Tier 6, 63/10 Summary Plan Description (SPD)

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INTRODUCTION

The New York City Employees’ Retirement System (NYCERS) is pleased to present the Tier 6, 63/10 Summary Plan Description (SPD) booklet.

The New York State Retirement and Social Security Law (RSSL) was amended by Chapter 18 of the Laws of 2012, establishing Tier 6 for individuals who join NYCERS on or after April 1, 2012. This SPD booklet is a complete guide to the 63/10 retirement plan and its myriad provisions. The information contained in this booklet is derived from applicable laws and/or rules that govern membership in this retirement plan, including, but not limited to, the Administrative Code of the City of New York, the New York State Retirement and Social Security Law (RSSL), and the rules of NYCERS. Since laws and/or rules affecting your retirement plan or the administration of benefits can be changed in any given year, information may need to be amended from time to time. Where changes occur, an SPD Update will accompany this booklet describing the relevant changes. In the event of a conflict between the contents of this SPD booklet or SPD Update and any applicable laws and/or rules, the applicable laws and/or rules will govern.

In NYCERS’ defined benefit structure, laws guide the administration of pension benefits. In addition, some laws authorize the Board of Trustees to establish rules. As such, the origins of many of the benefits explained in this SPD booklet can be traced back to a section of law or NYCERS rule. To maximize the effectiveness of this booklet for NYCERS members and staff alike, this booklet contains:

  • Legislative References – The Chapter which created a new law or amended an existing law either establishing or modifying a particular benefit explained in this booklet
  • Statutory References – The section of the RSSL, the NYC Administrative Code or other applicable law (e.g., New York State General Municipal Law) containing the relevant pension benefit

Members and/or staff who wish to consult Chapters or sections of law may do so by visiting http://public. leginfo.state.ny.us, a website containing legislation dating back to 1995 and the laws of New York.

Throughout this SPD booklet, you will find each reference described above following a paragraph explaining a benefit. The abbreviation for each reference is as follows:

  • LR = Legislative References
  • SR = Statutory References

The absence of a legislative or statutory reference may mean that such references are not applicable or the origins were not readily available or that a NYCERS rule is applicable to the benefit described.

This SPD booklet contains several sections outlining specific information about:

  • Membership and Eligibility
  • Contributions
  • Credited Service
  • Loans
  • Leaving City Service
  • Service Retirement
  • Disability
  • Survivor Benefits
  • Taxation

Also included is a Glossary of Terms which defines terms that are used throughout the booklet.

ABOUT NYCERS

The New York City Employees’ Retirement System (NYCERS) was founded by the New York State Legislature in 1920 with 13,331 members. Today, NYCERS has grown into the largest municipal public employee retirement system in the United States with nearly 400,000 active members and retirees including civilian employees such as clerical workers, accountants and social workers, and uniformed employees such as New York City Correction Officers and Sanitation Workers.

NYCERS is a defined benefit retirement plan. Defined benefit retirement plans for public sector employees offer benefits which are defined in law. Generally, retirement allowances payable from such plans are based on a member’s years of service, age and compensation base. Other types of benefits such as loans, disability benefits and death benefits are also offered and specified in law. All benefits payable are funded by employee and employer contributions and from earnings on the invested assets of the system.

NYCERS is a cost-sharing, multiple-employer public employee retirement system. In addition to the City of New York (various agencies, boards and commissions), members are employed by public benefit corporations such as the NYC Transit Authority and the NYC Health and Hospitals Corporation. NYCERS performs many functions for active members and retirees alike. Among other things, each year NYCERS issues approximately 50,000 loans and processes thousands of refunds and buy-back applications. For retirees, NYCERS verifies retirement allowances, calculates Cost-of-Living Adjustments, and much more.

NYCERS is dedicated to a client-centered approach to quality service delivery. Whether it’s upgrading information technology infrastructure, facilitating access to information, developing customer service upgrades or instituting advanced security measures, NYCERS is committed to sustaining quality service delivery for all our members, retirees and beneficiaries.

NYCERS ONLINE

Anyone may use the public pages of our website at www.nycers.org to find forms and brochures, informational webinars, and financial reports. In addition, NYCERS members with a registered PIN have access to My NYCERS and its growing number of online tools to help them manage their account online in a safe and secure manner. With My NYCERS, members (and retirees) can log in and apply for or pay off a loan, change their address, view their Service Summary and more.

CONTACT INFORMATION

NYCERS members may contact the retirement system through various channels. Please refer to the four primary ways you may contact us on the following page.

MAILING ADDRESS

335 Adams Street, Suite 2300

Brooklyn, NY 11201-3724

CUSTOMER SERVICE CENTER

Mezzanine level at 340 Jay Street, downtown Brooklyn

Monday – Friday, 8 a.m. – 5 p.m.

CALL CENTER

Monday – Friday, 8 a.m. – 5 p.m.

(347) 643-3000 (Call Center)

(877) 669-2377 (If calling from outside the NYC area)

(347) 643-3501 TTY (hearing impaired)

MEMBERSHIP AND ELIGIBILITY

Membership in the Tier 6, 63/10 Plan is for any employee of the City of New York or a Participating Employer who joins NYCERS on or after April 1, 2012 except for:

  • Members of the Uniformed Force of the NYC Department of Correction
  • Members of the Uniformed Force of the NYC Department of Sanitation
  • Investigators employed in a District Attorney’s Office

LR: Chapter 414 of the Laws of 1983, as amended by Chapter 18 of the Laws of 2012

SR: RSSL §600

The Tier 6, 63/10 Plan allows participants to retire with an unreduced pension at age 63 with at least 10 years of Credited Service. Participants with 10 years of Credited Service may retire with a reduced pension earlier than age 63 but no earlier than age 55 (see the Early Service Retirement section on page 44).

Employees of the Triborough Bridge and Tunnel Authority (MTA Bridges and Tunnels) in the title of Bridge and Tunnel Maintainer, Assistant Bridge and Tunnel Maintainer, Senior Bridge and Tunnel Maintainer and Laborer are members of the 63/10 Plan if they join NYCERS at any time on or after April 1, 2012.

Employees in certain “special occupational” titles may be participants of a special plan available to their specific title and, therefore, may not be participants in the 63/10 Plan. However, such employees may retain the right to retire under the 63/10 Plan under certain scenarios. Such employees are encouraged to contact NYCERS to learn more about retiring under the special plan or the 63/10 Plan.

MANDATORY MEMBERSHIP VS. VOLUNTARY MEMBERSHIP

Membership in NYCERS is mandatory for all employees who are appointed and have completed six months in a permanent position in the competitive or labor class. Permanent employees may voluntarily join NYCERS during the first six months of employment. If they do not voluntarily join, membership will automatically be established after six months have lapsed.

Non-permanent employees are free to join NYCERS; they will not be forced in after six months. As long as such employees are on the payroll of their employer and file a membership application with NYCERS, membership can be established.

LR: Chapter 414 of the Laws of 1983; Chapter 929 of the Laws of 1937, as amended by Chapter 426 of the Laws of 1941

SR: RSSL §600 subdivision b; NYC Administrative Code §13-104, subdivision 1

SOCIAL SECURITY PARTICIPATION

Membership in NYCERS requires participation in the Social Security Program. Once an employee joins NYCERS, either through voluntary or mandatory membership, the employee must pay the 6.2% Federal Insurance Contributions Act (FICA) tax (reduced to 4.2% for 2011 and 2012). This tax, otherwise known as Social Security tax, is applied up to a maximum wage limit. The following table shows the maximum wage limits from 1937-2016.*

*Increases in subsequent years will be included in the SPD Update.

In addition, all employees since 1986 are required to pay 1.45% of earnings for the Medicare Program. Unlike the FICA tax, there is no maximum salary amount upon which Medicare deductions are based.

Windfall Elimination Provision

The Windfall Elimination Provision may reduce your Social Security benefits. You may be penalized by the Social Security Administration (SSA) if you are receiving a governmental pension based on years of service during which you did not pay the 6.20% FICA tax. You will likely be impacted if:

1. you were not a NYCERS member, but were employed in a position entitling you to NYCERS membership; and

2. you chose to contribute 7.50% or more of your wages to a Deferred Compensation Plan; and

3. you did not pay the 6.20% FICA tax during this time period; and

4. you subsequently joined NYCERS and applied to purchase (buy back) the years you worked and did not pay the 6.20% FICA tax.

If you have 30 or more years of “substantial earnings” in positions in which you paid the FICA tax, you will not be subject to the Windfall Elimination Provision penalties imposed by the SSA.

For more information on the Windfall Elimination Provision, visit www.socialsecurity.gov and download SSA Publication No. 05-10045.

DEFERRED COMPENSATION PLAN (DCP)

The New York City Deferred Compensation Plan (DCP), administered by the NYC Office of Labor Relations, is a defined contribution plan. DCP benefits are based on the cumulative value of employee contributions including the return on investments made with such contributions. Members of the DCP select how to invest their contributions, and benefits are paid out according to assets available in the individual member’s account.

Employees may concurrently join NYCERS and DCP. Those who are not mandated into NYCERS membership may join the DCP and not NYCERS. DCP members who contribute 7.50% or more of their wages to the DCP are not required to pay the 6.20% FICA tax. Keep in mind, however, that Social Security disability, survivor and retirement benefits are determined according to the amount and duration of your FICA contributions.

DCP members who subsequently join NYCERS are required to pay FICA tax even if they contribute at least 7.50% of wages to the Deferred Compensation Plan.

If you do not join NYCERS or the DCP, you will be required to pay all required FICA contributions after one month of employment.

CONTRIBUTIONS

The retirement benefits payable from NYCERS are derived from three primary sources:

  • Contributions made by the member
  • Contributions made by the employer
  • Return on the investments of the assets of the retirement system

Participants in the 63/10 Plan who join NYCERS between April 1, 2012 and March 31, 2013 are required to make Basic Member Contributions (BMCs) equal to 3% of gross wages until a new contribution structure takes effect on April 1, 2013. Beginning April 1, 2013, the BMCs rate for 63/10 Plan participants is dependent upon annual wages earned during a “plan year” according to the schedule in the table below.

Annual Wages Earned During Plan Year Contribution Rate
Up to $45,000 3%
$45,001 to $55,000 3.5%
$55,001 to $75,000 4.5%
$75,001 to $100,000 5.75%
Greater than $100,000 6%

A plan year is defined as a period of time from April 1st to March 31st. During the first three plan years of membership (or the first three plan years beginning April 1, 2013 if you joined NYCERS between 4/1/12 and 3/31/13) NYCERS will use a projection of your annual wages to determine your contribution rate (Projected Wage Method). For your fourth plan year and each plan year thereafter, NYCERS will use your gross wages earned two plan years prior to determine your contribution rate (Actual Wage Method).

See the chart on the next page for an illustration of the application of each method based on hypothetical wages.

Beginning in calendar year 2017, a plan year will be January 1 – December 31.

BMCs must be paid until you separate from City service or retire. They are Federal tax-deferred, meaning that you do not pay Federal taxes on the contributions, only New York State and local taxes. Note, however, that contributions made while on Union Leave are not Federal tax-deferred.

LR: Chapter 414 of the Laws of 1983, as amended by Chapter 18 of the Laws of 2012; and further amended by Chapter 510 of the Laws of 2015

SR: RSSL §613 subdivision a(1)

SR: See RSSL §613 subdivision d for Federal tax-deferred

NOTE: NYCERS’ pension benefits are taxable on the Federal level but are not taxable on the state and local level if you reside in New York City or New York State as a retiree. If you move to another state, your pension may be subject to taxation by that particular state and possibly the locality of the state in which you reside.

MEMBER CONTRIBUTION ACCUMULATION FUND

Basic Member Contributions are held in the Member Contribution Accumulation Fund (MCAF) and accrue interest at the rate of 5%, compounded annually. Since January 1, 1977, the interest rate has been fixed by law at a rate of 5% per annum, compounded annually.

LR: Chapter 890 of the Laws of 1976; Chapter 414 of the Laws of 1983

SR: RSSL §613 subdivision c

The accrual of interest on your contributions is of value in certain ways, but should not be equated with interest accrued in a savings account. A defined benefit retirement plan formula, prescribed by law, is used to calculate your pension. Interest has more of a direct impact in areas such as loans and refunds; the amount you can borrow is based on 75% of your MCAF, which is constantly growing because of interest, and refunds include interest earned

DEFICITS

Members are expected to make a specific amount of contributions based on their Tier and plan and their total years of service. The cumulative total of contributions that should be in your MCAF is known as your Required Amount. Anything short of your Required Amount constitutes a deficit. Members are required to resolve deficits in their MCAF. An unresolved deficit may lead to a reduction in your pension benefit or may lead to a delay in the processing of your retirement benefit. The latter can occur if the deficit exceeds 75% of the amount in your MCAF. Your retirement benefit would not be finalized until you pay an outstanding deficit to bring your MCAF to the minimum threshold. This percentage is important because a deficit equal to or less than 75% of the amount in your MCAF can be treated as an outstanding loan at retirement and a corresponding reduction of your retirement benefit can result.

Deficits occur for many reasons. NYCERS makes every effort to ensure that deficits do not occur. Identifying funding discrepancies sooner rather than later can provide a smoother transition to retirement. You too can play a role in identifying discrepancies. Members should always be aware of contributions deducted from their paychecks, particularly those who may transfer to another agency. On occasion, NYCERS is not notified in a timely manner of an agency-to-agency transfer. As a result, payroll deductions may be interrupted, which causes a deficit. If you are transferring to another agency, you or your new agency must notify NYCERS to ensure the continuation of payroll deductions.

CREDITED SERVICE

In NYCERS’ defined benefit structure, retirement benefits are calculated using three primary factors:

  1. The member’s age
  2. The member’s compensation base (Final Average Salary)
  3. The member’s Credited Service

The more Credited Service accumulated, the higher the retirement benefit. There are various ways for members to accumulate Credited Service. Below is a listing of the different types of Credited Service, followed by an explanation of each.

TYPES OF CREDITED SERVICE

  • Membership Service
  • Transferred Service
  • Purchased Service (Buy-Back)
  • Membership/Tier Reinstatement
  • Military Service
  • Union Leave Service
  • Part-time Service

MEMBERSHIP SERVICE

Membership Service is defined as paid full-time or part-time service rendered after joining NYCERS. For most 63/10 members, full-time service is credited based on a member’s regular work schedule in which he or she works 1,827 hours in a calendar year. The maximum number of hours that will be credited is 35 hours in any weekly pay period and 70 hours in any bi-weekly pay period. Members who are regularly scheduled to work more than 35 hours a week must work their regularly scheduled hours in order to receive full service credit. Members who are scheduled to work less than 1,827 hours in a calendar year will receive part-time service, which is prorated on the basis of one year of full-time service. Membership Service also includes Transferred Service and Military Service, which are discussed in more detail below. Membership Service can be used for eligibility purposes for certain benefits and can be used for calculating benefits.

