You are required to contribute 3 percent of your gross earnings toward your retirement benefits for 25 years or until retirement, whichever is earlier. If you are employed by more than one participating employer, once you join the Retirement System, all salary and service earned in connection with all employment must be reported to us.
Under Internal Revenue Code Section 414(h), effective October 1, 2013, your required 3 percent contributions are tax-deferred until they are distributed to you. These contributions are reportable for federal income tax only when you withdraw or retire from the Retirement System. Therefore, the 3 percent contributions you make on or after October 1, 2013* are:
- Not reported as wages for federal income tax;
- Reported as wages for New York State and local income taxes;
- Reported as wages for Social Security;
- Reported as wages to the New York State and Local Retirement System, and used in the calculation of all benefits paid by the Retirement System; and
- Calculated on your full gross reportable earnings, before any salary reductions for any other tax-deferred plan.
*IRC Section 414(h) does not apply to PFRS member contributions made prior to October 1, 2013 and is not retroactive.
Page updated as of 11/13