In the New York State and Local Retirement System (NYSLRS), the term “tier” refers to the particular membership status established by legislation, and is determined by the date a member joined NYSLRS (learn more about Membership Tiers). For information about reporting member contributions, including tax treatment, see the Membership Contribution section of the Legacy Reporting web presentation.
These members are covered under the provisions of Article 15, as modified by Chapter 18 of the Retirement and Social Security Law (RSSL), Laws of 2012. Tier 6 ERS members are required to contribute a percentage of their reportable earnings (a minimum of 3 percent, see chart below) for their entire career, except New York State correction officers, who are not required to contribute after 30 years of service.
These members are covered under the provisions of Article 22 of the RSSL. Tier 6 PFRS members are required to contribute a percentage of their reportable earnings (a minimum of 3 percent, see chart below) for their entire career; however, there are some exceptions:
- Tier 6 PFRS members enrolled in retirement plans limiting the amount of creditable service they may accrue are not required to contribute once they reach the maximum amount of service allowed by their plan.
- If a union-negotiated collective bargaining agreement in effect on January 9, 2010 required an employer to offer a noncontributory plan, any new employees who joined while that agreement was in place, and who elected the special plan, may not be required to contribute.
Member contribution rates for Tier 6 members are based on their earnings and can change each fiscal year. The rates range from 3 to 6 percent.
|Annualized Wage or Actual Earnings||Contribution Rate|
|$45,000 or less||3.00%|
|$45,000.01 to $55,000||3.50%|
|$55,000.01 to $75,000||4.50%|
|$75,000.01 to $100,000||5.75%|
|More than $100,000||6.00%|
For the first three years of NYSLRS membership, a Tier 6 employee contributes based on the annual wage you provided when you enrolled them.
For part-time employees, you calculate an “annualized wage” at enrollment. Please visit our Annual Wage page to see how to calculate an annualized wage at enrollment. The rate is based on their annualized wage, but the contributions these members actually make are based on their earnings.
After three years, the law requires a contribution rate based on a “two-year look back” at actual earnings. Here’s an example:
- State fiscal year 2018–2019: John Smith joins NYSLRS. He is projected to earn $42,000.
- March 2019: We provided you a rate for Mr. Smith based on the annual wage from his membership application ($42,000), so his rate is 3 percent. You used this rate for all of State fiscal year 2019–2020.
- March 2020: The rate for Mr. Smith is still based on the annual wage from his membership application, so his rate is 3 percent. You used this rate for all of State fiscal year 2020–2021.
- March 2021: We provide you a rate for Mr. Smith based on his last completed fiscal year; April 1, 2019, through March 31, 2020. Mr. Smith earned $46,000 over the last fiscal year, so his rate will go up to 3.5 percent. Use this rate for all of State fiscal year 2021–2022.
In March of each year, we provide employers with the rates your Tier 6 employees are required to contribute during the upcoming State fiscal year (April 1 – March 31). You’ll receive an email from NYSLRS each year when updated contribution rates for the next fiscal year are available for you to view. Please review these rates carefully, and make sure your payroll system withholds the proper amounts for your Tier 6 employees.
To view the contribution rates, sign in to Retirement Online, go to your Reporting Dashboard and click “Member Contribution Rates.” You’ll see a list of all of your employees. You only need to look at the employees whose contribution rates changed. Identify these employees by entering 04/01/2021 in the “As Of Date” column and clicking the “Search” button. Members whose rate needs to be changed will sort to the top of the list and the date in the “Contribution Rate Effective As Of" column will be 04/01/2021. You can export this list to excel and sort by Tier, if it’s helpful.
Tier 6 contribution rates are based on all of a member’s employment that is reported to NYSLRS, not just their employment with your location. If the contribution rate is higher than you expected, this could be the reason. Also, be aware that the earnings in the "Annual Wage" column shown on the Member Contribution Rates page may not include all the earnings NYSLRS used to calculate the member’s contribution rate. If you have a question about whether a rate is correct, please use our help desk form to send your question to our Employer Reporting staff.
Most Tier 5 ERS members are covered under the modified provisions of the Coordinated Retirement Plan, Article 15. Tier 5 ERS members are required to contribute 3 percent of their earnings for their entire career (except New York State correction officers, who are not required to contribute after 30 years of service, and uniformed court officers and peace officers employed by the Unified Court System, who are required to contribute 4 percent of their earnings for all of their years of public service).
Most Tier 5 PFRS members are covered under modified provisions of Article 22. Tier 5 PFRS members must contribute 3 percent of their earnings for their entire career unless they are enrolled in a retirement plan where the maximum amount of service credit allowed is capped. In that case, Tier 5 PFRS members are not required to contribute after accruing the maximum amount of service allowed in their retirement plan. In addition, if a union-negotiated collective bargaining agreement was in effect on January 9, 2010 which required an employer to offer a noncontributory plan, any new employees who joined while that agreement was in place, and who elected the special plan, may not be required to contribute.
Most Tier 3 ERS members are covered under the provisions of both the Coordinated-Escalator Retirement Plan (CO-ESC), Article 14, and the Coordinated Retirement Plan, Article 15, except for New York State Correction Officers who are covered by a modified CO-ESC Retirement Plan, Article 14. Most Tier 4 members are covered under the provisions of the Coordinated Retirement Plan, Article 15. Tier 3 PFRS members can be covered by Article 11 or Article 14, depending on their plan coverage.
Tier 3 and 4 ERS members contributed 3 percent of their wages until they had been a member of the system for ten years (or had ten years of credited service, whichever came first). Most Tier 3 PFRS members covered by Article 11 were not required to contribute. Tier 3 PFRS members covered by Article 14 are required to contribute 3 percent of their wages for 25 years.
Under Sections 21(L) and 321(L) (RSSL), a Tier 1 or 2 member in a non-contributory plan may choose to make voluntary contributions to the system to purchase additional annuity income. PFRS Tier 3 – 6 members who are covered under non-contributory plans are also allowed to make voluntary contributions. Any whole percentage of gross salary from 1 percent to 10 percent may be contributed.
Whether the member is in ERS and applying to make voluntary contributions under 21(L), or in PFRS and applying under 321(L), a Section 21(L) Election form (RS5379) must be completed by the member and filed with the member’s payroll officer. The payroll officer should complete the employer portion of the form and then fax it to us at 518-486-4382. We must have the employee’s Election to Make Voluntary Contributions (RS5379) form on file at NYSLRS before you begin taking deductions, otherwise the voluntary contributions will be rejected. We will notify you when and how to begin taking deductions.
Voluntary contributions can be stopped by filing a Cancellation of Election to Purchase Additional Annuity form (RS5378) with the payroll officer. The payroll officer should complete the employer portion of the form and then fax it to us at 518-486-4382. If a member wishes to change the percentage of voluntary contribution, a new election form (RS5379) should be completed and the procedure described above should be followed. A member may make only one election, modification or cancellation during a 12-month period.
Deductions at the designated rate begin on the next payroll following receipt of the election form by the payroll officer. You must include these voluntary contributions in your monthly report.
1 Updated 3/21