LR: Chapter 749 of the Laws of 1992

SR: NYC Administrative Code §13-638.4

TRANSFERRED SERVICE

Transferred Service is service credited while a member of another public employee retirement system in New York City or New York State which has not been terminated and which is transferred to NYCERS.

Besides NYCERS, there are seven retirement systems in New York City and New York State. They are as follows:

  • New York City Teachers’ Retirement System (TRS)
  • New York City Police Pension Fund
  • New York City Fire Department Pension Fund
  • New York City Board of Education Retirement System (BERS)
  • New York State & Local Employees’ Retirement System
  • New York State & Local Police & Fire Retirement System
  • New York State Teachers’ Retirement System

LR: Chapter 687 of the Laws of 1955

SR: RSSL §43

PURCHASED SERVICE (BUY-BACK)

Purchased Service, commonly referred to as buy-back, is previous full-time or part-time public service rendered in the employ of a public entity anywhere in New York State that has been fully paid for and credited. Previous service will be credited to members who have rendered at least two years of Membership Service.

Generally, in order to purchase previous service, members must have been on the payroll of a public entity (not a private entity) in a position which would have allowed membership in a public employee retirement system in New York City or New York State. One benefit of purchasing previous service is the inclusion of such service as part of your Credited Service, which ultimately will enhance your retirement benefit. Purchasing service does not change your membership date.

LR: Chapter 414 of the Laws of 1983, as amended by Chapter 552 of the Laws of 2000

SR: RSSL §609 subdivision b(1)

Application Process & Cost

In order to purchase previous service, you must complete an Application (Form #241 from you; Form #242 from your employer) and file it with NYCERS while you are on active payroll. You may also apply online provided that you are a MY NYCERS accountholder. If you separate from City service, you are generally not allowed to initiate a new claim to purchase previous service unless you are purchasing service to reach the 10-year threshold for vesting or disability.

Once your paper application or online application is filed, NYCERS must verify your previous service and salary earned. In most cases, NYCERS has adequate pay records or is able to request them from most employers to process your buyback application. Verifying the salary earned is essential to calculating the cost. The cost is 6% of the wages earned during the period(s) you are buying back, plus 5% interest compounded annually. Since those monies would have generated interest at a rate of 5%, the cost also includes interest.

LR: Chapter 18 of the Laws of 2012

SR: RSSL §609 subdivision b(1)

COST

Once the cost is calculated, NYCERS will send a cost letter containing a few payment options:

  • A lump-sum payment of the entire amount
  • A partial lump-sum payment and the balance paid through payroll deductions
  • Payment of the entire amount through payroll deductions
  • A direct rollover of funds from a Deferred Compensation Plan or Individual Retirement Account (IRA) listed below (if allowed by your plan administrator). You will need to send a copy of the cost letter you receive from NYCERS to the administrator of your Deferred Compensation Plan or IRA at least 15 days before the payment is due at NYCERS. Funds will be transferred directly to NYCERS as a payment for your previous service.
  • 457 Deferred Compensation Plan
  • 403(b) Deferred Compensation Plan
  • 401(a) or 401(k) Qualified Defined Benefit or Contribution Plan
  • 408(a) or 408(b) Individual Retirement Account
  • 403(a) Annuity Plan

My NYCERS accountholders can pay for their buy-back online.

If you receive your cost letter and fail to send payment by the time referenced in the letter, NYCERS will automatically begin payroll deductions. Should you wish to cancel your application, you must file Form #238 prior to the date payroll deductions are scheduled to begin. If payroll deductions have begun, you may cancel such deductions by filing Form #239. You will receive credit for service you purchased up to the effective cancellation date. If payroll deductions have begun and you wish to pay off the entire outstanding balance in a lump sum, you may file Form #240 and a payoff amount will be calculated and sent to you. If you wish to adjust the payroll deductions, you may do so by filing Form #237, but only once in any 12-month period. Refund of monies paid for buy-back is prohibited.

NOTE: Transfers from Inherited IRAs, Roth IRAs, and Inherited Roth IRAs are not permitted.

City Employees: Contact the New York City Deferred Compensation Plan at 212-306-7760 or visit their website at www.nyc.gov/deferredcomp. City employees may roll over funds from a 457 Plan, a 401(k) plan, or a NYCE IRA.

CUNY Employees: Participants in the NYS 457 program should call 518-203-9919. Participants in the MetLife 403(b) program should call 914-345-8233.

Health and Hospital Employees (HHC): Contact Prudential Retirement Services at 855-444-2832 for more information.

Metropolitan Transportation Authority Employees (MTA), including TBTA and TA: Contact Prudential Retirement Services at 877-756-4682 for more information.

TIAA CREF Participants: Contact TIAA CREF at 800-842-2776 for more information.

Please make sure that the banking institution that transmits your funds to NYCERS writes the correct Deferred Compensation Plan or IRA on the check and any correspondence it sends.

Generally, members are not permitted to purchase previous service for time spent off payroll. An exception to this general rule applies to MTA Bridges and Tunnels employees in the titles of Bridge and Tunnel Officer, Sergeant or Lieutenant in a non-managerial position, Bridge and Tunnel Maintainer, Assistant Bridge and Tunnel Maintainer, Senior Bridge and Tunnel Maintainer and Laborer, or NYC Transit Authority members in operating titles, who are off payroll and receiving a Workers’ Compensation Benefit.

LR: Chapter 300 of the Laws of 1998 [TBTA & NYCTA], as amended by Chapter 366 of the Laws of 1999; Chapter 18 of the Laws of 2012 [cost increase to 6%]

SR: RSSL §609 subdivision a(4)

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.

LR: Chapter 646 of the Laws of 1999, as amended by Chapter 18 of the Laws of 2012

SR: RSSL §645

MILITARY SERVICE

Federal and state laws allow members to purchase service credit for time spent in one of the military branches of the Armed Forces of the U.S.A. — the Uniformed Services Employment and Reemployment Rights Act (USERRA) and Article 20 of the Retirement and Social Security Law, respectively. Each law has different provisions governing the eligibility criteria to purchase military service. A member is entitled to receive credit for Military Service under the law that provides him or her with the greatest benefit

In all cases, military service must have been satisfactorily completed and a discharge under honorable circumstances received. A DD214 form is the most common proof of satisfactory military service. However, other acceptable documents of military service include a Public Health Service (PHS) Certificate (PHS 2893; PHS 1867) or a certificate from the military issued pursuant to Presidential Executive Order 11519 during the United States Post Office work stoppage.

The Uniformed Services Employment and Reemployment Rights Act (USERRA)

USERRA affords members/employees all of the rights, benefits and privileges that they would have enjoyed had they never left their City position for military service.

Members employed by the City of New York who are activated to military service in one of the military branches of the U.S. armed forces may apply to receive service credit for the period of time spent on military duty, including any training rendered during City employment. Individuals so activated need not have been NYCERS members at the time of activation.

Members/employees are required to apply to return to a City position within 14 days after termination of military duty if their military service lasted between 31 and 180 days. If their military service lasted more than 180 days, such members are required to apply to return to a City position within 90 days after termination of military duty. Some agencies allow employees to return for reemployment in a timeframe greater than what is allowed under USERRA.

There is no time limit for purchasing military service under USERRA. The right to purchase such service does not terminate when membership terminates.

Cost

In general, members purchasing military service under USERRA are entitled to the rights, benefits and privileges they would have been entitled to had they never left their City position for military service. Therefore, the cost to purchase military service is the equivalent of the contributions required of the member had he or she never left for military service.

Regarding charging interest on contributions due, USERRA states: “No such payment may exceed the amount the person would have been permitted or required to contribute had the person remained continuously employed by the employer throughout the period of service…” Therefore, no interest shall be included in any costs charged to the member.

Any payments made by the member via payroll deductions shall be made during the period beginning with the date of reemployment. The repayment duration is three times the period of the person’s service in the military, not to exceed five years.

Under USERRA, the maximum service credit allowed for voluntary military service is five years(not including any time purchased under Article 20 of the RSSL, explained further below). No cap on service is applied if the military service is mandatory (e.g., draft, redeployment).

Article 20 of the Retirement and Social Security Law

Under Article 20 of the Retirement and Social Security Law (RSSL), members (not retirees or vestees) are eligible to purchase military service rendered in specified periods of war and conflict. To be purchasable, the military service must have been rendered during one of the following periods of war:

  • World War II (12/07/41 – 12/31/46)
  • Korean War (06/27/50 – 01/31/55)
  • Vietnam Era (02/28/61 – 05/07/75)

NOTE: The entire period of active duty in the above wars did not have to be during the periods shown in the parentheses above. If at least part of the active military service was rendered during the dates shown in the parentheses, the member will be eligible to purchase credit for their entire period of active service, up to a maximum of three years. For example, a member who served in Vietnam from August 28, 1959 through August 27, 1962 will be eligible to purchase the full three years of military service credit, even though 1½ years of the active duty service was rendered prior to the dates shown for the Vietnam Era.

OR

During one of the following military conflicts:

  • Lebanon* (06/01/83 – 12/01/87)
  • Grenada* (10/23/83 –11/21/83)
  • Panama* (12/20/89 – 01/31/90)

*As established by receipt of the armed forces expeditionary medal, the Navy expeditionary medal or the Marine Corps expeditionary medal or any other medals or certain ribbons.

OR

During hostilities participated in by the military forces of the United States in the theatre of operations in the following locations or the airspace above such locations:

Iraq, Kuwait, Saudi Arabia, Bahrain, Qatar, United Arab Emirates, Oman, Gulf of Aden, Gulf of Oman, Persian Gulf (Arabian Gulf), Red Sea, and the airspace above these locations (08/02/90 to the end of such hostilities)

No military time rendered in the wars or conflicts specified above will be purchasable unless the member has at least five years of Credited Service in NYCERS (not including any prior military service) at the time of making application for the purchase.

The maximum service credit allowed under Article 20 of the RSSL is three years (including military service purchased while a member of another public retirement system in New York City or State, but not including any military service purchased under USERRA).

Cost

The cost to purchase military service will be:

  • the number of years of military service being purchased, times
  • 6%, times
  • the member’s salary earned during the 12-month period prior to the date of application for purchase of military service.

LR: Chapter 548 of the Laws of 2000, as amended by Chapter 18 of the Laws of 2012 SR: RSSL §1000

If a member is paying via payroll deductions and retires prior to the completion of payments, he or she must either pay the balance due in a lump sum (prior to the selection of a final retirement option) or he or she will only receive military service proportional to the amount paid before retirement.

LR: Chapter 469 of the Laws of 1991

SR: NYS Military Law §243-b

Refunds

In the event military service purchased under Article 20 of the RSSL does not increase a member’s retirement allowance or death benefit, any payments made toward such purchase shall be refunded by NYCERS, with interest.

For In-Service Survivor Benefits, a refund (plus interest) is issued if:

  • The member dies in service, and
  • The member purchased military service under RSSL Article 20, and
  • The military service purchased does not produce a greater death benefit than that which would have been payable had the member not purchased such service.

For Retirees, a refund (plus interest) is issued if:

  • The retiree purchased military service under Article 20 of the RSSL while a member, and
  • The military service purchased does not produce a greater retirement allowance than the allowance that would have been payable had the member not purchased such service

LR: Chapter 547 of the Laws of 2002

SR: RSSL §1000 subdivision 9

UNION LEAVE SERVICE

A member may be granted Credited Service for an authorized leave of absence without pay to conduct labor relations activity on behalf of a public employee union, if the employer adopts a resolution and files an election with NYCERS to offer this credit and NYCERS receives an annual certification that the member is indeed performing union leave activities. This service may be either on a part-time or a full-time basis.

A member must pay his or her Basic Member Contributions for time spent on union leave. On an annual basis, NYCERS sends a letter to each member on union leave detailing the contributions required.

PART-TIME SERVICE

City service rendered by an employee who is regularly scheduled to work 1,827 hours in a calendar year is considered full-time service. The maximum number of hours that will be credited is 35 hours in any weekly pay period and 70 hours in any bi-weekly pay period. Partial service rendered in a calendar year by a full-time employee will be prorated based on 1,827 hours.

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 fulltime service — 1,827 hours worked in a calendar year.

LR: Chapter 749 of the Laws of 1992

SR: NYC Administrative Code §13-638.4; RSSL §609 subdivision a

Dual Employment Service

Dual Employment refers to concurrent employment in two or more NYCERS-eligible positions in City service. Such positions may be either full-time or part-time.

Members who concurrently hold two or more NYCERS-eligible positions are required to make member contributions based on wages earned from such positions. In return, members who meet certain eligibility requirements may receive retirement benefits based on such Dual Employment.

A member may earn service credit from two or more concurrently held NYCERS-eligible part-time positions. However, a member may not earn a greater amount of service credit in any period of time than he or she could have earned during that same period from one NYCERS-eligible full-time position.

The earnings from two or more concurrently held NYCERS-eligible part-time positions may be combined for the purpose of calculating the compensation base to be used in computing benefits. This combined compensation cannot exceed the amount of compensation that could have been earned from one full-time position during that period.

The earnings from one NYCERS-eligible full-time position may be combined with the earnings from a concurrently held NYCERS-eligible part-time position for the purpose of calculating the compensation base to be used in computing benefits.

Combining earnings is only possible where a member has held either two or more NYCERS-eligible part-time positions in City service or a NYCERS-eligible full-time position and a NYCERS-eligible part-time position concurrently for a total of at least nine months in each of 10 consecutive years.

Under certain circumstances, a retiree may receive a post-retirement refund of member contributions attributable to a Dual Employment position. This occurs where the retiree did not receive service credit for that position, and the earnings from that position did not figure into the computation of his or her retirement benefit.

LR: Chapter 749 of the Laws of 1992

SR: NYC Administrative Code §13-638.4 subdivision f d

LOANS

ELIGIBILITY

As a Tier 6, 63/10 Plan member, you are qualified to take a loan if you:

  • Have completed one year of NYCERS membership, and
  • Have a minimum of $1,334 in your Member Contribution Accumulation Fund (MCAF), and
  • Are in active payroll status, and
  • Are not in default on a current loan from NYCERS, and
  • Are not retired.

NOTE: NYCERS must have your birthdate on file before processing a loan.

BORROWING

A loan cannot exceed 75% of the contributions, with interest, last posted to your MCAF account. You may not borrow less than $1,000, and you can obtain only one loan in any 12-month period. The restriction to one loan in any 12-month period is by law and NYCERS is not permitted to make exceptions, even in the event of an emergency you may experience.

