Your Maximum annual pension is determined by the following formula:
Pension Factor x Age Factor (if applicable) x Final Average Salary = Maximum Annual Pension.
Pension Factor
Tiers 1 and 2
Your pension factor equals the sum of: a) 1.8% per year of credit for NYS service before 1959, and b) 2% per year for NYS service after 1959, and c) if eligible*, 1% per year for prior out-of-state service, as long as this service does not bring your total service above 35 years. The maximum pension factor is generally 79% (which includes 4% for two years of credit under Benefit Enhancement/Article 19).
If you are a Tier 1 or Tier 2 member, the pension factor is reduced by 5% for each year your New York State service totals less than 20 years.
If you are a Tier 2 member and retire before age 62 with less than 30 years of service, the pension factor is also reduced based on your age at retirement.
*All Tier 1 members are eligible for a maximum of 10 years of credit for out-of-state public school teaching prior to joining NYSTRS, provided a benefit for this service will not be paid by another state or the federal government. Tier 2 members can only receive credit for out-of-state service if it was credited under a previous Tier 1 membership in NYSTRS.
Tiers 3 and 4
Your pension factor equals either: a) 1⅔% per year if you have less than 20 years of service, or b) 2% per year if you have between 20 and 30 years of service. Under Tier 4, you would receive 1 ½% for each additional service year beyond 30.
If you retire before age 62 with less than 30 years of service, the pension factor is reduced based on your age.
If you are a Tier 3 member, you may retire under either Tier 3 or 4. You automatically receive the better benefit, which is usually Tier 4 because:
- Tier 3 benefits are reduced at age 62 (or immediately if you retire on or after age 62) by half the Social Security benefit you accrued in NYS public service;
- Tier 4 has better reduction factors if you retire before age 62 with less than 30 years of service; and,
- Your maximum pension factor is unlimited under Tier 4, but is limited to 60% under Tier 3.
Tier 5
Your pension factor equals either: a) 1 ⅔% per year if you have less than 25 years of service, or b) 2% per year if you have between 25 and 30 years of service. Under Tier 5, you would receive 1 ½% for each additional service year beyond 30.
If you retire prior to age 57 (regardless of how much service you have), or if you retire between ages 57-62 and have less than 30 years of service, the pension factor is reduced based on your age.
Tier 6
Your pension factor equals either: a) 1.67% per year if you have less than 20 years of service, or b) 1.75% per year for all service if credited with 20 years. Under Tier 6, you would receive 35% plus 2% per year beyond 20 years if credited with more than 20 years of service.
If you retire prior to age 63, you will receive a reduced benefit (without exception).
Age Factor
Depending on your age and service credit at retirement, an age factor may be applied to your benefit calculation.
No age reduction applies to Tier 2-4 members who retire either at: age 62 or later; or, at age 55 with at least 30 years of service credit.
No age reduction applies to Tier 5 members who retire either at: age 62 or later; or, at age 57 or later with at least 30 years of service credit.
No age reduction applies to Tier 6 members who retire at age 63 or later.
Final Average Salary (FAS)
For Tier 2-5 members, your FAS is generally the average of your highest three consecutive school years of salary earned, whenever they occurred in the salary history.
If you are a Tier 1 member, you are also eligible for a five-year FAS calculation, which (if you have a membership date before June 17, 1971) can include termination pay and non-regular compensation.
Tier 6 members must use a five-year FAS with restrictions on includable salaries.
Refer to the FAS section of the Active Members' Handbook for a complete explanation of what may be included in your FAS.