Here are the questions most often asked by NYCERS members (and the answers!). Because laws are constantly changing and the variety of plans is vast, all answers should be read as introductory rather than definitive. For specific information about your NYCERS account, please contact NYCERS’ Call Center at (347) 643-3000 or visit NYCERS’ Walk-in Center at 340 Jay Street in downtown Brooklyn.
How do I register for MyNYCERS?
MyNYCERS is your secure online portal to your NYCERS pension
account. You can access it any time to view your account
balances, see an estimate of your retirement benefit, file forms
online, and more.
Click here for information on how to register for MyNYCERS. It’s fast, easy, and free. NOTE: If you joined NYCERS recently, wait until you receive your Member Number and first paycheck after filing your membership application.
Step 1 – Register for a MyNYCERS Account
Start by visiting the MyNYCERS Login Page and clicking the “Register” button. Follow the prompts to validate your identity. You will need to create a User Name and a Password. Be sure to make a note of each one and keep them in a safe place.
Once you’ve registered your MyNYCERS account, you will have full access to MyNYCERS. If you have any questions, please contact NYCERS’ Call Center at (347) 643-3000.
When am I eligible to collect retirement benefits?
To be eligible to collect benefits, you are required to have a certain number of years of service and attain a certain age, depending on your Tier and Plan.
What types of service can I get credit for?
The following is a list of all the types of service that NYCERS recognizes. Please note, however, that not all plans allow all these types of service to be counted toward retirement. Many special occupation plans have stricter requirements and might not allow previous service from a different profession to be counted toward retirement.
- Membership Service: This is defined as paid full-time or part-time service performed after you last joined NYCERS, including all service while you are on the payroll of a participating employer, certain military service, and membership reinstatement.
- Transferred Service: Service that was credited to you while you were a member of another public retirement system in the City or State of New York which you transferred to NYCERS.
- Purchased Service (Buy-Back): Service credit purchased for full- or part-time public service performed before becoming a member of the pension system. Buying back service credit does not change your membership date.
Membership/Tier Reinstatement: Current members
who were previous members of a public employee retirement
system in New York City or New York State may apply to restore
their original membership date. In order to be eligible, the
first membership must have been terminated. Unlike purchasing
previous service, membership reinstatement requires that you
were previously a member of a public employee retirement
system, not merely employed by a public entity that would have
allowed you to join a retirement system.
A key benefit of membership reinstatement is reinstating to an earlier tier. If your first membership date was between July 27, 1976, and March 31, 2012, you could reinstate to Tier 4. If your first membership date was on or after July 1, 1973 and prior to July 27, 1976, you could reinstate to Tier 2. The benefits in Tiers 4 and 2 are generally better than those in Tier 6, so if you think you might be eligible you should consider applying. In order to make an informed decision, please visit our Customer Service Center and speak to a representative. In most cases the benefits will outweigh any cost, but individual cases differ.
- Military Service: Service credited for time spent on duty in one of the military branches of the U.S. Armed Forces. There are various laws that allow members to purchase Military service and each law has different provisions. You are entitled to receive credit for Military service under whatever law provides you with the greatest benefit.
- Union Leave Service: Credited service granted for an authorized leave of absence without pay to conduct labor relations activity on behalf of a public employee union.
- Part-time Service: Part-time service is service in which an employee is regularly scheduled to work less than 1,827 hours in a calendar year. Part-time service can be Membership Service, Purchased Service, Transferred Service, etc. Regardless of how part-time service is obtained, NYCERS will prorate credit on the basis of one year of full-time service — 1,827 hours worked in a calendar year.
Do I qualify to take out a loan?
Tier 1 and Tier 2: To qualify to take out a loan, you must:
- Complete three years of NYCERS membership
- Be in active payroll status (unless you are on an approved leave of absence)
- Not be retired
Tier 3, Tier 4, and Tier 6: To qualify to take out a loan, you must:
- Complete one year of NYCERS membership
- Have a minimum of $1,334 in your NYCERS retirement account
- Be in active payroll status
- Not be in default on a previous loan from NYCERS
- Not be retired
Note: 22-Year Plan members (Tier 3) cannot borrow against their contributions.
If you are a registered member of our website, the Loan Information page in your MyNYCERS account will tell you if you qualify to take out a loan.
How do I apply for a loan online?
NYCERS’ online loan application enables eligible Tier 3, Tier 4, and Tier 6 members with a registered MyNYCERS account to log in to their accounts, calculate various loan options, and then apply for a loan online.
What is the interest rate for a loan?
Currently, the effective interest rate is 6.2% (6% interest rate plus 0.2% mandatory loan insurance).
How often can I borrow?
Tier 1 and 2 members may take out two loans in
any 12-month period.
Tier 3, 4 and 6 members can take out one loan in any 12-month period. If you are a member with a registered MyNYCERS account, log in and check the Loan Information page to find out when you will next be eligible to take a loan.
Will my loan be taxed?
If subject to tax, a loan is counted as ordinary income for Federal income tax purposes. In addition, if you are under the age of 59½, you will incur a 10% early distribution penalty tax assessed by the Internal Revenue Service.
Tier 3, 4, and 6 loans are subject to taxation if the total
outstanding loan is both:
1. Greater than $10,000
2. More than 50% of the member’s non-forfeitable accrued vested benefit.
When borrowing results in a consolidated loan amount over $50,000, at least the excess over $50,000 is subject to Federal income tax.