LR: Chapter 920 of the Laws of 1990

SR: RSSL §613-b subdivision b

APPLYING AND GETTING THE MONEY

Applying Online

Tier 6, 63/10 Plan members with a My NYCERS account and a registered Personal Identification Number (PIN) can apply for a loan online. This online tool provides an efficient and resourceful way to apply for a loan. It allows members to explore different loan options before settling on a loan amount and choosing which repayment option best fits their needs. This tool is particularly helpful for members with outstanding loans, since tax laws create a greater likelihood that all or part of your new loan will be taxable. By applying online, members will be presented with taxable and/or tax-free options to choose from and can weigh each option carefully. In addition, current procedures require members to sign a tax authorization letter before a taxable loan can be processed. By applying online, members selecting a taxable loan option can fulfill this requirement by electronic signature at the end of the online application.

Applying by Mail or In Person

An original (neither a copy nor a fax) Loan Application (Form #302) can be mailed or dropped off in person at our Customer Service Center. If your loan is taxable, a trip to our Customer Service Center will save you time, as you can sign the tax authorization letter immediately after filing your application. If you apply by mail and your loan is taxable, a tax authorization letter will be mailed to you.

Getting the Money

Members will usually receive a new loan within 15 business days after receipt of their paper loan application, and within 10 business days after filing online. Members have the option of receiving their loan by mail (paper check) or deposited directly into their bank checking or savings account through direct deposit (Electronic Funds Transfer, or EFT). Online loans using EFT are paid within 3 business days.

We recommend EFT because:
  • It is SAFE – eliminates the risk of your loan check being lost or stolen
  • It is FAST – no waiting for the check to clear your bank – the funds are immediately available
  • It is EASY – no more trips to the bank – no more waiting in line to deposit the check

JOIN THE THOUSANDS OF NYCERS MEMBERS AND PENSIONERS WHO SELECTED EFT FOR THE DEPOSIT OF THEIR LOAN OR PENSION FUNDS. THEY OVERWHELMINGLY CONFIRM THAT EFT IS EASY, RELIABLE AND SAFE.

REPAYMENT

When you apply for a loan, you agree to repay your loan through payroll deductions while on active City payroll. If you leave City service without retiring or are off payroll for another reason, you are still responsible for payments due on your loan. Failure to make your payments in a timely manner may result in your loan being declared a “Non-Performing Loan.” If this occurs, not only are you still responsible for paying off your outstanding loan, but your loan will be subject to Federal taxation and may be subject to early distribution penalty charges imposed by the Internal Revenue Service (IRS).

You may choose to pay off the full amount of your outstanding loan in a lump sum at any time (no partial lump-sum payments are permitted, except at retirement before you are finalized). Determining your pay-off amount is simple! Just visit our website and locate “Pay-off Figure” under “Your Loan Activity” on your My NYCERS page (this feature is only available to My NYCERS accountholders with a registered PIN). In addition, My NYCERS accountholders with a registered PIN may pay online using E-payments. Payment can be made by a credit or debit card, or by e-check (electronic debit of your checking or savings account).

Note: The current interest rate is 6.2% (6% basic interest rate plus 0.2% mandatory loan insurance premium; for loans taken prior to July 1, 2015, the mandatory insurance rate was 0.3%).

LR: Chapter 920 of the Laws of 1990, as amended by Chapter 3 of the Laws of 2013

SR: RSSL §613-b subdivisions d and f

While repaying your loan by payroll deductions, you must pay at least 2% of your gross salary per pay period, and the payments must be sufficient to repay the amount borrowed plus interest within five years. Deductions for repayment of your loan should begin in the first or second pay period after your loan application has been processed. If loan payments are not deducted from your paycheck following the second pay period after your loan has been processed, notify NYCERS immediately. Interest will continue to accrue on your outstanding balance.

LR: Chapter 920 of the Laws of 1990

SR: RSSL §613-b subdivision c

If you wish to change the amount of your repayment, you may elect one of the following two options:

  • File a “Change of Repayment Form” (Form #309): You may change the amount of your repayment only once in any 12-month period at a one-time service fee of $30.00 (money order only).
  • Renegotiate your loan: When you are eligible for another loan you may change your loan repayment schedule by borrowing additional amounts and changing the repayment schedule based on the new consolidated loan. Be forewarned, however, that a renegotiated loan may have tax consequences.

All loans (except Non-Performing Loans) are fully insured against the death of a member 30 days after being issued.

FEES

By law, NYCERS is authorized to assess a service fee for processing each loan, which is used for the administration of loans for 63/10 Plan members. As of December 1, 2013, the service fee is $30.00. This fee is automatically deducted from the loan check.

LR: Chapter 920 of the Laws of 1990

SR: RSSL §613-b subdivision e

There is a loan insurance premium of 0.2% in addition to the 6% interest rate. For loans taken prior to July 1, 2015, the insurance rate was 0.3%. Loan insurance is mandatory and you may not elect to waive the premium.

LR: Chapter 920 of the Laws of 1990, as amended by Chapter 3 of the Laws of 2013

SR: RSSL §613-b subdivision f

There is a $30.00 service fee when filing Form #309 for a Change of Repayment. If you are no longer on payroll, contact NYCERS to switch to direct payment; however, there is a $5.00 per-payment fee for each direct payment.

NOTE: If you are on union leave, you must repay your loan by direct payment, but the $5 per-payment fee is waived.

There is a $20.00 service fee for personal checks that are returned uncollected.

CONSEQUENCES OF NON-PAYMENT

If you fail to make a payment on an outstanding loan for more than 90 days for any reason, the loan is in default — it is a Non-Performing Loan. This means that:

  • You will not be eligible to take out another loan until you have paid the outstanding balance of your Non-Performing Loan in full.
  • Your Non-Performing Loan will be taxable for Federal income tax purposes as a taxable distribution. There is an additional 10% early distribution tax penalty for members who are under age 59½.
  • Your Non-Performing Loan will no longer be insured against your death and if a beneficiary is due to receive a benefit, the amount of that benefit will be reduced by the amount of the outstanding loan.

SPECIAL NOTE FOR MEMBERS WHO TRANSFERRED BETWEEN CITY AGENCIES

If you transferred between City agencies and there have been no deductions in your paycheck for loan repayments since the transfer, contact NYCERS to arrange to make payments. If you do not, compound interest will continue to accrue on the loan and it may be classified as a Non-Performing Loan.

LEAVING CITY SERVICE

You must continue to make loan payments even if you have vested (meaning you left City service but are not yet eligible to collect your retirement benefit). If you don’t, your loan will go into default and be subject to Federal taxation, and early distribution penalty charges will be imposed by the IRS (if applicable). In addition, interest will continue to accrue on the outstanding loan balance, perhaps even to the extent that it will significantly reduce any future retirement benefit you are entitled to.

To repay a loan after you leave the City payroll, you may elect to either:

  • Pay off your entire loan at any time. My NYCERS accountholders with a registered PIN can view their “Pay-off Figure” under “Your Loan Activity” on their My NYCERS webpage and pay the outstanding loan balance through E-payments. For all others, visit NYCERS or write to ask for a repayment amount and date (make sure you include your member number, last 4 digits of your Social Security Number, current address and your signature). Lump-sum repayment can be made by bank check or money order;
  • or
  • Make direct monthly repayments. Notify NYCERS if you want to repay directly. There is a $5 per-payment fee charged for each direct payment you make.

LOAN AT RETIREMENT

If eligible, you may take a loan at or near retirement. This type of loan will not be issued until after your retirement date as NYCERS completes a review of your account. It may take up to one month to complete the review and issue your loan check.

A loan taken at the time of retirement or a previous loan that is still outstanding will permanently reduce your retirement benefit. The amount of the reduction in your benefit depends on your age at retirement and the size of the loan. For Non-Performing Loans, since interest continues to accrue up to the retirement date, the outstanding balance may increase to such a sizeable amount as to significantly decrease the retirement benefit that may be otherwise payable.

The table below illustrates the benefit reduction in dollars for every $1,000.00 of an outstanding loan for some sample ages (based on a table of factors for 2016 retirements):

Age Payment Begins Reduction Per $1000 (Range)
55 $60.76
57 $63.22
63 $72.54
65 $76.47

As of August 16, 2005, retirees are permitted to repay the total amount of the outstanding loan at any time after retirement.

By doing that, you will increase your monthly pension checks prospectively only. Upon repayment of the loan in full, your benefit will revert to what it would have been had it never been reduced by the actuarial equivalent of your outstanding loan.

LR: Chapter 511 of the Laws of 2005

SR: RSSL §613-b subdivision i

TAXABLE LOAN

Active Members

The taxability of your loan is determined by the amount being borrowed and/or the length of the period it is being repaid. If subject to tax, you will be provided with a tax authorization letter (online applicants are provided with a taxable option), as the taxable portion of the loan is treated as ordinary income for Federal income tax purposes. In addition, members under the age of 59½ will incur a 10% early distribution penalty tax assessed by the IRS. Tier 6, 63/10 loans are subject to taxation if the total outstanding loan is both:

  • Greater than $10,000 and
  • More than 50% of the member’s non-forfeitable accrued vested benefit (the present value of your Vested Retirement Benefit).

When borrowing results in a consolidated loan amount over $50,000, the excess over $50,000 is subject to Federal income tax.

Active Members with an Outstanding Loan

If you have an outstanding loan and decide to apply for a new loan, you could incur a taxable event. NYCERS will offer you three methods to renegotiate your loan to help you make an informed decision about the tax consequences associated with the loan. Each method may contain taxable and/or tax-free options.

If you apply for the new loan online, you will be presented with taxable and/or tax-free options to choose from. If you apply for the new loan by filing Form #302 by mail or in person, you will be provided with a tax authorization letter that will outline the three methods and taxable and/or tax-free options. You must select how you want the loan to be distributed before your loan application can be processed. If you apply online via My NYCERS, you make your selection during the completion of the online application. If you apply in person at NYCERS, you make your selection during the very same visit. If you apply by mail, you must return the tax authorization letter indicating your selection to NYCERS.

THREE METHODS

1. 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 from the date of your refinanced loan) will be implemented. This method may result in the highest tax consequence.

2. Original Terms

You have an outstanding 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; however, the consolidated amount will be paid within the original repayment schedule (not to exceed 5 years from the date of your original loan).

3. New Loan

You have an outstanding loan. If you repay the outstanding loan balance you will be eligible to apply for a new loan with a new repayment schedule of 5 years.

TAXES AT RETIREMENT

IRS regulations require NYCERS to treat pension loans as a retirement distribution if they are taken at or near the time of retirement. In addition, an outstanding loan balance at retirement will trigger a Federal income tax liability if the amount you received is considered taxable money. However, you may roll over the taxable portion to a Traditional IRA, Roth IRA or Employer Plan. In the event you choose not to roll over the taxable amount, NYCERS is required to deduct 20% Federal withholding tax before issuing the check (or disbursing via EFT). 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 make sure that the institution you name will be able to receive this direct rollover from NYCERS.

The taxable portion of any outstanding 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 60 days from the date of that letter to roll over the taxable portion to your Traditional IRA, Roth IRA or Employer Plan.

LEAVING CITY SERVICE

REFUNDS

Tier 6, 63/10 Plan members who resign or separate from City service with less than 10 years of Credited Service may apply for a refund of the Basic Member Contributions (BMCs) held in their Member Contribution Accumulation Fund (MCAF) account inclusive of interest accrued. In taking a refund, however, members terminate their membership and forfeit their right to any future benefits from NYCERS.

Members with 10 or more years of Credited Service are not eligible for a refund of their BMCs and interest in the MCAF.

You must be off payroll for thirty (30) or more days to qualify for a refund.

LR: Chapter 389 of the Laws of 1998, as amended by Chapter 18 of the Laws of 2012

SR: RSSL §613 subdivision c

Tier 6, 63/10 Plan members who resign or separate from City service with less than 10 years of Credited Service and do not return to City service within a five-year period will have their membership terminated by operation of law even if they have not applied for a refund of their BMCs. A membership terminated in such fashion is commonly referred to as a “five-year out.” A five-year out can also occur if the time out of City service aggregates more than five years in any ten-consecutive-years period. Such members may apply to receive a refund of their BMCs, inclusive of interest earned up to five years after resignation or termination of covered employment.

Termination of Membership

LR: Chapter 929 of the Laws of 1937; Chapter 550 of the Laws of 1938, as amended by Chapter 18 of the Laws of 2012

SR: NYC Administrative Code §13-146

Refund

LR: Chapter 470 of the Laws of 1989

SR: RSSL §613 subdivision c

VESTING

Vesting refers to your right to receive retirement benefits, even if you terminate employment before you are eligible for payment of a Service Retirement Benefit.

ELIGIBILITY AND PAYABILITY DATE

You can vest in the 63/10 Plan if you have at least 10 years of Credited Service, at least two years of which are Membership Service, before you have separated from City service. Upon reaching the age of 63, you are able to collect a Vested Retirement Benefit. The Vested Retirement Benefit is computed in the same manner as the Service Retirement Benefit (see page 44). The date on which you reach age 63 is commonly referred to as your Payability Date.

LR: Chapter 18 of the Laws of 2012

SR: RSSL §612 subdivision a

FILING REQUIREMENTS

If you have at least 10 years of Credited Service, your pension vests automatically and filing paperwork with NYCERS at the time of separation from City service is not required. However, NYCERS encourages members who separate from City service to file a Notice of Intention to File for a Tier 6 Vested Retirement Benefit Form (Form #254). By doing so, NYCERS can send you important information regarding your vested membership. For example, in addition to receiving an Annual Disclosure Statement, you will receive a Retirement Account Summary detailing your account balances, deficit and/or outstanding loan amounts (where applicable) and your total years of service. Additionally, NYCERS will send you an Application for Payment of a Vested Retirement Benefit (Form #266) approximately 90 days prior to your Payability Date. Filing Form #266 is required in order to begin collecting your Vested Retirement Benefit.

PURCHASING SERVICE CREDIT

As an active member (on active payroll) you are eligible to purchase service credit for previous public service rendered in New York City or New York State (see Buy-Back on page 17). Once you separate from City service, however, you may purchase previous service only if you have at least two years of Membership Service with NYCERS, and you may purchase only enough credit to reach the minimum service required to vest or to apply for ordinary disability, which is ten years.

In addition, if payroll deductions for the purchase of previous service were not completed at the time you separated from City service, you can pay off the balance in a lump sum and receive credit for the service as long as you have completed the purchase prior to making a final option election at retirement (which occurs after your Payability Date has passed). If you decide to wait until you get closer to your Payability Date to complete the purchase, you should know that the payoff amount continues to grow as interest continues to accrue on the unpaid balance. If you choose not to pay off the balance, you will receive credit for the time you purchased up to your separation date. If you applied to purchase service after leaving City service, you must pay for such service in a lump sum. Processing of your vested or disability application will not begin until you pay for the service in full.

