Employers’ Frequently Asked Questions
If you have questions about reporting Tier 6 employees that are not covered here, please email Employer Services.
- When did Tier 6 begin?
- How do I report Tier 6 members to the Retirement System?
- Do I report overtime earned by Tier 6 members to the Retirement System?
- What constitutes overtime?
- Do I deduct Tier 6 member contributions before or after taxes?
- One of our Tier 6 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 contributions from this salary?
- What types of wages do I include in a Tier 6 member’s “Annual Wage” on the Membership Registration form?
Members who first joined the Employees’ Retirement System (ERS) or the Police and Fire Retirement System (PFRS) on or after April 1, 2012 will be in Tier 6.
You should report Tier 6 members on your retirement report in the same manner that you report members of other tiers.
Registration numbers for ERS Tier 6 members will begin with “6.” These members will contribute for their entire careers except for State correction officers, whose contributions cease once they have 30 years of service credit.
PFRS Tier 6 registration numbers will begin with “0B6.” Most PFRS Tier 6 members will contribute for their entire careers. However, PFRS Tier 6 members who have accrued the maximum service credit allowed by their retirement plan will no longer be required to contribute.
In addition, if a new member is covered by a collective bargaining agreement (CBA) that requires you to offer a non-contributory special 20- or 25-year plan, and that CBA was in effect on January 9, 2010, that member will not be required to contribute. Any member who joins after the collective bargaining agreement terminates, will be required to contribute. You will be responsible for letting us know whether a PFRS Tier 6 employee must contribute by completing the CBA section on the PFRS membership application.
You must report overtime earnings up to the overtime limit.
For Tier 6 ERS members, please refer to our Tier 6 overtime limitation chart. The limit is adjusted annually based on the Consumer Price Index as of December 31st of the previous year.
For Tier 6 PFRS members, the limit is 15 percent of salary.
You should continue to report all non-overtime pay, days worked and any loan or arrears payments for Tier 6 members who have reached the overtime limit.
In order 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.
You will deduct contributions from ERS Tier 6 members’ earnings the same way you deduct contributions from your ERS Tier 3, 4 or 5 members — before taxes. Effective October 1, 2013, PFRS Tier 6 mandatory contributions are also tax-deferred under Internal Revenue Code 414(h) and must be deducted before taxes. IRC Section 414(h) does not apply to PFRS member contributions made prior to October 1, 2013 and is not retroactive.
One of our Tier 6 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 contributions from this salary?
Yes. PFRS Tier 6 members are required to pay contributions on any salary they receive under Section 207-c GML.
Employers are required to provide a new employee’s annual wage to the Retirement System. The annual wage is the projected base pay amount that a full-time employee is expected to earn on an annual basis at the time they are hired. This should include all wage types that will be paid to an employee on a regular basis in each paycheck, including, but not limited to:
- Regular pay
- Shift differential pay
- Location pay
- Increased hiring rate pay
For employees who are hired to work on a less than full-time basis, employers will need to calculate an “annualized” version of the annual wage amount based on the base pay wage types described above. Annualizing a wage is the process of determining what the new member’s annual wage would be if they were working as a full-time employee. The membership registration form provides sample formulas that can help you annualize a new member’s annual wage based on a variety of less than full-time employment scenarios.
If you have any questions regarding how to determine an Annual Wage for a new employee, please contact us at RTEmpSer@osc.state.ny.us.