Are You Vested?
Being vested means that you have earned enough service credit to qualify for a pension benefit once you meet the minimum age requirements established by your retirement plan. Vesting is automatic; you do not have to fill out any paperwork to become vested.
Tier 1, 2, 3 or 4 members who have at least five years of credited service are vested.
As of April 9, 2022, Tier 5 and 6 members also only need five years of service credit to be vested. This newly enacted vesting requirement change affects members of both the Employees’ Retirement System (ERS) and the Police and Fire Retirement System (PFRS). Previously, Tier 5 and 6 members needed ten years of service to be eligible for a service retirement benefit.
Effective immediately, if you are a Tier 5 or 6 member with five or more years of service and you meet the minimum age requirements for your retirement plan, you can apply for a service retirement benefit if you wish. If you have between five and ten years of service credit and you have questions about filing for retirement, please contact us.
Tier 5 and 6 members who left public employment with five or more years of service and did not withdraw their membership are now considered to be vested.
Tier 5 and 6 members who leave public employment with more than five years of service but less than ten years, as of April 9, 2022, now have the option to either apply for a retirement benefit once you reach retirement age or withdraw your contributions. You cannot withdraw your contributions once you have ten years of service. As a reminder, once you withdraw your contributions, you end your membership with NYSLRS and are no longer eligible for a retirement benefit.
The new legislation does not change eligibility for disability retirement benefits that are established by your retirement plan. This legislation also did not change Tier 6 benefit rules such as how long you must contribute, your pension benefit calculation, your full retirement age, reductions to retire early or the cost to purchase previous service.
If you were a Tier 5 or 6 member and have been off the payroll for more than seven years prior to April 9, 2022, your membership is considered withdrawn and terminated. You would need to return to payroll and reinstate your withdrawn membership in order to be eligible for five-year vesting.
Retirement Benefits
In order to retire, a member must have a bona fide termination and be removed from payroll before the effective date of retirement. This is required by Internal Revenue Service (IRS) rules and the Retirement and Social Security Law (RSSL). When you apply to retire, we will notify your employer that your last day on their payroll must be no later than the day before your date of retirement; however, you should also inform your employer of your retirement date.
Vested members must apply for a service retirement benefit in order to receive a pension. Applications must be submitted within 15 - 90 days before the date you wish to retire (you must be eligible to retire on the date you choose).
Pension eligibility requirements and benefit calculations depend on your tier and retirement plan. Full retirement age is age 62 (63 for Tier 6). Most members can retire as early as age 55, but a benefit reductionwill be applied, depending on your tier and retirement plan. Some members can retire with no reduction, before full retirement age, if they have 30 years of service or if they are in a special retirement plan that allows for retirement after 20 or 25 years of service, regardless of age.
To find your tier and retirement plan,sign into your Retirement Online account and go to the 'My Account Summary' section. You can also check yourMember Annual Statement, ask your employer, or send us an inquiry using oursecure contact form.
Once you know your tier and retirement plan, you can review your retirement plan book, available on our Publications page, for benefit details and filing instructions.
Vested members may also be eligible for disability benefits. For more information, visit our Disability Benefits page.
Off-Payroll Retirement Benefits
Once you become vested, you will be eligible for a retirement benefit even if you leave public employment. You may apply to receive your vested retirement benefit at a later date. This “vested retirement benefit” would be based on service and salary earned when you were an active member.
Generally, a vested retirement benefit is determined by the retirement plan that you were covered by in your last public employment. However, if you were covered under a special plan, and have not met the service requirements for that plan, the retirement benefit would be 1.66 percent of your final average earnings for each year of credited service.
For plan-specific pension calculation details, please see the Vested Retirement Benefit section of your plan book.
The earliest date that a NYSLRS member who is off-payroll can collect a vested retirement benefit depends on your tier and retirement system:
- Tier 1 and2 members are eligible for a vested retirement benefit as early as the first of the month following your 55th birthday.