DEATH BENEFITS FOR VESTED MEMBERS

If you die prior to your Payability Date, and at a time and in a manner which did not result in payment of an Ordinary Death Benefit to your beneficiary(ies), a lump-sum death benefit will be paid to the beneficiary(ies) you last designated if you have 10 or more years of Credited Service. The death benefit amount is based on 50% of the death benefit that would have been payable if you had died on your last day in active service plus the return of the contributions in your MCAF, plus interest. If you did not render 10 or more years of Credited Service, only the return of the contributionsin your MCAF, plusinterest, will be payable to your beneficiary(ies).

LR: Chapter 388 of the Laws of 1998

SR: RSSL §606-a

HEALTH INSURANCE FOR VESTED MEMBERS

NYCERS does not administer health benefits for employees of NYC mayoral agencies or for employees of any of the Participating Employers of NYCERS. It is strongly recommended that you visit your agency’s personnel office to find out how you can continue your health benefit coverage into retirement.

TRANSFERS

TO ANOTHER NYC OR NYS PUBLIC RETIREMENT SYSTEM

There are eight public employee retirement systems in New York State. NYCERS is one of the eight. If you accept another position with the City or State of New York (or any of its political subdivisions) that entitles you to membership in another City or State retirement system, you may be eligible to transfer your NYCERS membership to that system. If you wish to transfer, you must do so before you withdraw your Basic Member Contributions, or before your membership is terminated by operation of law as mentioned in the “Refunds” subsection. In order to transfer to another system, you must file a form (Form #321) with NYCERS. You must file the transfer form within one year from the date you separate from City service.

FROM ANOTHER NYC OR NYS PUBLIC RETIREMENT SYSTEM

If prior to becoming a member of NYCERS you were a member of any other retirement system in New York City or New York State, and that membership has not been terminated, you may be eligible to transfer that membership to NYCERS. You should discuss this matter with a NYCERS representative and a representative from your prior retirement system to determine your eligibility. If you are eligible to transfer a prior membership to NYCERS, you will have to start the process with your prior retirement system.

LR: Chapter 687 of the Laws of 1955

SR: RSSL §43

TRANSFERRED CONTRIBUTORS

If you resign from all positions that entitle you to membership in NYCERS, and you accept another position in City service that entitles you to membership in BERS or TRS, but not NYCERS, you may elect to remain a member of NYCERS as a Transferred Contributor in lieu of transferring your membership, provided you:

  • Accept the other position within 60 days of resigning from your current NYCERS-eligible position; and
  • Do not withdraw your Basic Member Contributions; and
  • Do not become a member of the other retirement system; and
  • File an affidavit with NYCERS; and
  • Inform the other retirement system of your decision

Your Transferred Contributor status becomes effective as soon as you submit the proper forms to NYCERS, including a completed, irrevocable Transferred Contributor Affidavit. As a Transferred Contributor, you continue to contribute a percentage of your pay (if applicable) and to accrue benefits with NYCERS.

LR: Chapter 685 of the Laws of 1964 subdivision a; Chapter 570 of the Laws of 2005 subdivision b

SR: NYC Administrative Code §13-188

NOTE: Before making a decision, you should discuss your situation with representatives of both retirement systems. This is important because your rights and benefits with the new system may not be the same as those you have with NYCERS.

POLICE OFFICERS AND FIREFIGHTERS

If you wish to transfer your NYCERS membership to the NYC Police Pension Fund or the NYC Fire Department Pension Fund, you must apply to NYCERS for a transfer within one year from the date of your appointment as a City uniformed police officer or firefighter.

POLICE

LR: Chapter 625 of the Laws of 1947

SR: NYC Administrative Code §13-143

FIRE

LR: Chapter 738 of the Laws of 1948

SR: NYC Administrative Code §13-144

TERMINATING MEMBERSHIP

A NYCERS membership can be terminated in one of the following ways:

  • A member with less than ten years of Credited Service may request a refund of his or her Basic Member Contributions after separating from City service; OR
  • A membership is automatically terminated if a member has less than five years of Credited Service and five years have passed since his or her separation from City service — with or without the member formally requesting a refund; OR
  • The member retires and is assigned a pension number; OR
  • The member transfers his or her membership to another NYC or NYS public employee retirement system; OR
  • The member dies.

LR: Chapter 929 of the Laws of 1937; Chapter 550 of the Laws of 1938

SR: NYC Administrative Code §13-146

THE SERVICE RETIREMENT PROCESS

FILING AN APPLICATION

Tier 6 members in the 63/10 Plan who are on active payroll and meet all eligibility requirements may file a service retirement application (Form #521) no earlier than 90 days before, and no later than one day before, their effective retirement date.

Before filing an application with NYCERS, it is strongly recommended that you coordinate with your employer to determine if you are entitled to payment of any accumulated annual leave. Coordinating with your employer is essential to determining your last day paid, which is necessary to determine your correct retirement date.

Getting your retirement date correct is imperative. If your retirement application is processed with the wrong retirement date there can be negative consequences. For example, unused leave time may be paid in a lump sum (generally, managers) or through paychecks (generally, non-managers). For non-managers, if you are being paid for unused leave time through paychecks you are still considered an active employee. Your retirement date should be the day after the last day you are paid by your agency. If you select a retirement date prior to your last day paid you will not receive service credit following your retirement date. Moreover, any salary after your retirement date will be subject to post-retirement earnings limitations (see page 41).

If it is important to you to receive your first pension check as soon as possible, you should meet with your employer to determine your last day of work so that you can select a retirement date that falls on the first or the second day of the month. Your retirement date will dictate when you receive your first “advance payment,” which is a temporary partial pension payment until such time as NYCERS can finalize your pension.

For example:

RETIREMENT DATE = JANUARY 2 -> FIRST ADVANCE PAYMENT = JANUARY 31

RETIREMENT DATE = JANUARY 3 FIRST -> ADVANCE PAYMENT = FEBRUARY 28 OR LATER IN THE MONTH 

NOTE: No advance pension payment will be sent to you until NYCERS has a copy of your birth certificate or other acceptable proof of birth date on file. In addition, your pension will be paid in monthly installments. The law does not permit payment of your pension in a lump sum.

PROCESSING THE APPLICATION

Once your application is filed, NYCERS checks your file for service and salary records, calculations are made and data is entered into our records.

Requests for missing information are made of your agency and/or you when necessary. Finalizing your pension depends on completion of this process and your selection of a retirement option and may take additional time depending on the volume of retirement applications received at the time you file.

Temporary Option Election

All members are strongly encouraged to elect a “Temporary Option” on their retirement application. This precautionary measure enables you to leave some form of pension payment to a beneficiary should you die before a permanent option election is made and your pension is finalized (the “Interim Period”). You may choose to be temporarily covered by Option 1 (100% Joint-and-Survivor) or Option 4 (Ten-Year Certain) on the retirement application. Please see the “Retirement Options” subsection of this section for more information on other temporary options available. Electing a Temporary Option protects you and whomever you designate as your beneficiary during the Interim Period. If you do not elect a Temporary Option and you die during the Interim Period, it is assumed that you elected the Maximum Retirement Allowance and your pension will not continue upon your death.

Permanent Option Election

Once your file is thoroughly reviewed and checked for any missing information, a computation of your retirement benefit under various options available to you is done. A final option package is then sent to you containing the appropriate option forms and informational brochures. Here is some important information you should know:

  • You will have 60 days from the date on the final option package in which to choose a final option.
  • If you do not choose an option in that 60-day period, your retirement benefit will be processed under the Temporary Option you elected on your retirement application. If no Temporary Option was elected by you on your retirement application and you do not file an option selection in the 60-day period, you will receive the Maximum Retirement Allowance — the maximum benefit available to you without optional modification, with all payments ceasing upon your death.
Finalizing Your Pension

After you have elected an option (or after the Temporary Option or Maximum Retirement Allowance has been elected for you because you did not elect an option), you are placed on the pension payroll for the full amount of your benefit. This will include retroactive amounts for the difference between your advance payment and finalized pension payment.

A letter will be sent to you stating the details of your retirement. Also included is information you will need for Federal income tax purposes. Taxes will automatically be withheld from all checks you receive from NYCERS based on the Federal tax table for a person who is married claiming three exemptions, unless you elect to have taxes withheld on a different basis, or to have no taxes withheld. Your retirement application has a Federal tax withholding section, and NYCERS Form #349 is available for you to indicate your preference.

HELPFUL HINTS – OTHER IMPORTANT INFORMATION

  • The sooner you file an option election, the sooner NYCERS can process your full retirement benefit.
  • You may change your option election no later than the last business day prior to the check date (payment date for Electronic Funds Transfer [EFT]) of your first full payment.
  • All paper checks are mailed 2 business days before the last day of the month and are made payable on the last day of the month. If the last day of the month falls on a weekend, the check is mailed on the Wednesday before the last day of the month.
  • If you do not receive your check by the 10th day of the month, notify NYCERS. A lost check affidavit (Form #399) will be sent to you. NYCERS cannot take a report of non-receipt of a pension check until the 10th of the month. However, if you receive your pension check and it is subsequently lost or stolen, advise us immediately and we will have a stop-payment placed on the check.
  • You may elect to have your payments directly deposited into your bank account through EFT. Simply complete Form #380 and return it to NYCERS. EFT ensures that your payment won’t get lost or stolen, and that you won’t have to make a special trip to the bank for deposits. In addition, you won’t have to wait for checks to clear. Funds are available in your bank account on the last day of each month providing it’s a business day. If the last day of the month is on a weekend or a holiday, the funds will be deposited on the next business day.

HEALTH INSURANCE

NYCERS does not administer health insurance benefits for its retirees. If you have any questions in this regard please contact your agency’s personnel office. For most City employees, the Office of Labor Relations administers health insurance for retirees. The Health Benefits Divisions of the NYC Transit Authority or MTA Bridges and Tunnels administers health insurance for their respective employees and retirees. Here is the contact information for each entity:

NYC Office of Labor Relations – Health Benefits Division – (212) 513-0470

NYC Transit Authority – Employee Benefits – (646) 376-0123

MTA Bridges & Tunnels – Benefits Division – (646) 252-7935

POST-RETIREMENT EARNINGS LIMITATIONS FOR SERVICE RETIREES

Section 212 of the Retirement and Social Security Law (RSSL) sets the amount a retired person may earn during a calendar year in public employment in New York State or New York City without loss, suspension or diminution of his or her retirement allowance. The maximum earnings is $30,000. This dollar limit is subject to change in any given year through the enactment of legislation. If a change is made, the latest amount will be in the SPD Update.

Post-retirement earnings limitations do not apply to those who are 65 or older or those under age 65 who work in the private sector or for the Federal government, or who enter public employment in another state. In addition, these limitations do not apply to City retirees who are employed by a public benefit corporation in New York State. However, NYCERS retirees who retired from a public benefit corporation (except NYC Transit) and accept employment with a City agency are subject to the earnings limitations.

You are strongly encouraged to consult with a NYCERS representative before you accept public employment as a retiree.

LR: Chapter 729 of the Laws of 1996; Chapter 474 of the Laws of 2002; Chapter 74 of the Laws of 2006

SR: RSSL §212

WITHDRAWING AN APPLICATION FOR SERVICE RETIREMENT

You may withdraw your application for service retirement by filing Form #542 with NYCERS up to the day before your effective date of retirement.

CHANGING YOUR RETIREMENT DATE

  • If you have filed for retirement and want to change your retirement date, you may extend your retirement date up to 90 days from the original filing date. Any extension longer than 90 days will require you to withdraw your original application. File Form #543 to change your retirement date.
  • If you want to retire before the retirement date already on file with NYCERS, be sure to file Form #543 before the new effective retirement date.

RETIREMENT OPTIONS

When you prepare for retirement, there are several questions you will want to answer:

  • Do you want to provide continuing retirement income to your spouse, partner or survivor after your death?
  • What is the cost of continuing your retirement income to a beneficiary and the impact on your retirement allowance while you are alive?
  • Can you choose more than one person to receive retirement income and can you change the person(s) you choose after you’ve been retired for some time?

You can provide for continuing retirement income to a beneficiary by electing a retirement option. Electing a retirement option means you will receive a reduced retirement allowance for your lifetime in exchange for providing some type of continuing income to your beneficiary. If you do not elect a retirement option in a timely manner, you will receive the Maximum Retirement Allowance with all payments ceasing upon your death, unless you elected a Temporary Option on your retirement application, in which case your Temporary Option will take effect.

The following Retirement Options apply to all Tier 6, 63/10 Plan Service Retirements, Vested Retirements and Disability Retirements.

MAXIMUM RETIREMENT ALLOWANCE

If you have no spouse, partner, children or others who are dependent upon you for financial support, or you need to maximize your retirement income, you may decide not to elect an option. The Maximum Retirement Allowance provides the highest benefit and is payable to you for as long as you live. However, no further pension payments will be made after your death.

OPTION 1 (100% JOINT-AND-SURVIVOR)

Option 1 is intended for those who wish to ensure that a designated beneficiary will continue to receive a fixed annual lifetime benefit after their death. Option 1 is a reduced benefit that is payable to you for your lifetime. The same reduced benefit will continue to your surviving designated beneficiary for life. Payments cease upon the death of both you and your beneficiary.

Because Option 1 guarantees two specific people an income for life, the life expectancies of the retiree as well as the beneficiary are taken into consideration. Therefore, under Option 1, once you designate a beneficiary and the option is in force, you cannot change your beneficiary designation. If your designated beneficiary dies before you, you will continue to receive the reduced benefit for your lifetime with all payments ceasing upon your death.

OPTION 2 (75% – 50% – 25% JOINT-AND-SURVIVOR)

Option 2 is a reduced benefit that is payable to you for your lifetime. It guarantees that a percentage of your retirement allowance will be payable to your designated beneficiary for his or her lifetime. Your beneficiary, if he or she survives you, will receive 75% or less (in 25% increments) of the reduced benefit paid to you. The Option 2 reduction is not as great as the Option 1 reduction because the surviving beneficiary receives a lesser percentage of your pension benefit. All payments cease after the death of both you and your designated beneficiary. Because Option 2 guarantees two specific people an income for life, the life expectancies of the retiree as well as the beneficiary are taken into consideration. Therefore, under Option 2, once you designate a beneficiary and the option is in force, you cannot change your beneficiary designation. If your designated beneficiary dies before you, you will continue to receive the reduced benefit for your lifetime with all payments ceasing upon your death.

