Retirement Incentives FAQs

We received hundreds of questions before and during the retirement incentives webinar held on June 24, 2010. Here we provide answers to the most commonly asked questions.

You may link to questions by topic:

• General Incentive Questions
• Chapter 45 Questions
• Chapter 105 – Part A Questions
• Chapter 105 – Part B Questions

General Incentive Questions

Q. Is there any special paperwork that members must file related to the incentives? 

A. Other than the Application for Retirement (RET-54) that members must file with NYSTRS, there is no other special paperwork that must be filed with NYSTRS for Chapter 45 or Chapter 105. However, members interested in retiring under Chapter 105 – Part A must notify their employer of their intent to file under the incentive at least 21 days prior to the end of their open period. Whether or not an employer requires additional paperwork related to this notification is a question for the employer.

Q. Where can I obtain a retirement application?

A. You can print an Application for Retirement (RET-54) from our Web site or call us at (800) 782-0289 to request that one be mailed to you. You can also obtain one from your employer. An Application for Retirement (RET-54) must be received by NYSTRS no more than 90 days before, and as late as the day of, retirement. If the application is mailed by registered or certified mail, it will be considered received by the System on the postmark date. Otherwise, it is deemed to be filed on the date we receive it.

Q. How can I obtain an estimate of my benefit under the incentives? 

A. In May, NYSTRS mailed out benefit estimates to members who appeared to be eligible for the Chapter 45 incentive.  By June 28, NYSTRS mailed out estimates to members who appeared to be eligible for the Chapter 105 – Part A or B incentives.  You can also obtain estimates several other ways:

• You can use our online pension calculator to calculate a benefit estimate yourself.
• You can request a benefit estimate by calling NYSTRS at (800) 348-7298, Ext. 6020 or by submitting a Retirement Benefit Estimate Request form online.
• You can receive a benefit estimate during a benefits consultation with a NYSTRS representative. You can schedule a consultation either by calling us at (800) 348-7298, Ext. 6100 or, if you have a MyNYSTRS account, through our Web site.

Q. Are substitutes eligible for the incentives?

A. Substitutes are generally not eligible for the incentives because they typically work on a daily basis and are not under contract. Therefore, they would generally not meet the incentive's eligibility requirement to have been in continuous active service since February 1, 2010. Long-term substitutes who were in continuous active service since that date may meet the eligibility requirement.

Q. Can my employer give me both a statewide incentive (Chapter 45 or 105) and a local retirement incentive?

A. You would ordinarily need to waive rights to your local incentive in order to receive the benefit of Chapter 105 – Part A.  However, your employer may choose to grant an exemption to the waiver. 

You do not have to waive your local incentive under either Chapter 105 – Part B or Chapter 45.

Q. What happens if I am eligible under more than one incentive?

A. If an employer declares a member eligible under both Part A and B of Chapter 105 (or the member is eligible for Chapter 45 and declared eligible under Part A and/or B), the member receives the better of the two benefits, not both. 

Q. Will my first benefit payment reflect the incentive?

A. No. We must verify eligibility and produce a final calculation before the incentive will be reflected in your benefit payments. We will retroactively pay you any money owed, above any payments you received, back to your date of retirement.

Important Note: Those retiring under Chapter 105 – Part A earlier than age 55 will not receive any benefit payments until their eligibility is verified because without the incentive they would not be eligible to retire until they turned 55. 

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Chapter 45 Questions

Q. Who is eligible for the retirement incentive provided under Chapter 45 of the Laws of 2010?

A. Tier 2, 3 and 4 members of either NYSTRS or the New York State and Local Employees Retirement System who hold a position represented by a recognized collective bargaining unit affiliated with NYSUT. Members of this defined population who are at least age 55 with at least 25 years of service as of the date on which they retire are eligible to retire without any reduction to their benefit. For Tier 2 members, the 25 years of service credit may include any service under Benefit Enhancement (Article 19).

In addition, eligible members must have been in active service with a participating employer from February 1, 2010 to the date immediately preceding the commencement of the open period. "Active service" means being paid on the payroll, or a leave of absence with pay, or on an approved leave without pay for no more than 12 weeks.

