63 for Tier 6, and no one in these tiers can retire before 55.
The benefit formula for Tiers 4, 5 and 6
The coordinated-plan formula in Retirement and Social Security Law section 604 pays 1/60 (about 1.67%) of final average salary per year if you have fewer than 20 years. Tiers 4 and 5 with 20 or more years get 2% a year up to 30 years, plus 1.5% for each year past 30. Tier 6 with 20 or more years gets 35% for the first 20 years, plus 2% for each year past 20.
A Tier 6 example: 28 years of service and a $75,000 final average salary. The first 20 years give 35%. The next 8 years add 16%. That's 51% of $75,000, or $38,250 a year ($3,187.50 a month) before any survivor option.
The 20-year mark is a real cliff. At 19 years, the same member gets 19 x 1/60 = 31.7% of final average salary. At 20 years, it's 35%. Check your service total carefully if you're near it.
Retiring early
Tier 6 members can retire from 55 with at least 5 years of service, but the benefit drops 6.5% for each year before 63 (RSSL 603(i)(3)). Retire at 58 and you lose about 32.5%. Tier 4 is cut 27% at 55 down to 6% at 61, and not at all if you have 30 or more years of service. Tier 5 is cut 38.33% at 55 down to 6.67% at 61, and most Tier 5 members are reduced even with 30 years.
Final average salary
Final average salary is the average of your highest three consecutive years for Tiers 4, 5 and 6. The 2024 change to RSSL 608 moved Tier 6 from five years to three. Any year that's more than 10% above the average of the two years before it is capped, so a late jump in overtime won't count in full. If you took unpaid leave or worked part time in a recent year, ask NYSLRS which years it's using.
Vesting and refunds
Every tier now vests after 5 years. A 2022 change cut the Tier 5 and Tier 6 requirement from 10 years. If you leave with less than 10 years of service, vested or not, you can withdraw your own contributions plus interest, which ends your membership. With 5 or more years you can instead leave the money in and draw a pension later. Once you have 10 years, withdrawal isn't allowed. The employer share stays with the system either way.
No lump sum at retirement
NYSLRS doesn't offer a lump sum in place of the pension. Most members get a monthly benefit for life, with optional forms that continue payments to a beneficiary. One exception: Police and Fire members in 20- or 25-year plans, and county sheriffs, deputies and correction officers whose county has opted in, can take a Partial Lump Sum of 5% to 25% at retirement in exchange for a permanently smaller monthly benefit.
ERS and PFRS
NYSLRS is really two systems under one administrator. The Employees' Retirement System covers most state and local government workers. The Police and Fire Retirement System covers police officers and firefighters, and most of its members are in special plans that let them retire after 20 or 25 years regardless of age. The tier formulas above are the ERS general rules. If you're in PFRS, ask NYSLRS for an estimate under your own plan.
Cost-of-living adjustments
New York's COLA under RSSL 78-a is 50% of the prior year's CPI-U increase, with a floor of 1% and a cap of 3%, applied to the first $18,000 of your annual benefit. You qualify at 62 after 5 years of retirement, at 55 after 10 years if you were in a plan that let you retire after 20 or 25 years regardless of age, or after 5 years on disability retirement. On an $18,000 or larger benefit, the increase is between $180 and $540 a year.
Benefit security
Article 5, Section 7 of the New York State Constitution makes pension system membership a contractual relationship whose benefits can't be diminished or impaired. That's why tier changes apply to new hires, not to people already in the system. Tier 5 in 2010 and Tier 6 in 2012 both worked that way.
Social Security
Most New York State and local government jobs are covered by Social Security, so most NYSLRS members will get both a pension and a Social Security benefit. The Windfall Elimination Provision only hit pensions from jobs that didn't pay Social Security tax, and the Social Security Fairness Act repealed it for benefits payable after December 2023. If you had a non-covered job for part of your career and your benefit looks unchanged, check your my Social Security account or call SSA.
State taxes
New York doesn't tax pensions from New York State and local government systems, including NYSLRS. Federal income tax applies as usual. If you move out of state, your new state's rules apply. Some states, including Illinois, Mississippi and Pennsylvania, exempt public pensions entirely, and nine states don't tax pension income at all.
Survivor options
At retirement you choose a payment option. The single life allowance pays the most and stops at your death. Joint allowance options pay less but continue all or half of your benefit to a beneficiary, and pop-up versions raise your payment back to the single life amount if your beneficiary dies first. NYSLRS also offers options that guarantee payments for a set period. Your benefit estimate shows the exact reduction for each one. Compare them with your spouse before you file.
Before you file
Ask NYSLRS for a benefit estimate a year or more before your target date and check the service credit and salary against your own pay stubs and W-2s. Employer reporting errors happen, especially around leaves, part-time periods and late salary corrections, and they take time to fix. If you're near the 20-year mark or a birthday that changes your reduction, ask for estimates at more than one date. NYSLRS can be reached at 866-805-0990 or through your account at nyslrs.ny.gov.
Use the Social Security calculator to pick a claiming age with your pension as the floor, and the pension income tax calculator to see your after-tax income.