OPTION 3 (FIVE-YEAR CERTAIN)

Option 3 provides the retiree with a reduced benefit for his or her lifetime. If the retiree dies within five years from the date of retirement, the reduced benefit will continue to be paid to the designated primary beneficiary for the unexpired balance of the five-year period. If the designated primary beneficiary predeceases the retiree, the payments due for the remainder of the five-year period are paid in a lump sum to the retiree’s contingent beneficiary, if there is one. If none exists, the balance is paid in a lump sum to the estate of the retiree. Should the designated primary beneficiary die after having started to receive payments, the balance will be paid in a lump sum to the retiree’s designated contingent beneficiary. If none exists, the lump-sum balance is paid to the estate of the primary beneficiary. Unlike Options 1 and 2, you may change your beneficiary with this option, but only within five years from the date of retirement.

OPTION 4 (TEN-YEAR CERTAIN)

Option 4 provides the retiree with a reduced benefit for his or her lifetime. If the retiree dies within ten years from the date of retirement, the reduced benefit will continue to be paid to the designated primary beneficiary for the unexpired balance of the ten-year period. If the designated primary beneficiary predeceases the retiree, the payments due for the remainder of the ten-year period are paid in a lump sum to the retiree’s contingent beneficiary, if there is one. If none exists, the balance is paid in a lump sum to the estate of the retiree. Should the designated primary beneficiary die after having started to receive payments, the balance will be paid in a lump sum to the retiree’s designated contingent beneficiary. If none exists, the lump-sum balance is paid to the estate of the primary beneficiary. Just like Option 3, you may change your beneficiary with this option, but only within ten years from the date of retirement.

OPTIONS 1-4

LR: Chapter 414 of the Laws of 1983

SR: RSSL §610 subdivision a

OPTION 5 (50% OR 100%)

Option 5 is known as the “pop-up” option. Under this option, your designated beneficiary will receive the benefit payable under a 50% or 100% joint-and-survivor option. However, should your designated beneficiary predecease you, your retirement allowance will “pop up” to the Maximum Retirement Allowance for the remainder of your life. All payments cease upon your death. Because this option guarantees two specific people an income for life, the life expectancies of the retiree as well as the beneficiary are taken into consideration. Therefore, under this option, once you designate a beneficiary and the option is in force, you cannot change your beneficiary.

OPTION 5

LR: Chapter 592 of the Laws of 1992

SR: RSSL §610 subdivision a

CALCULATING YOUR RETIREMENT BENEFIT

Members in the 63/10 Plan must be at least age 63 and have 10 or more years of Credited Service, of which two years are Membership Service, to be eligible to receive an unreduced Service Retirement Benefit.The Service Retirement Benefit payable under the 63/10 Plan is as follows:

  • Participants with less than 20 years of Credited Service: 1.67% times Final Average Salary times years of Credited Service
  • Participants with 20 or more years of Credited Service: 35% of FAS for the first 20 years of Credited Service; PLUS 2% times FAS times each year of Credited Service in excess of 20

EARLY SERVICE RETIREMENT

Participants in the 63/10 Plan may retire as early as age 55 with at least 10 years of Credited Service provided that they file their service retirement application while still in active payroll status. However, early retirement carries a penalty of a permanent reduction in your retirement benefit at a rate of 6.5% for each year (or a proration thereof) that you have retired prior to age 63.

The following table shows the percentage reduction for various ages:

AGE REDUCTION TABLE

Age at Retirement Percent of Benefit Reduction
63 NONE
62 6.5%
61 13%
60 19.5%
59 26%
58 32.5%
57 39%
56 45.5%
55 52%

NOTE: The percentage reduction is actually calculated per month. The percentages shown in the table assume retirement at exact ages for illustration purposes. Retirement between ages will be calculated on a prorated basis per month.

Members who have left City service prior to age 55 cannot collect an early Vested Retirement Benefit with the penalty, but must wait until age 63 to collect.

LR: Chapter 18 of the Laws of 2012

SR: RSSL §604 subdivisions a, b and c

At retirement, the number of years of Credited Service you have will be confirmed and the Maximum Retirement Allowance payable to you will be calculated by multiplying:

Years of Credited Service X Applicable percentage X Final Average Salary

The following table illustrates hypothetical Maximum Retirement Allowances for members in the 63/10 Plan with 10-20 years of Credited Service. The table assumes a range of Final Average Salaries (calculating Final Average Salary is discussed on the next page). Meeting the 20-year threshold allows members to attain a higher benefit calculation, since reaching 20 years of Credited Service increases the calculation to 1.75% for the first 20 years, with an additional 2% for each year in excess of 20 years. It is urged that you pay particular attention to the difference between the Maximum Retirement Allowance of a member with 19 years of Credited Service and a member with 20 years of Credited Service.

EXAMPLES OF MAXIMUM RETIREMENT ALLOWANCES

If your Final Average Salary is between $60,000 – $90,000:

Please note that the figures in the table represent Maximum Retirement Allowances which are based on payments to you during your lifetime only. A deficit in any of your contribution accounts, or outstanding loans at retirement, will result in a reduction in your retirement benefit.

FINAL AVERAGE SALARY

The compensation base that is used to calculate your pension benefit is referred to as your Final Average Salary (FAS). Your FAS is defined in law as the average of wages earned by a member during any continuous period of employment for which the member was credited with five years of Credited Service. The FAS is not determined by a mere average of wages. Due to a provision in law referred to as the “Kingston Limitation,” wages earned in any one year used in the FAS computation cannot exceed the average of the previous four years by more than 10 percent. If the wages earned in one year of the FAS exceeds the average of the previous four years by more than 10 percent, the amount in excess of 10 percent is excluded from the FAS computation. Please see the example on the next page.

Wage Exclusions

Some wages are excluded from the FAS calculation. The Tier 6 definition of wages includes an “overtime ceiling,” which limits overtime compensation for pension purposes to no more than $15,000; this amount is indexed annually according to the Consumer Price Index. Any overtime compensation earned in excess of the overtime ceiling is excluded from the FAS calculation. Overtime compensation is compensation paid at a rate greater than the standard rate.

The definition of wages also excludes:

  1. wages in excess of the annual salary paid to the Governor of the State of New York;
  2. lump-sum payments for deferred compensation, sick leave, accumulated vacation or other credits for time not worked;
  3. any form of termination pay;
  4. any additional compensation paid in anticipation of retirement; and
  5. in the case of employees who receive wages from three or more employers in a twelve-month period, the wages paid by the third and each additional employer.

LR: Chapter 414 of the Laws of 1983, as amended by Chapter 18 of the Laws of 2012 and further amended by Chapter 510 of the Laws of 2015.

SR: RSSL §608 subdivision a

Kingston Limitation 

Here is an example of how your FAS is calculated, based on a hypothetical retirement date of January 1, 2017. 

Year 2016 2015 2014 2013 2012 2011 2010 2009 2008
Pensionable Earnings 55K 48K 45K 42K 40K 40K 36K 36K 33K
PRIOR 4-YEAR AVERAGE 4 43,750 41,750 39,500 38,000 36,250        
Plus 10% 4,375 4,175 3,950 3,800 3,625        
MAX salary for FAS 48,125 45,925 43,450 41,800 39,875        

For 2016, the actual pensionable earnings were $55,000. However, we must apply the Kingston Limitation and compare those earnings to the average earned during the previous 4 years. Therefore, instead of the FAS being $55,000, it is reduced to $48,125.

MISCELLANEOUS FAS ISSUES

  • To determine the FAS for part-time service, NYCERS computes hours worked per year (service credited at no more than 70 hours in a two-week pay period), the sum of which equals 1,827 hours (a full year of service) for members regularly scheduled to work 35 hours per week. In other words, NYCERS may be required to use more than one year of service in a part-time position to attain 1,827 hours for each year of the FAS. In an alternative computation, the wages earned in each of the six years immediately preceding your retirement date are added together and the sum is then divided by your years of Credited Service. Whichever computation provides the higher FAS is the one NYCERS will use for the benefit calculation.
  • If you receive a lump-sum paycheck in one of the years used in the FAS calculation for retroactive wage increases pursuant to a collective bargaining agreement, you will not be penalized by the Kingston Limitation. In other words, the wage increases will be applied to the years in which the money was earned, not the year in which the lump-sum paycheck for the retroactive increases was paid. If you have already retired, your pension will be revised to reflect the increases in salary.
  • Whether or not increases in compensation due to longevity pay or shift differentials can be included in your FAS is an issue governed by union contract. To find out if such additional compensation is pensionable, please consult with your public employee union.

COST-OF-LIVING ADJUSTMENT (COLA)

Once you meet eligibility thresholds after retirement, your pension benefit will be increased due to COLA. COLA is an annual adjustment to your retirement benefit that is based on the Consumer Price Index (CPI).

The following persons are eligible to receive COLA:
  • Disability retirees, regardless of age, who have been retired for at least 5 years.
  • Service retirees who are at least age 62 AND have been retired for at least 5 years.
  • Service retirees who are at least age 55 AND have been retired for at least 10 years.
  • Beneficiaries receiving an Accidental Death Benefit, regardless of age, who have been receiving that benefit for at least 5 years.
  • Spouses receiving a joint-and-survivor option benefit are eligible to receive 50% of the monthly COLA that the retiree would have been eligible for.
The following persons are not eligible for COLA:
  • Non-spouse beneficiaries
  • Beneficiaries of the 5- or 10-Year Certain Option

The COLA calculation is based on 50% of the CPI. This figure is then multiplied by either $18,000 or your Maximum Retirement Allowance (including any prior years’ COLAs), whichever is less. The result is then added to any previous permanent COLA amounts. The sum of these COLA figures equals the current year’s COLA payment. The COLA amount may not be less than 1% or more than 3% in any year.

LR: Chapter 125 of the Laws of 2000

SR: NYC Administrative Code §13-696

DOMESTIC RELATIONS ORDERS AND OTHER MARITAL ISSUES

Under the equitable distribution laws of the State of New York and other states, pension benefits are considered a marital asset. As a result, the Supreme Court of the State of New York may assign a portion of your current and/or future pension benefits to an ex-spouse under a Domestic Relations Order.

An ex-spouse cannot assign his or her portion of the member’s pension during his or her lifetime to another person. In addition, an ex-spouse cannot designate a beneficiary for his or her portion of the member’s pension to continue after his or her death. Unless there is an option selection naming the ex-spouse as a beneficiary, the ex-spouse’s portion will cease upon the death of the pensioner.

A portion of your current and/or future pension benefits may be assigned by Court Order to satisfy child support payments.

By law, NYCERS is bound to execute the order of the court.

NY State Estate Powers of Trust Law (EPTL) provides that if you are married and you change your beneficiary after 1992 to someone other than your spouse, your spouse may retain a right to a portion of your pension or death benefit.

DISABILITY RETIREMENT

In the event you become physically or mentally incapacitated and cannot continue to perform the duties of your job title, you may be eligible to collect a Disability Retirement Benefit, provided you meet the eligibility requirements specified below. In addition to meeting the eligibility requirements, the application filing process must be adhered to, so it is imperative that you review ALL requirements set forth in this section. If you are in a title covered by a special disability benefit, your eligibility and filing requirements may differ. Please refer to the “Special Disability Provisions” subsection for more details.

DISABILITY RETIREMENT – ELIGIBILITY

Provided that you meet the filing requirements for your title, you are eligible to receive a Disability Retirement Benefit at any age, if:

  • You have ten or more years of Credited Service; AND
  • NYCERS’ Medical Board determines that:
  1. you are physically or mentally incapacitated to perform the duties of your job title; AND
  2. you were so incapacitated at the time you ceased performance of your duties.

LR: Chapter 414 of the Laws of 1983

SR: RSSL §605 subdivisions b(1) and c

Provided that you meet the filing requirements for your title, you are also eligible to receive a Disability Retirement Benefit at any age, if:

  • You have less than ten years of Credited Service; AND  
  • NYCERS’ Medical Board determines that:
  1. you are physically or mentally incapacitated to perform the duties of your job title; AND
  2. you were so incapacitated at the time you ceased the performance of your duties; AND
  3. your disability is the result of an accidental injury sustained while a NYCERS member in City service, in the performance of your duties, and not caused by your own willful negligence.

LR: Chapter 414 of the Laws of 1983

SR: RSSL §605 subdivision b(3)

Definition of an Accident

A stringent standard is used when determining which disabling injuries qualify as an accident. The term “accident” has been defined by the courts as “a sudden, fortuitous mischance, unexpected, out of the ordinary, and injurious in impact.” Injuries sustained while performing routine duties, not resulting from unexpected events, are not accidents. Injuries sustained by sudden, unexpected events which are not a risk of the work performed, are usually considered to be accidents.

FOR EXAMPLE: A disabling injury sustained by a member while in the performance of duty due to an incident which involves routine lifting or bending would not qualify as an accident.

FILING AN APPLICATION FOR DISABILITY RETIREMENT

You must file an application for a Disability Retirement Benefit:

  1. within three months from the last date you were being paid on the payroll, OR
  2. while you are on a leave of absence without pay for medical reasons, either voluntarily or involuntarily, OR
  3. no later than 12 months after the date you receive notice that your employment has been terminated, provided that you were on an approved leave of absence without pay for medical reasons, which was in effect immediately prior to such termination.

LR: Chapter 414 of the Laws of 1983

SR: RSSL §605 subdivision b(2)

The application must be filed

  • by you, OR
  • by a person with legal authority to act on your behalf, OR
  • by the head of the agency where you are employed

LR: Chapter 414 of the Laws of 1983

SR: RSSL §605 subdivisions a(1) and a(2)

NOTE: See the Special Disability Provisions subsection on page 56 for filing requirements if you are an Emergency Medical Technician (EMT) or Deputy Sheriff applying for a three-quarters disability benefit.

DISABILITY RETIREMENT APPLICANTS NEED THE FOLLOWING:

  • Form #801 – Instructions for Members Applying for Disability Retirement
  • Form #624 – Application for Disability Retirement for Tier 6, 63/10 Plan Members
  • Form #605 – Applicant’s Report of Personal Disability
  • Form #606 – Physician’s Report of Disability
  • Form #608 – General Authorization for Release of Medical Information
  • Form #609 – Questionnaire to be Completed by Applicant for Disability Retirement

Medical privacy laws require that you must authorize NYCERS to request information on your behalf. Please be advised that upon receipt of your medical authorization, it is NYCERS’ practice to contact public hospitals and/or H.I.P. Centers. If you have a private physician or your medical provider practices in another healthcare facility, it is your responsibility to submit any and all medical evidence to support your claim for disability.

If you are claiming that your disability was the result of an on-the-job accident, NYCERS will send an Agency Report on Accident to your agency to verify the accident/incident. When your agency returns the Agency Report on Accident, it will also submit documentation such as an incident report prepared by you, your manager or supervisor, or a witness, which describes all of the injuries and the events surrounding them. This report is most valuable if it is written at the time of the accident/incident.