Q. What does Chapter 45 provide the member?

A. The incentive waives the benefit reductions that would otherwise apply to Tier 2, 3 and 4 members who retire before age 62 with less than 30 years of service. The Maximum pension under this incentive is calculated with the formula: 2% Pension Factor x Years of Service x Final Average Salary. See the FAS percentage chart for an approximation of what your pension would be under the retirement incentive.

Those age 62 or older, or those who have 30 or more years of service, gain no advantages from this incentive. Also, no additional service credit is granted under the incentive.

Q. When does the Chapter 45 filing period begin and end?

A. Eligible New York State public school employees would need to retire no earlier than June 1, 2010 and no later than August 31, 2010. State University of New York educational institutions and community colleges can establish their own 90-day enrollment windows, provided retirement occurs no later than December 31, 2010.

Q. How do I know if my position is represented by a recognized collective bargaining unit affiliated with NYSUT?

A. Any questions regarding recognized collective bargaining units and/or their affiliation with the New York State United Teachers must be directed to NYSUT's Member Records Department at (800) 342-9810.

Q. Does my employer have to elect to participate in Chapter 45?

A. No. Participation is mandatory. For educational employers the retirement incentive is legislatively mandated for the period June 1, 2010 through August 31, 2010. "Educational employers" do not include State University of New York educational institutions and community colleges. Those employers must establish their own 90-day enrollment windows, provided retirement occurs no later than December 31, 2010.

Employers are required to certify members' eligibility to retire under the incentive. NYSTRS has sent employers the necessary forms to confirm employee eligibility.

Q. What must I do to retire under Chapter 45?

A. NYSTRS members eligible for retirement under Chapter 45 need only file a retirement application with the System indicating a date of retirement falling within your employer's open window. The Application for Retirement (RET-54) must be received by NYSTRS no more than 90 days before, and as late as the day of, retirement. If the application is mailed by registered or certified mail, it will be considered received by the System on the postmark date. Otherwise, it is deemed to be filed on the date we receive it.

Q. What is the latest on the Chapter 45 lawsuit?

A. The appeals process to the Chapter 45 retirement incentive has ended. On January 20, the Appellate Division of New York's Supreme Court affirmed the earlier ruling of the New York Supreme Court that Chapter 45 of the Laws of 2010 is constitutional.  (Read the Appellate Division's decision in PDF format.) Plaintiffs did not apply for permission to appeal that decision to New York's Court of Appeals within the required timeframe. That means the Chapter 45 incentive will continue to be administered as written. 

Eligible members who attained age 55 and had at least 25 years of service credit and retired during the Chapter 45 open period will receive, upon completion of final processing (refer to our Benefit Payment Information), an unreduced benefit, provided the member was in a position represented by a recognized, NYSUT-affiliated collective bargaining unit. (For additional eligibility requirements, see the Chapter 45 Fact Sheet.)

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Chapter 105 – Part A Questions

Q. Who is eligible for Part A of Chapter 105 of the Laws of 2010?

A. First and foremost, your employer must elect to offer Part A through adoption of a resolution by its governing authority. The resolution may target only certain employees/positions as eligible and an open period of 30-90 days in length must be specified.

If your position is targeted by your employer, the other eligibility criteria are as follows:

• You must be age 50 or older with 10 or more years of service, or age 55 or older with at least 5 years of service, or Tier 1 with 35 years of service.

• You must have been in active service on February 1, 2010, and remained in continuous active service through June 2010 or the date immediately prior to the commencement of the open period established by your employer. "Active service" means being paid on the payroll, or a leave of absence with pay, or an approved leave of absence without pay not to exceed 12 weeks.

• You must notify your employer of your intent to file under the incentive at least 21 days prior to the end of the open period.

• You must file a retirement application with NYSTRS specifying a date of retirement within the established open period. 

• You may not participate in Chapter 105 – Part B or Chapter 45 of the Laws of 2010.