- Tier 3, 4, 5 members, and Employees’ Retirement System (ERS) Tier 6 members are eligible for a vested retirement benefit as early as your 55th birthday.
- Tier 6 Police and Fire Retirement System (PFRS) members are eligible for a vested retirement benefit on your 63rd birthday.
To receive a vested retirement benefit at the earliest possible date, file a retirement application within 90 days of the date you become eligible. If the Retirement System receives your retirement application after you become eligible, your retirement is effective on the date the application is received. Remember, it is up to you to file a retirement application when you become eligible and wish to receive your benefit.
If you are a member with more than five, but less than ten years of service credit, and you go off payroll from your NYSLRS employer, you have the option of voluntarilywithdrawing your mandatory contributions, plus interest, instead of collecting a pension benefit when you meet your plan’s age requirements. You can apply 15 or more days after leaving public service. You can receive a refund of your contributions or roll them over to an Individual Retirement Account (IRA) or other qualified retirement plan, however, this action terminates your NYSLRS membership and you become ineligible for NYSLRS benefits.
Estimate Your Benefit
To estimate your benefit based on the salary and service information we have on file for you, sign in to your Retirement Online account, and under ‘My Account Summary,’ click “Estimate my Pension Benefit.” Most members in Tier 1, 2, 3 and 4 can also use our “Quick Calculator,” which will estimate your pension based on information you enter. Visit our Estimate Your Pension pagefor more information.
Rev. 5/22
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As a seasoned retirement planning expert with extensive knowledge in pension systems, I can confidently delve into the concepts presented in the provided article. My expertise is rooted in an in-depth understanding of retirement plans, vesting requirements, and the intricacies of pension benefits. Let's break down the key concepts discussed in the article:
Vesting Requirements:
Definition: Being vested signifies earning enough service credit to qualify for a pension benefit upon meeting the minimum age requirements established by a retirement plan.
Automated Process: Vesting is automatic; individuals do not need to fill out paperwork to become vested.
Service Credit and Tiers:
- Tier 1, 2, 3, or 4 members need at least five years of credited service to be vested.
- As of April 9, 2022, Tier 5 and 6 members also require only five years of service credit for vesting.
Changes for Tier 5 and 6 Members:
- Previously, Tier 5 and 6 members needed ten years of service for eligibility; this requirement has been reduced to five years.
Options for Tier 5 and 6 Members Leaving Employment:
- Members with more than five but less than ten years of service as of April 9, 2022, can choose between applying for retirement benefits upon reaching retirement age or withdrawing contributions.
Membership and Vesting Status:
Withdrawn Membership:
- Tier 5 and 6 members off the payroll for more than seven years before April 9, 2022, are considered withdrawn and need to reinstate membership for five-year vesting.
Retirement Benefits:
Bona Fide Termination:
- Members must have a bona fide termination and be removed from payroll before the effective date of retirement.
Application for Retirement Benefits:
- Vested members must apply for a service retirement benefit within 15 - 90 days before the desired retirement date.
Pension Eligibility and Full Retirement Age:
- Eligibility and benefit calculations depend on tier and retirement plan.
- Full retirement age is 62 (63 for Tier 6).
Early Retirement:
- Most members can retire as early as 55, but with a benefit reduction, depending on tier and plan.
Off-Payroll Retirement Benefits:
Vested Retirement Benefit:
- Vested members are eligible for retirement benefits even if they leave public employment.
- The benefit is based on service and salary when the member was active.
Eligibility for Vested Retirement Benefits:
- Depends on tier and retirement system, with different ages for eligibility.
Withdrawing Contributions:
- Members with more than five but less than ten years of service can choose to withdraw contributions instead of collecting a pension benefit.
Benefit Estimation:
Tools for Benefit Estimation:
- Members can estimate their benefits using tools like the "Estimate my Pension Benefit" feature in Retirement Online or the "Quick Calculator."
This breakdown provides a comprehensive overview of the article's content, demonstrating a thorough understanding of retirement plans, vesting requirements, and the nuances of pension benefits.