Withdrawing an Application for Disability Retirement

You may withdraw your application for a Disability Retirement Benefit provided that NYCERS’ Medical Board has not yet finalized its findings.

You must complete Form #619 in order to officially withdraw your application.

PLEASE NOTE: NYCERS will not process your disability retirement application until the Medical Unit receives all of the appropriate forms/reports, etc. and determines your eligibility. You are also encouraged to submit your birth certificate or other valid proof of birthdate as early as possible, as it will help facilitate the process if you are ultimately approved.

Most Common Reasons for Rejection of an Application
  • You did not submit your application for disability retirement on a timely basis.
  • You are vested or retired or received a refund of your contributions, which terminated your membership in NYCERS.
  • You do not have 10 years of Credited Service and did not claim to have an on-the-job accident.
  • Your agency cannot verify your accident/incident or it occurred prior to your NYCERS membership date.
THE MEDICAL BOARD

NYCERS’ Medical Board functions as an independent entity. The Medical Board consists of three medical doctors: one appointed by the Board of Trustees; one appointed by the Department of Health and Mental Hygiene; and one appointed by the Department of Citywide Administrative Services.

LR: Chapter 929 of the Laws of 1937

SR: NYC Administrative Code §13-123

The Medical Board is charged with conducting all medical examinations resulting from disability applications and reporting its findings to the Board of Trustees. The standards used by the Medical Board in determining initial entitlement for a disability benefit focus on the physical or mental incapacitation of the applicant. In determining whether such incapacity exists, the Medical Board follows guidelines set forth in NYCERS’ Rules. Here is an excerpt from NYCERS’ Rules:

“In determining whether such incapacity exists, the Medical Board must determine that the member is unable to perform the critical or essential elements of his or her job title in a customary and usual manner. The mental or physical incapacity must be such that the Medical Board concludes that the end of disability cannot be foreseen for at least one year. In addition, a physical or mental incapacity shall not be considered to be disabling if the member may alleviate or control the condition by availing him or her self of reasonable and safe medical treatment. In determining whether the member was incapacitated at the time he or she ceased performance of his or her duties, there shall be a rebuttable presumption that a member who is disabled at the time of the Medical Board’s determination was also disabled at the time he or she ceased performance of his or her duties.”

THE PROCESS

What happens after you apply?

Once NYCERS receives your properly completed disability retirement application, NYCERS will:

  1. Verify your eligibility to apply, which may entail contacting your employing agency to verify your employment status and to obtain the Agency Report on Accident (where applicable).
  2. If eligible, and if you have completed Form #608, ask public hospitals and/or H.I.P. Centers to provide a medical history. Remember, if you have a private physician or your medical provider practices in another healthcare facility, you must provide the medical history.
  3. Verify that your case file, including medical records, is complete. The processing of your case may be suspended or closed if the Medical Board determines that the medical evidence is insufficient to schedule you for an examination.
  4. Schedule you to appear before NYCERS’ Medical Board for a medical interview and/or examination. (You must confirm your appointment at least 5 days in advance by calling 347-643-3000.)
Appearing Before NYCERS’ Medical Board for Examination

You MUST appear before NYCERS’ Medical Board when scheduled for an interview and/or examination, or provide proof that you were medically unable to do so. If you fail to do so, your disability retirement application will be suspended or closed. Depending on your employment status, you may not be eligible to reapply. Please note that you will have to be examined by the Medical Board before a decision can be made on your application for disability retirement. No decision rendered in a proceeding under the Workers’ Compensation Law or Social Security Law is binding on the Medical Board.

Actions by the Medical Board
  1. NYCERS’ Medical Board will review your medical file and conduct an interview and/or examination.
  2. The Medical Board may defer its decision pending receipt of additional medical evidence from you or it may refer you to an independent consultant for examination at NYCERS’ expense.
  3. The Medical Board will then make its recommendation to the Board of Trustees either approving or denying your application.
  4. Your application could be approved on the condition that you return one year later for reexamination to determine your continued eligibility to receive a Disability Retirement Benefit.
  5. The Medical Board reserves the right to reexamine a disability retiree once a year until normal service retirement age. If upon reexamination the Medical Board determines that you are no longer disabled, the Department of Citywide Administrative Services will place your name on a list of preferred eligible candidates for appointment to a position in a salary grade not exceeding that from which you were retired. Your Disability Retirement Benefit will be paid to you until such time as you are offered a position in public service. If you return to work, or if you fail to return to work when offered a position in public service, NYCERS will discontinue payment of your Disability Retirement Benefit.
  6. Members retired by reason of disability for more than one year may request a reexamination by NYCERS’ Medical Board to establish their ability to return to work. You must contact NYCERS immediately upon your return to work so that you can be restored to active membership. Failure to do so may jeopardize your rights to future benefits from this system.
Actions by NYCERS
  1. If the Medical Board recommends approval of your disability application, NYCERS will establish a retirement date, process your advance payment and send you a letter advising you of the amount. An advance payment is a temporary partial payment until such time as your Disability Retirement Benefit is finalized. NYCERS will process your case for an advance payment when it receives necessary payroll information from your employer. Approximately 90 days after you receive your first advance payment, you will be sent a letter advising you of the amount payable to you under various options.
  2. If the Medical Board denies your disability application, you have appeal rights described in detail in the Denial and Appeal Process subsection.
  3. If the Medical Board defers its decision, NYCERS will send you a letter notifying you of the deferral. You may be asked to provide additional information or appear for an evaluation before a medical specialist. If you do not comply with the instructions in the letter, your application will be suspended or closed.

DENIAL AND APPEAL PROCESS

Denial of Application
  • If the Medical Board finds that you are not physically or mentally incapacitated for the performance of your duties, it will recommend denial of your application to the Board of Trustees.
  • If you do not meet the Credited Service requirement and your application is being considered because of an on-the-job incident, even though you are disabled your application may still be denied. The reason for denial may be either the fact that the incident is not an accident or that the disability is not causally related to the accident.
Appeal Process

If your application is denied for reasons other than a finding by the Medical Board that you are not disabled, you may appeal the Medical Board’s denial recommendation to the Board of Trustees. Your request to appeal must be in writing and submitted to NYCERS by the date noted on your denial letter. You will then be scheduled to appear before the Board of Trustees to present your appeal.

NYCERS’ Board of Trustees does not have the authority to make medical decisions or to overrule medical decisions of the Medical Board. Therefore, an appeal brought before the Board of Trustees will involve issues relevant to the cause of the disability, rather than a medical determination on physical or mental incapacitation.

If the Board of Trustees accepts the recommendation of the Medical Board to deny your application, you may:

  • reapply for disability retirement if you are otherwise eligible, OR
  • submit current medical evidence not previously reviewed by the Medical Board within 60 days of the Board of Trustees’ determination if you are not otherwise eligible to reapply for disability retirement, OR
  • challenge your decision in court (Article 78 relief), OR
  • contest the Medical Board’s recommendation by electing the Final Medical Review process, whereby your current application with supporting documentation and all Medical Board reports is evaluated by a Special Medical Review Committee made up of three independent doctors (see Final Medical Review subsection).

FINAL MEDICAL REVIEW

Tier 6, 63/10 Plan members have the opportunity to contest the findings and recommendation of NYCERS’ Medical Board through a process called Final Medical Review.

In order to elect Final Medical Review, a request must be made on your behalf by either your bargaining representative or by the head of the agency in which you are employed. In addition, you must waive your right to challenge the decision in court. The request and the completed waiver must be received by NYCERS within 45 working days from your receipt of the Board of Trustees’ letter indicating denial of your disability retirement application. Information on Final Medical Review is sent after the Board of Trustees ratifies the Medical Board’s recommendation of denial.

Once you choose to proceed with Final Medical Review, NYCERS will forward your current application, supporting documentation and all Medical Board reports to a Special Medical Review Committee of three independent doctors selected by a Final Medical Review Coordinator. You cannot submit any additional medical evidence to these doctors. Your union and the City will pay the fee for each examination conducted by the committee.

The Board of Trustees must accept the findings and recommendation of the Special Medical Review Committee, resulting in a final and conclusive administrative determination. You waived your right to challenge this determination in court when you elected Final Medical Review.

LR: Chapter 607 of the Laws of 1998

SR: RSSL §605 subdivision e; NYC Administrative Code §13-169 (cross-reference)

DISABILITY RETIREMENT BENEFIT

  • If your application for disability retirement is approved by NYCERS’ Medical Board, the Disability Retirement Benefit is equal to the greater of:
  • 1.67% times Final Average Salary (FAS) times years of Credited Service, OR
  • 1/3 of your FAS, EXCEPT
  • where a member is eligible to receive a Service Retirement Benefit, and that benefit is greater than either of the above calculations, then the member will receive a Disability Retirement Benefit equal to the Service Retirement Benefit.

As is the case with service retirement, a Disability Retirement Benefit is payable as a maximum retirement allowance or in an optional form elected by you at retirement. A deficit in any of your contribution accounts, or an outstanding loan at retirement, will result in a reduction in your retirement benefit.

NOTE: 63/10 Plan members who are in EMT titles or who are NYC Deputy Sheriffs and qualify for a performance of duty or accidental disability benefit should refer to page 56.

LR: Chapter 601 of the Laws of 1997

SR: RSSL §605 subdivision d (3)

SPECIAL DISABILITY PROVISIONS

EMERGENCY MEDICAL TECHNICIANS

Three-Quarters Performance of Duty Disability Retirement

Emergency Medical Technicians (EMTs) or Advanced EMTs who become mentally or physically incapacitated as a natural and proximate result of an injury sustained in the performance and discharge of duty on or after March 17, 1996 shall be entitled to a disability benefit equal to three-quarters of Final Average Salary minus 100% of the annual payment from the Workers’ Compensation Board associated with the injury. In order to file an application for this type of disability retirement, you must be employed in the title of EMT or Advanced EMT at the time you file.

LR: Chapter 587 of the Laws of 1998

SR: RSSL §607-b

Heart Law

The Heart Law provides a presumption that a disease of the heart was incurred in the performance of duty. Emergency Medical Technicians and Paramedics employed by the Fire Department of New York who are approved for disability under the Heart Law are entitled to a disability benefit equal to three-quarters of Final Average Salary minus 100% of the annual payment from the Workers’ Compensation Board associated with the disease of the heart. The presumption may be rebutted by competent medical evidence.

LR: Chapter 697 of the Laws of 2002

SR: General Municipal Law §207-q

Hepatitis, AIDS and Tuberculosis (HAT) Law

The HAT Law provides that an EMT or Advanced EMT who contracts HIV (where he or she may have been exposed to bodily fluids of a person under his or her care or treatment, or while the member examined, transported or had contact with such person in the performance of duties), tuberculosis or hepatitis, will be presumed to have contracted such disease in the performance and discharge of duty. Members approved for disability under this law are entitled to a disability benefit equal to three-quarters of Final Average Salary minus 100% of the annual payment from the Workers’ Compensation Board associated with the disabling condition. The presumption may be rebutted by competent medical evidence.

LR: Chapter 587 of the Laws of 1998

SR: General Municipal Law §207-o; RSSL §607-b

NEW YORK CITY DEPUTY SHERIFFS

Three-Quarters Accidental Disability Retirement

NYC Deputy Sheriffs who become physically or mentally incapacitated for the performance of duties as the natural and proximate result of an accident, not caused by their willful negligence, are entitled to a disability benefit equal to three-quarters of Final Compensation. Final Compensation is defined as wages earned during any five consecutive years (subject to certain limitations), minus 100% of the annual payment from the Workers’ Compensation Board associated with the injury. In order to file an application for this type of disability benefit, you must be employed in a Deputy Sheriff title specified in the law at the time you file.

LR: Chapter 516 of the Laws of 2003

SR: RSSL §605-c

POST-RETIREMENT EARNINGS LIMITATIONS FOR DISABILITY RETIREES

Tier 6, 63/10 Plan disability retirees of NYCERS are required to report any additional earnings received after the effective date of retirement. This requirement is in effect each year for as long as the retiree receives a disability pension and entails the reporting of additional earnings received in the prior calendar year. Disability retirees are required to complete Form #351 (Affidavit of Personal Service Income) on an annual basis, specifying earnings from the public and/or private sectors for the preceding calendar year. Failure to comply with this requirement will result in the suspension of future monthly pension payments until Form #351 is completed and submitted to NYCERS along with any pertinent documentation.

Personal Service Income is defined as any income earned from the public and/or private sectors with the exception of the Disability Retirement Benefit received from NYCERS, Social Security benefits, Workers’ Compensation payments or any income earned from rental property, stocks, bonds, IRAs and interest earned on deposits in bank accounts.

Depending on which disability provision a retiree retired under, Personal Service Income may be subject to a yearly cap, referred to as the Income Limitation. The Income Limitation is a fixed dollar amount established by adding (or subtracting) the Consumer Price Index (CPI) percentage increase (or decrease) to (or from) the Income Limitation for the prior year. The Income Limitation for prior years has been:

Once a disability retiree exceeds the Income Limitation in any given year, his or her pension will be suspended for 12 months; the penalty is not dollar for dollar.

LR: Chapter 414 of the Laws of 1983

SR: RSSL §605 subdivision c

IMPORTANT NOTE FOR NYC DEPUTY SHERIFFS AND EMERGENCY MEDICAL TECHNICIANS:

  • NYC Deputy Sheriffs receiving an accidental disability retirement benefit are not subject to any limitations on income earned from the private sector, but are limited to $1,800 in earnings derived from public employment in New York City, New York State or a locality within New York State, including pension earned. NYC Deputy Sheriffs must still file Form #351 with NYCERS on an annual basis.
  • Emergency Medical Technicians receiving a performance of duty disability benefit under Retirement and Social Security Law (RSSL) §607-b are not subject to any limitations on income earned from the private sector, but are limited to $1,800 in annual earnings derived from public employment in New York City, New York State or a locality within New York State, including pension earned. Emergency Medical Technicians must still file Form #351 with NYCERS on an annual basis.

LR: Chapter 461 of the Laws of 2009

SR: RSSL §607-b subdivision a

SURVIVOR BENEFITS

In the event of your death prior to retirement, your membership in NYCERS entitles your beneficiary(ies) to a Death Benefit. There are two primary types of death benefits — Ordinary Death Benefits and Accidental Death Benefits. This section explains the characteristics of each type.

DESIGNATING BENEFICIARIES

When you filed your membership application, you were able to designate one or more beneficiaries to receive an Ordinary Death Benefit (ODB) in the event of your death before retirement. You were able to designate whomever you wish – family members, partners, friends, etc. – or your Estate. If you designated a minor (under age 18), you must have also completed Form #137 indicating guardian information. If there is no designation on file, the ODB will be payable to your Estate.

