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Office of the New York State Comptroller’s Seal

NYS Comptroller

Thomas P. DiNapoli

Glossary of Retirement System Terms

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Active Member:
A member of the Retirement System who is either on the payroll of a participating employer, a vested member (having at least five years of credited member service) who is off a public payroll, or a non–vested member off a public payroll for less than seven years who has not withdrawn his/her contributions.
Advance Checks:
Partial pension payments sent to newly retired members starting approximately 30–60 days after their first monthly pension payment is due. Advance payments provide a monthly income while retirement benefit calculations are being finalized.
Amortization:
The repayment of a debt or loan in installments over a specific time period.
Annuity:
Payment made to Tier 1 and 2 retirees based on their contributions on deposit at retirement. The annuity is added to the retiree’s pension and is part of the retirement benefit.
Article 11:
The sections of law defining benefits payable to Tier 2 members.
Article 14:
The sections of law defining benefits payable to Tier 3 members.
Article 14-b:
The sections of law defining employer-elected benefits payable to certain Sheriffs, Undersheriffs and Deputy Sheriffs.
Article 15:
A section of the law defining benefits payable to Tier 3 and 4 members.
Article 19:
A section of the law providing better benefits to eligible Employees’ Retirement System members depending on their tier.
Tiers 1 & 2 eligible members
can receive an additional month of service credit for each year of credited service they have at retirement, up to a maximum of two years.
Tiers 3 & 4 eligible members
no longer have to make 3 percent salary contributions once they have been members for ten or more years or when they have ten or more years of service credit.
Article 20:
A section of law allowing eligible veterans who served in certain combat theaters, or during certain periods of wartime, to purchase and receive credit for up to three years of their military service. Visit our page, Military Service Credit page for more information.
Beneficiary(ies):
The person or persons designated to receive a death benefit and/or pension to be paid upon the death of a member or retiree. The beneficiary can be the same for both the death benefit and retirement option (chosen when a member retires), or the member may choose a different beneficiary for each. Visit our Beneficiary(ies) page for more information.
Primary Beneficiary:
The beneficiary(ies) that will receive any benefit payable upon the death of the member.
Contingent Beneficiary:
The beneficiary(ies) that will receive any benefit payable upon the death of the member if the primary beneficiary has predeceased the member.
Benefit Reduction:
Permanent reduction in a pension benefit. A benefit reduction applies to Tier 2, 3 and 4 Employees’ Retirement System (ERS) members and Tier 2 Police and Fire Retirement System (PFRS) members who retire before age 62. It does not apply to ERS Tier 2 and 4 members with 30 or more years of service credit, Tier 3 members with 30 or more years of service credit who retire under Article 15, and most ERS or PFRS members who retire under special plans.
Billing:
Participating employers are billed once a year by the Retirement System for their share of the annual cost of paying for future retirement benefits for their employees.
Contributions (Employer):
Paid by employers to cover costs incurred by their participation in the Retirement System.
Contributions (Member):
Paid by members to help fund their retirement benefits.
Required Contributions:
Contributions mandated by law (i.e., 3 percent contributions made by Tier 3 and 4 members or contributions made by Tier 1 and 2 members whose retirement plan requires them to contribute).
Voluntary Contributions:
Contributions not mandated by law. Members can withdraw these contributions without ending their Retirement System membership.
Coordinated Escalator (CO-ESC) Offset:
Reduction to a retirement benefit, beginning at age 62, for Tier 3 members who retire under Article 14. The reduction equals 50 percent of the primary Social Security benefit based on earnings from public employment in New York State.
Cost-of-Living Adjustment (COLA):
Annual increase in pension benefits to retirees who meet certain criteria. Visit our Cost-of-Living Adjustment (COLA) page for more information.
Days Worked:
Part of the information supplied to us by employers. It is used to determine service credit for employees. For detailed information on how to calculate days worked, see the Employer’s Guide Adobe pdf.
Death Benefit — Accidental:
Benefit payable to certain beneficiaries, as defined by law, of members who die as a result of an on-the-job accident not due to their own willful negligence. This can only be paid to a spouse, children under a certain age or dependent parents.
Death Benefit — Ordinary:
Benefit payable to named beneficiary(ies) of active members who die and have at least one year of credited service. Some members in special plans are covered after 90 days of service. Vested members with at least ten years of service, who die within one year after discontinuing service and are not otherwise gainfully employed, are entitled to have their beneficiary(ies) receive the full amount of the ordinary death benefit.
Death Benefit — Out of Service:
Vested members with at least ten years of credited service, who are otherwise gainfully employed at the time of death, or die after one year of discontinuing service, are entitled to have their beneficiary(ies) receive 50 percent of the ordinary death benefit.
Deficiency Contributions:
Required employer contributions to fund the cost of service before that employer participated in the Retirement System.
Direct Deposit Program:
A program available to retirees enabling them to have their monthly retirement benefit deposited directly into a checking or savings account of their choice. In most instances, the money is immediately available to pensioners. Visit our page on the Direct Deposit Program for more information.
Disability Retirement:
