Purpose

The purpose of this bulletin is to notify agencies of the 2019-2020 maximum salary contribution limit for Tier 6 members of PFRS (7W), and ERS (7Y).

Background

On March 16, 2012, the Governor signed legislation creating a new Tier 6 that applies to employees joining a retirement system after March 31, 2012. Chapter 18 of the Laws of 2012 amends portions of the Retirement and Social Security Law, Education Law, and the Administrative Code of the City of New York that affect the contributions and benefits of members who join a New York State public retirement system on or after April 1, 2012. In accordance with the law, wages in excess of the annual salary paid to the Governor, pursuant to section three of article four of the state constitution shall not be included in the definition of wages.

In accordance with Senate Resolution No. 958 of Bill No. C00243, approved on April 1, 2019, which provides for dollar limitations on benefits and contributions under qualified retirement plans, the annual compensation limit for the Governor under Section 401(a), 404(I), 408 (k) (3) (C), and 408 (k) (6) (D) (ii) will increase to $225,000 for the 2020 plan year.

Affected Employees

Employees who are Tier 6 members of PFRS or ERS are affected.

Effective Date(s)

Effective as of Institution paychecks dated February 13, 2020 and Administration paychecks dated February 5, 2020.

OSC Actions

At the request of the New York State and Local Retirement System (NYSLRS), OSC will update PayServ to reflect the Maximum Salary Contribution Limit of $206,250 for the current plan period through March 31, 2020 for members of PFRS and ERS. This is a prorated figure based on partial plan year January 1, 2020 through March 31, 2020. The Maximum Salary Contribution Limit of $225,000 will be set for the 2020 plan year effective April 1, 2020.

As a result of this update, PayServ will automatically stop PFRS and ERS contributions when a Tier 6 employee’s pensionable earnings reach $206,250. Contributions will resume in the first paycheck of the following plan year which begins April 1, 2020.

Questions

Questions regarding this bulletin may be directed to the Payroll Retirement mailbox.