Your beneficiary designation remains on file at NYCERS and will govern eligibility to receive the ODB. At any time prior to your retirement, you may change the beneficiary(ies) you designated by filing a Designation of Beneficiary Form. If you designate a minor, you must also complete Form #137 indicating guardian information. The latest properly executed form you file will supersede all previously filed forms.

You may choose to designate two categories of beneficiaries — Primary Beneficiaries and Contingent Beneficiaries. Primary Beneficiaries are entitled to an ODB in the event of your death before retirement. Contingent Beneficiaries are entitled to an ODB only if they have survived all designated Primary Beneficiaries at the time of your death.

You must indicate the percentages of the ODB you wish to allocate for each category, and the sum of each category must total 100%. If you do not indicate percentages, the ODB will be divided equally.

EXAMPLE: John Smith designates his wife and three daughters as his Primary Beneficiaries and his two brothers as his Contingent Beneficiaries. John does not allocate percentages among his designees. The default percentages for his Primary Beneficiaries are 25% each. The default percentages for his Contingent Beneficiaries are 50% each (only payable if no Primary Beneficiaries are eligible).

When you have designated multiple Primary Beneficiaries and one or more predeceases you and you do not file a revised beneficiary form, your ODB will be divided among the remaining designees according to the percentages you allotted to each.

Your Annual Disclosure Statement (ADS), mailed in April each year and available in My NYCERS, indicates the beneficiaries on file with NYCERS. You are encouraged to review your ADS carefully, as you may need or want to change the beneficiaries on file.

If you designate your spouse as a beneficiary for an ODB, your designation will be revoked upon divorce, annulment of marriage or judicial separation. However, the revocation will not take effect if you redesignate such person as a beneficiary after the divorce, annulment or separation.

Designations made in connection with joint-and-survivor retirement options, or designations that are required under a domestic relations order on file with NYCERS, are irrevocable by law. Before payment of an ODB can be issued, NYCERS must receive a copy of the judgment of divorce, annulment or judicial separation.

LR: Chapter 173 of the Laws of 2008

SR: Estates, Powers and Trusts Law §5-1.4

Tier 6, 63/10 Plan members may also designate one or more beneficiaries to receive a Post-Retirement Death Benefit (Form #501); see page 63 for more information about this benefit.

Right of Election

NY State Estate Powers of Trust Law (EPTL) provides that if you are married and you change your beneficiary after 1992 to someone other than your spouse, and you die while married, your spouse retains a right to a portion of your death benefit.

NOTE: If it is determined that your death is the result of an on-the-job accident, an Accidental Death Benefit is payable to your Eligible Beneficiaries. Such Eligible Beneficiaries are defined by statute. Please refer to page 64 for more information.

ORDINARY DEATH BENEFIT

Your beneficiary(ies) will be entitled to an ODB if you die before retirement, whether or not death occurs as the result of an accident sustained on the job.

An ODB will be paid only if: (A) you were being paid on payroll at the time of your death;

OR

(B) you were off payroll or you were on an authorized leave without pay at the time of your death; AND

  • you were on payroll, in service and paid within the last 12 months before death; AND
  • you were not gainfully employed since last on the payroll; AND
  • you had credit for one or more years of continuous service since you last entered the service of your employer.

LR: Chapter 617 of the Laws of 1986

SR: RSSL §606 subdivision e(1)

OR

(C) Effective October 1, 2000, you were on an authorized leave of absence without pay for medical reasons which has continuously been in effect since you were last paid on the payroll, provided you were in service and last paid on the payroll within the four-year period prior to your death.

LR: Chapter 290 of the Laws of 2001

SR: RSSL §606 subdivision e(1)

The ODB payable is a multiplication of your salary as indicated below. Your beneficiary(ies) will also receive a refund of your BMCs plus earned interest.

DEATH BENEFIT PLANS

Two distinct Death Benefit Plans exist within the Ordinary Death Benefit structure — Death Benefit Plan 1 and Death Benefit Plan 2. Each type pays a different benefit and recent laws dictate who belongs to which plan.

If you became a member of NYCERS prior to January 1, 2001, you were required to irrevocably choose between Death Benefit Plan 1 and Death Benefit Plan 2. However, legislation enacted in 2000 allows beneficiaries to receive the greater of Death Benefit Plan 1 or Death Benefit Plan 2, if the member had selected Death Benefit Plan 1. If, however, the deceased member had selected Death Benefit Plan 2 and Death Benefit Plan 1 would provide a greater benefit, Death Benefit Plan 2 is still payable. Additionally, the law provides that any person who becomes a member of NYCERS on or after January 1, 2001 will automatically be covered by Death Benefit Plan 2. A description of Death Benefit Plan 2 is below.

LR: Chapter 554 of the Laws of 2000

SR: RSSL §606 subdivision a(4)

DEATH BENEFIT PLAN 2

A refund of the Basic Member Contributions, plus interest, in your MCAF account, PLUS a multiplication of your salary as indicated in the following table:

YEARS OF SERVICE A LUMP-SUM BENEFIT EQUAL TO
At least one year, but less than two years One year’s Current Salary*
At least two years, but less than three years Two times Current Salary
At least three years Three times Current Salary

* Current Salary: The regular compensation earned during a member’s last 12 months of service, plus overtime, night differentials, longevity payments and any other type of pensionable earnings where applicable.

The lump-sum benefit described above is reduced for each year a member remains in active service beyond age 60. The following table shows the reduction for each age:

REDUCTIONS IN BENEFITS AFTER AGE 60 AND STILL IN SERVICE
AGE AT DEATH AMOUNT OF BENEFIT
61 95% of benefit in force
62 90% of benefit in force
63 85% of benefit in force
64 80% of benefit in force
65 75% of benefit in force
66 70% of benefit in force
67 65% of benefit in force
68 60% of benefit in force
69 55% of benefit in force
70 OR OVER 50% of benefit in force

DEATH BENEFITS FOR VESTED MEMBERS

If you have 10 or more years of Credited Service, die prior to your Payability Date, and at a time and in a manner which did not result in payment of an Ordinary Death Benefit to your beneficiary(ies), a lump-sum death benefit will be paid to the beneficiary(ies) you last designated. The death benefit amount awarded is based on 50% of the death benefit that would have been payable if you had died on your last day in active service plus the return of the Basic Member Contributions in the Member Contribution Accumulation Fund (MCAF), plus interest. If you did not render 10 or more years of Credited Service, only the return of your contributions in the MCAF will be made payable to your beneficiary(ies), plus interest.

LR: Chapter 388 of the Laws of 1998

SR: RSSL §606-a

POST-RETIREMENT DEATH BENEFIT

A Post-Retirement Death Benefit (PRDB) is payable once you retire. The amount is dependent upon your date of death after retirement (see table below). At retirement, members can designate the beneficiary(ies) to receive this benefit (Form #501). In the event a designation is not made, the benefit will be paid to the estate.

POST-RETIREMENT DEATH BENEFITS PAID UNDER DEATH BENEFIT PLAN 2
IF DEATH OCCURS AMOUNT OF BENEFIT
In the first year of retirement 50% of the benefit in force*
In the second year of retirement 25% of the benefit in force*
In the third year of retirement and thereafter 10% of the benefit in force* at age 60

*The benefit in force is defined as the Ordinary Death Benefit (ODB) which would have been payable if you died the day before your retirement date, if any. However, where death occurs in the third year of retirement or thereafter, the benefit in force is defined as the ODB at age 60, if any.

LR: Chapter 617 of the Laws of 1986

SR: RSSL §606 subdivision a(2)(f); RSSL 606 (a) 2f [reduction]

ACCIDENTAL DEATH BENEFIT

If NYCERS’ Medical Board determines that your death was the natural and proximate result of an accident sustained in the performance and discharge of duty, not caused by your own willful negligence, your Eligible Beneficiary(ies) is entitled to an Accidental Death Benefit. The annual benefit equals 50% of the wages you earned during your last year of service, or your annual wage rate if you had less than one year of service. Unlike the Ordinary Death Benefit, the deceased member’s Basic Member Contributions are not refunded to the beneficiary(ies).

LR: Chapter 414 of the Laws of 1983

SR: RSSL §607 subdivision a

The Eligible Beneficiaries of the Accidental Death Benefit are defined by statute in priority order. The benefit is paid in the following priority order:

  • Your spouse, until remarriage, unless he or she has renounced survivorship rights, OR
  • Each of your children until he or she reaches age 25, OR
  • Your parents who depend on you for support, OR
  • Any person who qualified as a dependent on your final Federal income tax return, until age 21, OR
  • Anyone you designate as your beneficiary(ies) for your Ordinary Death Benefit

LR: Chapter 414 of the Laws of 1983, as amended by Chapter 408 of the Laws of 2000

SR: RSSL §601 subdivision d

If one of the persons in the priority order above ceases to be an Eligible Beneficiary, then the benefit continues to the next person(s) on the list. For example, if no spouse exists and the children are receiving the Accidental Death Benefit, when they reach 25 the benefit will continue to the next on the list — dependent parents, etc.

Where there are two or more children as the Eligible Beneficiaries, the benefit will be divided equally between them. Likewise, where there are two dependent parents, the benefit will be divided equally between them. Where there are two or more Designated Beneficiaries for the Ordinary Death Benefit entitled to receive the Accidental Death Benefit, the benefit will be divided in accordance with the percentage allotted to such Designated Beneficiaries.

FILING FOR ORDINARY OR ACCIDENTAL DEATH BENEFITS

Once a member is deceased, NYCERS must be notified and provided with an original death certificate. Notification can be given to NYCERS by anyone.

Upon receipt of the death certificate, NYCERS will: 

  • Calculate any benefits due
  • Mail a Claimant’s Statement form and instructions to the beneficiary(ies)
  • Provide payment choices

ForAccidental Death Benefits, the Claimant’s Statement form(s) must be filed by your beneficiary(ies) or their guardian(s) and received by NYCERS within 60 days after NYCERS is notified of your death.

LR: Chapter 414 of the Laws of 1983

SR: RSSL §607 subdivision a

When a claim for an Accidental Death Benefit is filed, the case will be referred to the Medical Board. The beneficiary(ies) may be required to submit supporting documentation. Once the Medical Board reviews all necessary documentation, it will render an opinion on the cause of death and report its findings to the Board of Trustees. If the Medical Board recommends denial of the claim, the claimant may be notified of the opportunity to appeal the denial before a Trial Committee if applicable. The Trial Committee is made up of members of the Board of Trustees, who will hear argument and take evidence and report their recommendations to the full Board of Trustees. The Board of Trustees will then make the final determination.

NOTE: Accidental Death Benefit cases will require the completion of an Agency Report on Accident to be submitted by the deceased member’s employing Agency.

SPECIAL ACCIDENTAL DEATH BENEFITS (EMT & TBTA ONLY)

The Special Accidental Death Benefit will be paid to the widow or widower, or to the children under the age of 18 or under the age of 23 if a student, of NYCERS members in the following titles who have died of injuries sustained in the line of duty as the natural and proximate result of an accident, not caused by the member’s own willful negligence:

  • An EMT or Advanced EMT
  • A uniformed member of the Triborough Bridge and Tunnel Authority

The Special Accidental Death Benefit is a supplemental monthly payment in addition to the accidental death benefit of 50% of wages. The effect of the Special Accidental Death Benefit is to continue paying the equivalent of the decedent’s last year salary including earned overtime, night differential, longevity payments and any other type of pensionable earnings, where applicable. The Special Accidental Death Benefit is increased annually by a percentage determined on the basis of the Consumer Price Index (CPI). The maximum potential benefit will be reduced by the basic amount of the Social Security survivor’s benefit and the Workers’ Compensation award.

EMT

LR: Chapter 583 of the Laws of 2004 (original Chapter; 3% increase of salary computation enacted annually)

SR: General Municipal Law §208-f

TBTA

LR: Chapter 742 of the Laws of 2004 (original Chapter; 3% increase of salary computation enacted annually)

SR: General Municipal Law §208-f

PRESUMPTIVE ACCIDENTAL DEATH BENEFITS UNDER THE HEART LAW (EMT)

FDNY Emergency Medical Technicians who die from a disease of the heart will be entitled to a presumption that such disease of the heart was incurred in the performance and discharge of duty. The Eligible Beneficiary(ies) of such members may be entitled to an accidental death benefit and Special Accidental Death Benefit which are paid in accordance with the relevant statute(s) governing such death benefits.

EMT

LR: Chapter 697 of the Laws of 2002

SR: General Municipal Law §207-q

DEATH BENEFITS FOR MILITARY PERSONNEL

The beneficiaries of Tier 6, 63/10 Plan members who die while on military duty may be entitled to receive either an Ordinary Death Benefit or an Accidental Death Benefit. Depending on the deceased member’s title, a Special Accidental Death Benefit might also be paid.

To be eligible for coverage a member must have died while performing “service in the uniformed services” as defined by the Uniformed Services Employment and Reemployment Rights Act (USERRA). Under USERRA, the term “service in the uniformed services” means the performance of duty on a voluntary or involuntary basis and includes active duty, active duty for training, initial active duty for training, inactive duty training, full-time National Guard duty, a period for which a person is absent from a position of employment for the purpose of an examination to determine the fitness of the person to any such duty, and a period for which a person is absent from employment for the purpose of performing funeral honors duty as authorized by section 12503 of title 10 or section 115 of title 32.

Ordinary Death Benefit. For the purposes of paying the Ordinary Death Benefit, such members are considered to be in service provided they:

(a) were on payroll (in any status) at the time they were called to perform service in the uniformed services and died on or after June 14, 2005; and

(b) had not been otherwise employed while off payroll performing service in the uniformed services.

If such members die prior to rendering the minimum amount of service for the Ordinary Death Benefit, they are considered to have met the requirement. The Ordinary Death Benefit is paid to the designated beneficiaries of such members.

Accidental Death Benefit. For the purposes of paying the Accidental Death Benefit, such members are deemed to have died as a natural and proximate result of an accident provided that:

(a) they were on payroll (in any status) at the time they were called to perform service in the uniformed services and died on or after June 14, 2005; and

(b) no Ordinary Death Benefit had been previously paid.

Such members’ Eligible Beneficiaries will be entitled to an Accidental Death Benefit. The beneficiaries of Emergency Medical Technicians and Triborough Bridge and Tunnel Authority uniformed members will also be entitled to a Special Accidental Death Benefit.

