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Office of the New York State Comptroller’s Seal

NYS Comptroller

Thomas P. DiNapoli

Tier 6 Benefit Information

Annual Wage Calculation

When Do We Need it; How is it Determined?

The Retirement System is required by law to determine the Tier 6 member contribution rates that employers must apply to the earnings of each Tier 6 employee. The Retirement System determines the Tier 6 employee’s contribution rate at the time the member is initially registered to membership, and then again before the start of every fiscal year for the remainder of the employee’s career.

One of five different member contribution rates will be applied, based on the amount of the employee’s wage.

The law requires employers to provide the employee’s projected annual wage amount to the Retirement System at the time of registration. During the first three years of their membership, the employee’s projected annual wage amount will be used to determine his or her member contribution rate.

We ask for the annual wage of new employees in question 9a on our ERS Membership Registration form (RS5420) Adobe pdf, and question 11a on our Police and Fire Membership Application form (PF5022) Adobe pdf. We cannot register new members without this information. A delay in registration may result in the member owing mandatory arrears payments.

In order to ensure the correct contribution rates are applied to the earnings of your Tier 6 employees, it is important that you understand what types of wages should be included in the annual wage amount.

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 (geographic pay)
  • Increased hiring rate pay

For employees who are hired to work on a less than full-time basis, if the employee joins NYSLRS, 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 he or she were working full-time. 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 email our Employer Reporting staff.

(Rev. 4/18)