Retirement benefit available to members unable to perform their job duties because of permanent physical or mental incapacity. A member’s disability must be approved by a medical review board.
Ordinary Disability:
disability that is not the result of an on-the-job accident or incident.
Accidental Disability:
disability that is the direct result of an on-the-job accident not due to the employee’s own willful negligence.
Performance of Duty Disability:
Disability that is the result of an on-the-job injury that does not meet the qualification for an Accidental Disability.
Domestic Relations Order (DRO):
Document issued by a court for public retirement systems that provides specific direction on how to divide pension benefits between the parties of a divorce.
Effective Date of Retirement:
Date that a member’s retirement benefit begins.
Electronic Funds Transfer (EFT):
The direct deposit of a retiree’s monthly pension benefit to the bank and account of his/her choice. Visit our page on the Direct Deposit Program for more information.
Employer Resolution:
A formal document submitted to the Retirement System by an employer to become a participating employer. It can also be submitted when participating employers adopt retirement plans or other benefits such as the sick leave benefit (Section 41j or 341j). In addition, an employer resolution can establish a standard workday for elected and appointed officials for the purpose of determining days worked reportable to the Retirement System.
Equitable Distribution:
The fair division of marital assets, including pension benefits, between husband and wife after the marriage has ended.
ERS:
New York State and Local Employees’ Retirement System.
Estimate:
A calculation of approximate retirement benefits a member can expect under each of the various retirement options. A member must be within 18 months of retirement eligibility to request an estimate.
Filing Requirement:
A specific period of time or specified date required by law that someone must meet when filing for an application for benefits or enrolling in a special plan.
Filing of Documents:
Many documents (such as a retirement application or a Designation of Beneficiary form Adobe pdf) must be filed with the Comptroller’s Office to be effective. They are considered filed when received by any of our consultation site offices. Documents mailed through the U.S. Postal Service (certified, registered return receipt requested or express mail) and received by us are considered to be filed as of the mailing date.
Final Average Salary (FAS):
Average wages earned during any 36 consecutive months of credited service where earnings were highest. PFRS members may be eligible for a one-year FAS calculation if their employer has adopted this benefit. The FAS calculation may be subject to the following limitations. Visit our Final Average Salary (FAS) page for more information.
Tier 1 with a date of membership on or after 6/17/71:
Earnings in any one year of the FAS cannot exceed the earnings of the previous 12 months by more than 20 percent.
Tier 2:
Earnings in any one year of the FAS cannot exceed the average earnings of the previous two years by more than 20 percent.
Tier 3 and 4:
Earnings in any one year of the FAS cannot exceed the average of the previous two years by more than 10 percent.
PFRS One-Year FAS:
Earnings included in the FAS (last 12 months of earnings) cannot exceed the earnings of the previous 12 months by more than 20 percent.
Gross Salary Paid:
Part of the information supplied to the Retirement System by employers. This information is used to determine employee contributions and final average salary.
Internal Revenue Service (IRS) Limitations:
Section 415 of the Internal Revenue Code places limitations on the pensions of members who joined the Retirement System on or after January 1, 1990 , or retire under a retirement plan or benefit enacted or amended on or after October 14, 1987 . The amount of the limitation is predetermined based on the member’s age at retirement and is adjusted up to once a year depending on the rate of inflation. Section 401(a)(17) of the Internal Revenue Code restricts the amount of salary used to determine pension benefits of members who first join the Retirement System on or after April 1, 1996.
Loans:
Members may borrow against their own contributions. Different rules apply to Tier 1 and 2 loans versus Tier 3 and 4 loans. Visit our page, Loans: Getting One and Paying it Back, for more information.
Member Annual Statement (MAS):
These annual statements contain certain information about membership benefits.
Member Service:
Service on or after a member’s date of membership. Member service is mandatory.
Membership:
Mandatory:
Required membership in the Retirement System that applies to, police officers, paid firefighters and all permanent, full-time employees.
Optional:
An individual who is not required to join the Retirement System, but can do so if he/she wants. Unlike mandatory membership which begins on the first day of public employment, optional membership does not begin until a member registers with the Retirement System.
NYSLRS:
New York State and Local Retirement System, consisting of the New York State and Local Employees’ Retirement System and the New York State and Local Police and Fire Retirement System.
Option (Retirement):
Type of retirement payment chosen by a member at retirement. All options provide the member with a monthly benefit for life and some provide for possible payment to a designated beneficiary upon the member’s death.
Plan Books:
Publications distributed by the Retirement System that explain a particular retirement plan in detail. Plan Books are available from employers, our website, Call Center and consultation sites.
PFRS:
New York State and Local Police and Fire Retirement System.
Preliminary Annual Contribution Summary (PACS):
Summary prepared by the Retirement System each August for every participating employer. It provides a reconciliation of the previous year’s employer contribution payment and an estimate of the payment that will be due February 1.
Previous/Past Service:
Service which may be creditable toward retirement depending on the member’s tier. Previous service is optional. There are several types of previous service.
Non-Member:
service with a participating employer before a member joined the Retirement System.
Prior:
service with a participating employer before the employer joined the Retirement System.
Withdrawn:
service from a previous membership.
Transferred:
service from an active membership credited in another public retirement system in New York State.
Military:
Eligibility requirements and amount of service that may be credited depend on the section of law that applies.
Public Employment:
Paid service as an officer or employee of a public employer.
Registration Numbers:
A number assigned to each newly registered or re-registered member. This number is provided to the member’s employer(s) and must be included on your monthly report when reporting the member’s salary and service information to the Retirement System.
Retiree Annual Statement (RAS):
A document sent to retirees each year containing information about their pension totals paid the previous calendar year, taxes withheld and beneficiary information.
Retirement Benefit Calculator:
Calculator on our website that allows most members to project their retirement benefit.
Retirement Plan:
A plan that determines the benefits payable to members.
Regular Plan:
A plan where retirement eligibility is based on age and years of service credit (i.e., Section 75-i, Article 15).
Special Plan:
A plan where retirement eligibility is based on completion of a specified number of years of service credit in a specified job title (i.e., Section 89-b, Section 384-d).
Retirement and Social Security Law (RSSL):
The chapter of law that contains the majority of provisions that directly affect New York State’s public retirement systems and their members. Visit the NYSLRS Signed Legislation database for more information.
Retroactive Check:
Mailed to newly retired members when their benefit calculations have been completed. It includes the benefit payment due from the date of retirement, minus money received in advance checks.
Retroactive Payments:
Payments made by employers to employees that must be reported to us either by letter or on an adjustment report. These include retroactive payments paid to members already receiving retirement benefits, disability retirement benefits, or for whom the System has paid a death benefit. To make an adjustment to a member’s salary due to a legal settlement or any arbitration award, a copy of the legal document must be attached to an Adjustment Report Form (RS2050) Adobe pdf.
Sections 101 (ERS) and 401 (PFRS):
Retirement and Social Security Law governing situations in which a retiree may rejoin a New York State public retirement system.
Section 211:
A part of the law pertaining to retirees who want to return to public employment within New York State and would earn more than the limit allowed under Section 212. Employment with the Federal government, another state, a private employer or self-employment is not considered public employment.
Section 212:
A part of the law that states how much retirees may earn each year without affecting their pension if they return to public employment within New York State. Employment with the Federal government, another state, a private employer or self-employment is not considered public employment.
Service Credit:
Credit earned for paid public employment with a participating employer of the Retirement System or certain other service. (See Member Service and Previous/Past Service.)
Service Retirement:
Regular, non-disability retirement.
Service Retirement Benefit:
Regular retirement benefit payable to members who meet the eligibility requirements of their tier and retirement plan. It consists of a pension plus, if applicable, an annuity.
Sick Leave Credit under Sections 41-j (ERS) and 341-j (PFRS):
Optional benefit adopted by employers providing additional service credit for unused, unpaid sick leave upon retirement. May not be used to meet qualifications for an improved retirement benefit.
Social Security Offset for Tier 3 Members:
See Coordinated Escalator (CO-ESC) Offset.
Survivor’s Benefit:
Death benefit available to the beneficiary(ies) of certain retired New York State employees.
Teachers’ Insurance and Annuity Association — College Retirement Equities Fund (TIAA-CREF):
Service rendered under TIAA-CREF is neither transferable nor creditable in the Retirement System. However, ERS members who subsequently become members of TIAA-CREF will continue to accrue member service for the purpose of qualifying for a benefit, such as vested rights, as long as they continue active membership under TIAA-CREF. In this circumstance, TIAA-CREF service also provides a bridge to protect the NYSLRS membership from ending due to inactivity.
Tier:
Members are categorized into different groups. These groups are called tiers. Tiers are established by the State Legislature as part of the Retirement and Social Security Law. There are five tiers in ERS and three in PFRS. A member’s tier is determined by the date he/she joined the Retirement System. Visit our What Tier Are You In page for more information.
Transfer:
Process of consolidating an active membership in one New York State public retirement system with an active membership in another New York State public retirement system. Visit our Transferring or Terminating Your Membership page for more information.
Vesting:
Once a member has five years of credited service, he/she is considered “vested.” Vested members may leave public employment and, at a later date, contact us, apply for, and receive a vested retirement benefit. Visit our page about vesting for more information.
Withdrawal of Membership:
When a person’s membership in the Retirement System ends.
Voluntary:
Available to non-vested members and vested members with less than ten years of service credit. Eligible members may withdraw their Retirement System membership once they are separated from service for at least 15 days and file a Withdrawal Application (RS5014) Adobe pdf.
Mandatory:
Non-vested members who are out of public employment for over seven years, are terminated from their Retirement System membership.
Workers’ Compensation:
Funds paid in lieu of salary by the New York State Workers’ Compensation Board to a disabled employee whose injury was job-related.

(Rev. 3/10)

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