Ordinary and Accidental Death Benefit

LR: Chapter 105 of the Laws of 2005, as amended by Chapter 582 of the Laws of 2011

SR: RSSL §606 subdivision e, RSSL §607 subdivision a

Special Accidental Death Benefit EMT

LR: Chapter 583 of the Laws of 2004 (original Chapter; 3% increase of salary computation enacted annually)

SR: General Municipal Law §208-f

TBTA

LR: Chapter 742 of the Laws of 2004 (original Chapter; 3% increase of salary computation enacted annually)

SR: General Municipal Law §208-f

TAXATION

This section outlines the tax implications associated with benefit disbursements from NYCERS.

TIER 6, 63/10 PLAN LOANS

Please refer to the LOANS Section of this SPD booklet for detailed tax information about loans prior to and after retirement.

REFUNDS

Refunds may result in Federal income tax liability. The taxable portion of your refund, if any, is outlined on an Election of Payment Notice, which is sent to you after your refund has been calculated. This notice explains the Federal income tax consequences and how you may temporarily avoid such consequences by rolling over the taxable portion into a Traditional IRA, Roth IRA or Employer Plan such as the NYC Deferred Compensation Plan, to the extent such rollovers are permissible. If you do not elect to roll over the taxable portion of your refund, NYCERS is required (by the Internal Revenue Code) to withhold 20% of the taxable portion of the refund.

It is important that you review the Election of Payment Notice carefully, particularly deadlines by which you must make a decision on the disbursement of these funds. The Election of Payment Notice contains three options, under which you can elect to receive or roll over the taxable portion of your refund:

  • Direct refund, including the taxable portion, subject to 20% Federal income tax withholding (your refund will be processed under this option if you fail to respond by the deadline stated in the notice).
  • Rollover of the entire taxable portion of the refund into an IRA account or Employer Plan.
  • Rollover of a portion of the taxable distribution, designated by you, into an IRA account or Employer Plan.

IMPORTANT NOTE: Your refund check may be less than the total taxable portion if you have an outstanding loan at the time of the refund.

If you are under age 59½, you may incur a 10% IRS early distribution tax penalty in addition to the normal tax rate. Members who are age 55 or older and have retired or terminated their membership are not subject to the 10% penalty.

PENSIONS

Your pension is subject to Federal income taxes. If you reside in New York State/New York City after retirement you will not be subject to New York State and New York City taxes. If you retire and move to another state, you should inquire about the tax laws of that particular state and/or locality, as state and local taxes may be assessed on your pension.

Internal Revenue Code §414h (IRC 414h) provides for favorable Federal tax treatment for the contributions you made to NYCERS. Federal taxes were deferred while you were making regular pension contributions via payroll deductions. Non-414h contributions were deducted from your paychecks after tax and, therefore, are not subject to taxation a second time (for example, pre-1989 contributions and any non-rollover payments made for the purchase of previous service). At the time of retirement, your Retirement Resolution indicates the amount of IRC 414h and non-IRC 414h contributions included in the calculation of your pension. The IRS considers the non-IRC 414h contributions to be your “Investment in Contract” for the purpose of determining the excludable part of your pension. Consult your tax preparer for further information.

The IRS requires taxpayers to remit tax payments on a “pay as you go” basis. In order to avoid a penalty at year-end for non-prepayment of the tax on your pension, you must either make payments of estimated taxes quarterly, or have income tax withheld from your monthly pension check or electronic payment. You may request income tax withholding when you file your retirement application. Subsequent changes can be made by filing IRS Form W4P (Form #349).

DEATH BENEFITS

Ordinary Death Benefits

The first $50,000 of an Ordinary Death Benefit is considered to come from the New York City Public Employees’ Group Life Insurance Plan and is tax-free. Death benefits paid from other sources count toward the $50,000 tax-free amount. For example, if your union pays a death benefit of $10,000, then the first $40,000 of your ODB is considered tax-free. For the balance of the Ordinary Death Benefit that is taxable, NYCERS will withhold Federal taxes unless the beneficiary files an election to be exempted from such withholding. NYCERS cannot pay any taxable death benefit to a beneficiary until the beneficiary returns an election regarding tax withholding (Form #349).

Beneficiaries of deceased members of NYCERS may choose from three options under which they can elect to receive or roll over the taxable portion of their lump-sum death benefit. The Federal Pension Protection Act of 2006 permits non-spouse beneficiaries to roll over the taxable portion of their lump-sum death benefit.

  • Direct payment of the taxable portion,subject to 20% Federal income tax withholding. (The death benefit will be processed under this option if your beneficiary(ies) fail to respond by the deadline stated in the Election of Payment Notice.)
  • Rollover of the entire taxable portion into an IRA account.
  • Rollover of a portion of the taxable distribution, designated by the beneficiaries, into an IRA account.
Accidental Death Benefits

Accidental Death Benefits are paid in the form of a pension to an Eligible Beneficiary(ies) and are tax-free.

GLOSSARY OF TERMS

1099-R TAX FORM

A tax form used to report distributions from qualified retirement plans to the IRS. This form is sent to retirees annually in the month of January.

414(H) CONTRIBUTIONS

A provision in the Internal Revenue Code which authorizes the deferral of Federal taxes on member contributions. This provision does not apply to New York State and local taxes.

ACCIDENT

In the realm of disability pensions, the term “accident” has been defined by the courts as: “a sudden, fortuitous mischance, unexpected, out of the ordinary, and injurious in impact.”

ACCIDENTAL DEATH BENEFIT

A benefit paid in the form of a pension to the Eligible Beneficiary(ies), as defined by law, of a member who dies as a result of an on-the-job accident not caused by willful negligence on his or her part.

ACCIDENT DISABILITY BENEFIT

A disability pension paid to a member who has been found to be disabled due to the natural and proximate result of an accident sustained in the performance of his or her duties.

ACTUARIAL

Relating to the mathematical science of life expectancy and risk probabilities. In this science, risks are carefully evaluated, proper costs are assessed and adequate provisions are made for future financial obligations.

ANNUAL DISCLOSURE STATEMENT

A comprehensive annual statement sent to NYCERS members detailing: Membership Information, Loan Activity, Beneficiary Designation, Service Summary and all Account Activity for the calendar year.

BASIC MEMBER CONTRIBUTIONS

The contributions required of all Tier 6 members. Participants in the Tier 6, 63/10 Plan pay contributions equal to 3% – 6% of gross wages. These contributions are paid until the member retires or leaves City service.

BASIC TIER 6 PLAN

This refers to the 63/10 Plan, enacted by Chapter 18 of the Laws of 2012.

BUY-BACK

This term relates to the purchase of previous full-time or part-time public service rendered in the employ of a public entity anywhere in New York State.

CITY SERVICE

Service rendered as a paid employee of the City of New York or a Participating Employer which entitles you to NYCERS membership.

CONSUMER PRICE INDEX (CPI)

A leading economic indicator that measures changes in the cost of goods and services in the United States. Certain benefits, such as Cost-of-Living Adjustments, are based on the CPI.

CONTINGENT BENEFICIARY

A person or persons designated by a member who will receive an Ordinary Death Benefit, provided that all primary beneficiaries are deceased at the time of the member’s death.

COST-OF-LIVING ADJUSTMENT (COLA)

An annual increase in pension payments based on changes in the Consumer Price Index. Pensioners are eligible for this annual increase after they have met certain criteria.

CREDITED SERVICE

The total amount of service (Membership, Transferred, Purchased, etc.) accumulated by a member which will count toward his or her pension calculation.

CURRENT SALARY

The regular compensation earned during a member’s plan year, plus overtime, night differentials, and any other type of pensionable earnings, where applicable.

DEATH  BENEFIT

A benefit paid to a Designated Beneficiary(ies) or Eligible Beneficiary(ies) upon the death of a member while in service.

DEFICIT

A shortage of contributions in a member’s account.

DEFINED BENEFIT PLAN

A type of retirement plan that specifiesthe type of benefit to be paid. The benefit payable is typically calculated using a predetermined formula based on years of service and compensation base.

DEFINED CONTRIBUTION PLAN

A type of retirement plan that allows an employee to decide how much to contribute toward his or her retirement plan. The future benefit is not specified and is dependent on the amount of contributions and the return on investments.

DESIGNATED BENEFICIARY

A person or persons nominated by a member to receive an Ordinary Death Benefit upon his or her death. Designated Beneficiaries could be Primary Beneficiaries or Contingent Beneficiaries.

DISABILITY

A physical or mental impairment that prevents an employee from performing the routine duties of his or her job title.

DOMESTIC RELATIONS ORDER (DRO)

A court order derived from a divorce decree or legal separation agreement outlining the circumstances and amounts payable to an alternate payee from a member’s pension benefit.

EARLY SERVICE RETIREMENT

A provision allowing members in the Tier 6, 63/10 Plan to retire as early as age 55 with at least 10 years of Credited Service provided that they file their service retirement application while still in active payroll status. Early retirement carries a penalty of a permanent reduction in the retirement benefit at a rate of 6.5% for each year (or a proration thereof) that the member retired prior to age 63.

ELECTRONIC FUNDS TRANSFER (EFT)

A mechanism for distributions from NYCERS, such as loans and monthly pension payments, to be electronically deposited into a member’s or retiree’s bank account without issuing a paper check. Also known as “direct deposit.”

ELIGIBLE BENEFICIARY

A person(s) who is entitled to receive an Accidental Death Benefit based upon a priority order specified in law.

FINAL AVERAGE SALARY (FAS)

A compensation base used to calculate a pension benefit. FAS is the average of wages earned by a member during any continuous period of employment for which the member was credited with five years of Credited Service, subject to the Kingston Limitation.

FINAL MEDICAL REVIEW

A process by which a member can contest the findings of NYCERS’ Medical Board denying his or her disability claim.

GROSS WAGES

All earnings paid to an employee of a public employer in New York City or New York State before tax deductions and other types of deductions (e.g., health insurance premiums).

INCOME LIMITATION

The dollar amount of Personal Service Income (income derived from the private and/or public sectors) a disability retiree can earn in the calendar year. The Income Limitation is established annually and may change based on the percentage increase or decrease in the prior year’s Consumer Price Index.

INTERIM OPTION

A temporary option election chosen by a member on his or her retirement application. If the member dies before electing a permanent retirement option, the interim option chosen by the member is payable.

KINGSTON LIMITATION

A limitation on the salary earned in any year used in the Final Average Salary computation. Under this limitation, the earnings in any year used in the FAS computation cannot exceed the average salary of the previous four years by more than 10 percent.

MAXIMUM RETIREMENT ALLOWANCE

This is the highest pension payable to a NYCERS member while retired, which stops upon the member’s death.

MEMBER CONTRIBUTION ACCUMULATION FUND (MCAF)

The account in which 63/10 Plan Basic Member Contributions are deposited. Funds in this account earn 5% interest compounded annually.

MEMBERSHIP DATE

Generally, the date a member application is “clocked in” at NYCERS. For members mandated into NYCERS membership (did not voluntarily join), the membership date is six months from their civil service appointment date.

MEMBERSHIP REINSTATEMENT

The restoration of a membership in a public retirement system in New York State which had been terminated.

MEMBERSHIP SERVICE

Full-time or part-time service rendered after joining NYCERS. Transferred Service and Military Service can also be considered Membership Service.

MILITARY SERVICE

Service credited to a member for active duty in the United States Military. Military Service can be purchased under Federal or New York State law.

NON-PERFORMING LOAN

A loan on which no payments have been made for 90 days, or a loan which goes into default.

ORDINARY DEATH BENEFIT

A lump-sum benefit payable to the designated beneficiary(ies) of a member who dies while in service for reasons other than an on-the-job accident.

ORDINARY DISABILITY

A disabling injury or illness of an active member that was not the result of an on-the-job accident.

PART-TIME SERVICE

Public service rendered in the employ of a public entity in which an employee is scheduled to work less than 1,827 hours in a calendar year.

PARTICIPATING EMPLOYERS

Employers, other than agencies of the City of New York, whose employees may join NYCERS (e.g., NYC Transit Authority, NYC Health and Hospitals Corporation).

PAYABILITY DATE

The date by which a member reaches the minimum age required to receive a Vested Retirement Benefit.

PERSONAL SERVICE INCOME

For the purposes of post-retirement earnings limitations for disability retirees, any income (public or private) received during a calendar year excluding a NYCERS pension; Social Security benefits; Workers’Compensation payments; or any income earned from rental property, stocks, bonds, IRAs and interest earned on deposits in bank accounts.

PLAN YEAR

The period of time from April 1st to March 31st, used in determining a Tier 6, 63/10 Plan member’s contribution rate. Beginning in calendar year 2017, the plan year will be January 1st to December 31st.

POST-RETIREMENT DEATH BENEFIT

A lump-sum death benefit payable to a person(s) designated by a member at retirement. The amount of the benefit is dependent upon the date of the member’s death after retirement. This benefit is in addition to any benefit payable under a retirement option.

PREVIOUS SERVICE

Public service rendered in the employ of a public entity in New York State or New York City, or a Participating Employer, before becoming a NYCERS member.

PRIMARY BENEFICIARY

A person(s) designated by a member to receive an Ordinary Death Benefit upon his or her death while in service.

PURCHASED SERVICE

See Buy-Back.

RETIREMENT DATE

The date a member indicates on his or her retirement application, which should be the day after his or her last day paid. If a member is otherwise eligible to retire and files a properly executed retirement application, he or she is officially retired as of his or her retirement date.

ROLLOVER

The transfer of a pre-tax retirement account from one institution to another.

SECTION 212 LIMITATION

A provision in the Retirement and Social Security Law (RSSL) setting the amount a retired person may earn in public employment in New York State without loss, suspension, or diminution of his or her retirement allowance during a calendar year.

SERVICE SUMMARY

A history of Credited Service belonging to a member. If updated, this information can be found in the member’s My NYCERS account or Annual Disclosure Statement.

SPECIAL OCCUPATIONAL TITLES

Titles eligible for special retirement plans which allow early retirement, e.g., Transit 25/55 Plan, Sanitation 20-Year Plan.

TIERS

Different levels of pension benefits based on membership date and/or title.

TRANSFERRED SERVICE

Where an active membership in a public employee retirement system in New York State is transferred to (and combined with) another membership in a different public employee retirement system in New York State.

UNION LEAVE SERVICE

Service granted to a member who is on an authorized leave of absence without pay to conduct labor relations activity on behalf of a public employee union.

UNPAID LEAVE

A leave of absence during which a member does not receive wages from his or her employer. Generally, members may not receive Credited Service for periods of unpaid leave.

VESTED MEMBER

A member who has met or exceeded the minimum service requirements for his or her retirement plan, but who is no longer employed with the City of New York or a Participating Employer.

VESTING

A member’s right to receive future plan benefits after completion of minimum service requirements, even if the member discontinues employment prior to reaching the age for service retirement.

WAGE EXCLUSIONS

Certain wages excluded from the calculation of Final Average Salary, including wages in excess of an overtime ceiling indexed annually to the Consumer Price index.

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