Chief Administrative Officers are not eligible for this incentive.

Q. When does the Part A filing period begin and end?

A. Eligible New York State public school employees, including those employed by BOCES and participating charter schools, would need to retire no later than August 31, 2010. Employers have until July 30, 2010 to offer the incentive.

Employees of SUNY, community colleges, or the Fashion Institute of Technology would have to retire within the 90-day window established by the employer, but no later than December 31, 2010. These employers must decide whether or not to offer the incentive by August 31, 2010.

Employees of the New York State School for the Blind, the New York State School for the Deaf, and the Education Department would need to retire by September 30, 2010. These employers have until August 31, 2010 to decide if they will offer the incentive.

Q. What does Part A provide the member?

A. Under Part A, eligible members will receive 1/12 of a year of retirement credit for each year of service (excluding Article 19 service) to a maximum of 36 months of additional service. In general, the pension factor limitation for Tier 1 and 2 members is 85% under this incentive.

Q. Are there any penalties or reductions to consider under Part A?

A. Tier 1 members with less than 35 years of total service and Tier 2, 3 and 4 members with 30 or more years of service will have their pensions reduced by 5% for each year of retirement preceding age 55. Tier 2, 3 and 4 members with less than 30 years of service will have their retirement reduced by 6% for each year retirement precedes age 62, and by 3% for year retirement precedes age 60. All reductions are prorated. Tier 3 members must retire under Tier 4.

Q: Under Chapter 105 –Part A, do you get one month of credit or 1/12th of a year of credit for each year of service credit you have?

A: Because 9 months of full-time equivalent service in a school year = one year of credit for NYSTRS members, you would receive 1/12th of a year of credit for each year of service. To get the maximum three additional years of credit under Part A, you would need to have 34 years, 7 months of service. See the Part A Incentive Credit chart for additional conversions.

Q: If I am a Tier 1 or 2 member, does Article 19 credit count toward the Part A incentive?

A: While your pension calculation will include any Article 19 credit you have, the calculation of your incentive credit will not. It is based on your total service credit less your Article 19 credit. So, we first calculate your incentive credit based on your service credit without Article 19. We then add the incentive credit to your service credit with Article 19 to determine your pension factor.

Q. If I have less than 30 years of service, but the extra credit under Part A would give me more than 30 years, would I still have an age reduction for retiring before age 62 with less than 30 years of service?

A. No. Since the extra credit would put you over the 30-year threshold, your pension calculation would not include an age reduction. If the incentive credit puts you over an important threshold like this, it could mean a dramatic increase in your benefit. That's a good thing for you, but expensive for the district since they have to pay the actuarial cost of the improved benefit.

Q. What must I do to retire under Part A?

A. Unless it is your intention to retire with or without the incentive, do not file an application for retirement until your employer officially elects the retirement incentive and you have been notified your position has been targeted. Applications received by NYSTRS prior to the adoption of the incentive by the employer will be processed without the incentive.

When you do file, the Application for Retirement (RET-54) must be received by NYSTRS no more than 90 days before, and as late as the day of, retirement. The date of retirement must fall within the open period elected by your employer.

If the application is mailed by registered or certified mail, it will be considered received by the System on the postmark date. Otherwise, it is deemed to be filed on the date we receive it.

Q. My district says that even if they end up electing Part A, they would not offer it to everyone who is eligible because it would not make good business sense. Can you explain this?

A. By law, employers participating in Chapter 105 – Part A have to show a 50% aggregate cost savings in the first two years for the positions they target. At the same time, they want to make sure they are still staffed appropriately after their members retire, so they have to make their decisions very carefully. Depending on the salaries involved, they may or may not be able to replace all the positions and still meet the required 50% aggregate cost savings. For example, if Bob has been at the district for 35 years and is at the top of the salary schedule, the district could target Bob's position. If he retires, the district could replace him with Billy who just graduated and can be brought on at a fraction of Bob's salary. But there are situations where the district may not be able to achieve such savings. In cases like that, the districts may not be able to replace each member who retires under the incentive.

