Highlights of ERS Tier 6 Benefits
These are the major ERS benefits affected by Tier 6. Benefits not described here have not changed.
- Members must contribute for all their years of public service, except for New York State Correction Officers covered by Article 14 whose contributions are limited to 30 years of service.
- From 4/1/2012 through 3/31/2013, Tier 6 members contribute 3 percent of their gross salary, except for Uniformed Court Officers and Peace Officers employed by the Unified Court System who contribute 4 percent.
- Beginning 4/1/2013, the percentage is based on the member’s wages.
|$45,000 or less||3%|
|$45,000.01 to $55,000||3.5%|
|$55,000.01 to $75,000||4.5%|
|$75,000.01 to $100,000||5.75%|
|More than $100,000||6%|
- Under Internal Revenue Code Section 414(h), Tier 6 contributions are tax-deferred until they are distributed.
- ERS Tier 6 Members can borrow against their contributions once they meet eligibility requirements.
Reportable Salary Limit
- Reportable salary may not exceed the salary of the Governor of the State of New York, which is set by law and is currently $179,000.
- If the Governor’s salary changes, the reportable salary limit would change accordingly.
- If a member reaches the reportable salary limit, you should not deduct contributions from any salary paid in excess of the limit.
- You should continue to report all salary paid, days worked and any loan and/or arrears payments on your monthly report.
Overtime pay in excess of an annual cap is not included in the definition of wages. It should not be reported to the Retirement System and cannot be used in a final average salary calculation.
The overtime cap increases each fiscal year. The amount of the increase is based on the Consumer Price Index on December 31 of the previous year.
- The overtime cap for fiscal year 2013 (April 1, 2012 through March 31, 2013) is $15,000.
- The overtime cap for fiscal year 2014 (April 1, 2013 through March 31, 2014) is $15,261.
You should report overtime until the member has reached the overtime cap for that fiscal year. Once the cap has been reached, you should not report any additional overtime paid to that member for the remainder of the fiscal year. The member’s salary and days worked must still be reported; only overtime pay that exceeds the cap should not be reported. In addition, contributions should not be collected on any overtime amounts greater than the cap.
Other Earnings Limitations
Earnings from more than two separate employers in any one year will be excluded from the definition of wages for Retirement System purposes.
Final Average Salary (FAS)
- FAS is the average of the highest five consecutive years of reportable salary subject to limits. Any year of salary used in the FAS calculation cannot exceed the average of the previous four years by more than 10 percent.
- Lump sum payments at retirement for accumulated vacation will not be included in an FAS calculation.
Service Retirement Eligibility
- Members must have 10 years of service credit to be vested and eligible for a service retirement benefit.
- Members in regular plans must be age 63 before they may receive an unreduced service retirement benefit. Regular plans are those that permit retirement after the member has attained a certain age and earned a certain amount of service credit; special plans permit retirement after the member has earned a certain amount of service credit.
- Members can retire between ages 55 and 63 with reduced benefits for early retirement.
- The benefit reduction is 6.5 percent for each year prior to age 63 that a member retires.
Service Retirement Benefit
- With less than 20 years of service credit, the benefit equals 1/60th (1.66 percent) of the FAS for each year of service credit.
- With 20 years of service credit, the benefit equals 35 percent of the FAS.
- Members will receive an additional 2 percent of their FAS for each year of service credit in excess of 20 years.
Credit for Unused Sick Leave
Eligible members may receive service credit for unused, unpaid sick leave days at retirement. The maximum number of creditable sick leave days is generally 100, but can be 165 or 200 in certain cases.