If you have questions about reporting Tier 5 employees that are not covered here, please email Employer Services.
What tier will new Retirement System members be in?
- Members who joined the Employees’ Retirement System (ERS) January 1, 2010 through March 31, 2012 will be in Tier 5.
- Members who joined the Police and Fire Retirement System (PFRS) January 9, 2010 through March 31, 2012 will be in Tier 5 (regardless of whether or not they are required to make contributions).
How will I report new members to the Retirement System?
You should report new Tier 5 members on your retirement report in the same manner that you report other members of other tiers.
Registration numbers for ERS Tier 5 members will begin with “5”. These members will make 3 percent contributions for their entire careers. Their contributions are treated like ERS Tier 3 or 4 members. Members in Uniformed Court Officer and Unified Court Peace Officer job titles will make 4 percent contributions for their entire careers.
PFRS Tier 5 registration numbers will begin with 0B5. Some PFRS Tier 5 members will contribute and some will not. You will be responsible for letting us know whether a new PFRS employee will or will not contribute by completing the new collective bargaining agreement section on the PFRS membership application.
I understand there are limits to the amount of overtime that can be used in the calculation of a Tier 5 member’s FAS. Do I still report all overtime to the Retirement System?
For ERS Tier 5 members, the 2014 limit is $16,883 and is subject to a 3 percent annual inflation factor each year. You should not report overtime payments or deduct retirement contributions on overtime payments in excess of the annual limit.
For PFRS Tier 5 members, the limit is 15 percent of salary. You should not deduct retirement contributions on overtime payments in excess of this limit and, effective April 1, 2012, you should not report these excess overtime payments.
What constitutes overtime?
For compensation to be classified as “overtime,” it must meet both of the following requirements (See Retirement and Social Security Law Sections 501(24), 601(l) and 1203.):
- Compensation must have been paid according to a law or policy under which employees are paid at a rate greater than their standard rate, and
- Compensation must have been paid for additional hours worked beyond those required.
- Overtime paid at time-and-a-half, double-time, or greater;
- Recall overtime;
- Holiday premium pay for holidays worked;
- Pre-shift briefing pay.
What is not considered overtime?
- Stand-by pay;
- Inconvenience pay;
- Location pay;
- Straight pay for holidays.
How is overtime reported to the Retirement System for ERS members?
Overtime should be reported to the Retirement System until the ERS member has reached the overtime cap amount in any calendar year, currently $16,883 for 2014. The maximum reportable overtime increases by 3 percent each calendar year. See the ERS Overtime Limits tables.
Once the ERS member’s amount of overtime has reached the cap, any overtime paid to that individual for the remainder of the calendar year should not be reported to the Retirement System. It is important to note that contributions should not be collected on any overtime amounts greater than the overtime cap.
Once the overtime cap is reached, the ERS member must still be reported to the Retirement System, however, overtime pay that exceeds the cap should not be reported, nor should contributions be taken on it. For example, an ERS member has earned $700 for a monthly period. This includes $200 in overtime. This member has reached the overtime cap therefore, only $500 should be reported to the Retirement System. Contributions should be taken only on the $500.
How is overtime reported to the Retirement System for PFRS members?
Overtime that exceeds 15 percent of a PFRS member’s salary should not be reported to the Retirement System.
Do I deduct these new member contributions before or after taxes?
For ERS Tier 5, you will deduct contributions from your members the same way you deduct contributions from your ERS Tier 3 or 4 members — before taxes. Contributions are tax-deferred under Internal Revenue Code 414(h).
For PFRS Tier 5, mandatory contributions are deducted before taxes, effective October 1, 2013.
One of our Tier 5 police officers is out of work due to an injury sustained in the performance of duty. The officer is receiving full salary under Section 207-c of the General Municipal Law (GML). Should we deduct 3 percent contributions from this salary?
Yes. Tier 5 PFRS members are required to contribute 3 percent of any salary they receive under Section 207-c GML.