Q. If I retire under Chapter 105 – Part A, would I still be able to receive the payment for my accumulated sick days?

A. Yes, as long as that payment is in the negotiated contract, available to other employees, and not a condition of your retirement. This differs from a local retirement incentive, which you would not be eligible to receive unless your employer chooses to grant an exemption to the waiver. 

Q. I'm reluctant to file for retirement now because I'm afraid if I do, my district might later offer the Chapter 105 incentive but not offer it to me. Do you have any recommendations as to what I should do?

A. That is definitely a tough choice that members face. While the decision must be made on an individual basis and NYSTRS cannot provide advice, we can share these facts to consider: 

• By its very nature, a retirement incentive is designed to entice employees to retire who otherwise wouldn't. If you retire and your district later decides to offer Chapter 105 – Part A, there would no longer be a need to entice you to retire, so there's a good chance the incentive would not be offered to you.
• On the other hand, it's important to note that filing for retirement is not retroactive. If you hold off retiring until you see what your district will decide, you will forfeit your retirement benefit for the period you otherwise would have been retired.

Each member must weigh these considerations and make the best choice they can under the circumstances.

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Chapter 105 – Part B Questions

Q. Who is eligible for Part B of Chapter 105 of the Laws of 2010?

A. First and foremost, your employer must elect to offer Part B through adoption of a resolution by its governing authority. In that case, all members working for that employer who meet the eligibility requirements can file for retirement within the 90-day open period designated by the employer. The other eligibility criteria are as follows:

• You are a Tier 2, 3 or 4 member who is at least age 55 and credited with a minimum of 25 years of service but less than 30 years (including Article 19 for Tier 2 members). 

• You were in active service on February 1, 2010, and have remained in continuous active service to June 2010 or to the date immediately prior to the commencement of their open period.  "Active service" means being paid on the payroll, or a leave of absence with pay, or on an approved leave without pay not to exceed 12 weeks.

• You must file a service retirement application with NYSTRS up to 90 days before your effective date of retirement, or as late as your date of retirement. The date of retirement must be during the open period set by the employer, as described above.

• You may not participate in Chapter 105 – Part A or Chapter 45.

Chief Administrative Officers are not eligible for the incentive.

Q. When does the Part B filing period begin and end?

A. Eligible New York State public school employees, including those employed by BOCES and participating charter schools, would need to retire no later than August 31, 2010. Employers have until July 1, 2010 to offer the incentive.

Employees of community colleges and the Fashion Institute of Technology would have to retire within the window established by the employer, but no later than December 31, 2010. These employers must decide whether or not to offer the incentive by September 1, 2010.

Employees of SUNY, the New York State School for the Blind, the New York State School for the Deaf, and the Education Department would need to retire within the window established by the employer, but no later than September 30, 2010. These employers must decide whether or not to offer the incentive by September 1, 2010.

Q. What does Part B provide the member?

A. The incentive waives the benefit reductions that would otherwise apply to Tier 2, 3 and 4 members who retire before age 62 with less than 30 years of service. The Maximum pension under this incentive is calculated with the formula: 2% Pension Factor x Years of Service x Final Average Salary. See the FAS percentage chart for an approximation of what your pension would be under the retirement incentive.

Those age 62 or older, or those who have 30 or more years of service, gain no advantages from this incentive. Also, no additional service credit is granted under the incentive.

Q. Are there any penalties or reductions to consider under Part B?

A. No.

Q. Can I retire under Part B and still take advantage of a local incentive?

A. Yes. There is no requirement under Part B to waive local retirement incentives. Payments for unused sick leave or vacation available under the provisions of your collective bargaining agreement may also be paid.

Q. What must I do to retire under Part B?

A. NYSTRS members eligible for retirement under Part B need only file a retirement application with the System indicating a date of retirement falling within your employer's open window. The Application for Retirement (RET-54) must be received by NYSTRS no more than 90 days before, and as late as the day of, retirement. If the application is mailed by registered or certified mail it will be considered received by the System on the postmark date. Otherwise, it is deemed to be filed on the date we receive it.

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