Under IRS regulations, newly consolidated loans may be subject to taxation. As always, the balance of an existing loan can be consolidated with a new loan, creating a revised 5-year repayment schedule. After January 1, 2004, however, consolidated loans with a repayment schedule beyond the original 5-year repayment date most likely will create a significant tax consequence. Please note that under IRS regulations, a loan from NYCERS or a loan from your 457 or 403 (b) Deferred Compensation Plan account are considered to be loans from the “same employer” and are subject to all IRS rules concerning loans. If all or any part of your next pension loan is subject to Federal taxes, NYCERS will offer you three loan processing methods (Refinance, Original Terms, and New Loan) to help you make an informed decision about the tax consequences.
Three Loan Processing Methods
Refinance: You have an outstanding loan that has not yet been paid in full. If your new loan is approved, NYCERS will consolidate the existing balance with the new amount, and a new repayment schedule (not to exceed 5 years) will be implemented. This method may result in the highest tax consequence.
Original Terms: You have an existing loan that has not yet been paid in full. If your new loan is approved, the amount of the new loan will be added to the existing balance. Under this method, the consolidated amount will be paid within the original repayment schedule (not to exceed 5 years) of the existing loan. Your loan may be subject to Federal taxes.
New Loan: You are applying for a loan for the first time, or you have paid off a prior loan in full. The loan could have tax consequences if it exceeds IRS thresholds.
Applying for a Loan in Person
When you apply for a loan in person at our Customer Service Center, you will be provided with a tax authorization letter that outlines the three methods. You must select how you want the loan to be distributed and return the tax authorization letter to NYCERS before your loan application can be processed. (When you apply in person at NYCERS, all of this can be handled in one visit).
Applying for a Loan Online
When you apply for a loan online, you will be able to calculate different loan amounts and repayment schedules for tax-free and/or taxable loans, and select the loan you prefer.
Taxes at Retirement
Internal Revenue Service regulations now require NYCERS to treat pension loans as a retirement distribution if they are taken at, or near, the time of retirement. However, you may roll over the taxable portion to an IRA or Employer Plan. In the event you choose not to roll over the taxable amount, NYCERS is required to withhold 20% Federal tax before issuing the check. If you have not yet reached the age of 55 and you choose not to roll over the taxable distribution, you will also be subject to an additional IRS 10% early distribution penalty tax when you file your taxes for that calendar year.
If you elect to roll over the eligible distribution, it is your responsibility to ensure that the institution you name will be able to receive this direct rollover from NYCERS.
The taxable portion of any prior loan balance is also available for rollover at retirement. However, you must accomplish this rollover on your own because the distribution was previously given to you. You will receive a post-retirement rollover letter approximately 30 days after you have retired explaining the exact amount that is eligible for rollover. You will have until the due date (including extensions) of your tax return for the year in which the distribution was made to roll over the taxable portion to an eligible retirement plan. Before you file for retirement, visit NYCERS to learn about the tax and retirement benefit consequences of an unpaid loan and about your repayment options.
How are loans paid back?
Tier 3, 4, and 6 members: The law requires that
you must repay your NYCERS loan within five years. In addition,
loan repayments cannot be made at a rate less than 2% of your
gross salary per pay period.
Tier 1 and 2 members: The law requires that you must repay your NYCERS loan within 999 pay periods (38.4 years). In addition, loan repayments cannot be made at a rate less than 5% of your gross salary per pay period.
Loans are repaid at a fixed rate through payroll deductions. When you apply for the loan, you will be given the option to choose any rate you wish as long as it meets the minimum repayment requirements.
For all Tiers: At any time before retirement, you may request in writing to repay the entire outstanding loan in one lump sum.
If you choose to repay your loan after retirement, the monthly pension benefits paid after you repay the loan will not be reduced by the actuarial equivalent of the loan. Monthly pension benefits paid prior to the repayment of the loan will not be adjusted.
If you have registered your MyNYCERS account, the Loan Information page can help you estimate the monthly payments for a loan you want to take out (register or log in here).
Where can I get more information on the website about loans?
There are two great ways to get more information on our website about loans:
- the Loans Brochure for your Tier — Tier 1 and 2; Tier 3, 4 and 6
- the Loan Calculator in your MyNYCERS account, which helps registered members to estimate the cost of taking a loan
How is my retirement benefit calculated?
The amount of your retirement benefit is based on the Tier and Plan you are in, as well as some, or all, of the following factors:
- Your required contributions and/or additional contributions
- The amount of service you are credited with at retirement
- Your salary
If you are a member with a registered MyNYCERS account, log in and use the online Benefit Calculator to estimate how much your benefit will be when you retire.
Is my retirement benefit (pension) taxable?
NYCERS’ benefit payments are subject to Federal taxes, but are exempt from New York State and local income taxes. NYCERS benefits may be subject to state and local income taxes in states other than New York. Taxes are automatically withheld from all benefit checks you receive from NYCERS based on the Federal tax table for a person who is married claiming three exemptions, unless you elect in writing to have taxes withheld on a different basis, or for no taxes to be withheld.
Even though your monthly retirement benefit is subject to Federal income taxes, part of it may be excludable. Contributions you made to NYCERS on a pre-tax basis are considered 414(h) Contributions. Non-414(h) Contributions were deducted from your paychecks after tax, and are therefore not subject to taxation a second time. The portion of your retirement benefit that represents Non-414(h) Contributions is exempt from Federal taxes.