| Serving New York Educators Since 1921 |
Headlines
Governor, Legislature Establish Tier 5
Law Includes 'Legislative Intent' for 55/25 Retirement
Incentive in 2010
(Dec. 18, 2009) – Following months of speculation and negotiations, the New York State Legislature in early December approved the creation of a new tier of public employee membership. Governor Paterson signed the bill into law Dec. 10, 2009.
Under Chapter 504 of the Laws of 2009, anyone entering New York State service on or after Jan. 1, 2010, will belong to Tier 5. However, the rules of Tier 5 membership differ for NYSTRS members as compared to other public employees. Following is a comparison of the two, as well as a look at how they differ from Tier 4:
| Plan Provision | Tier 5 – NYSTRS | Tier 5 – ERS | Tier 4 |
| Vesting Eligibility | 10 years of service | 10 years of service | 5 years of service |
| Employee Contribution | 3.5% throughout active membership | 3.0% throughout active membership | 3.0% for first 10 years of membership or service |
| Prior Service Cost | 3.5% of salary plus interest | 3.0% of salary plus interest | 3.0% of salary plus interest |
| Normal Retirement Eligibility | Age 62 with 10 years of service | Age 62 with 10 years of service | Age 62 with 5 years of service |
| Unreduced Retirement (Prior to age 62) | At least age 57 with 30 or more years of service | None | At least age 55 with 30 or more years of service |
| Pension Factor | 2.0% begins at 25 years of service credit | 2.0% begins at 20 years of service credit | 2.0% begins at 20 years of service credit |
| Age Reductions (prorated by month - prior to age 62) | Age 55: .3833 Age 61: .0667 |
Age 55: .3833 Age 61: .0667 |
Age 55: .2700 Age 61: .0600 |
Also of particular interest to existing NYSTRS members, Chapter 504:
- Makes permanent a provision against diminishing the health insurance benefits of retired school district employees unless a corresponding decrease in active member benefits is also made; and,
- Includes the legislative intent to offer public educators a 55/25 retirement incentive in 2010. This would allow certain individuals age 55 and older with at least 25 years of service to retire with no reductions if retirement occurs within an established window. PLEASE NOTE: NYSTRS cannot provide 55/25 benefit estimates until a retirement incentive is enacted into law and the legislature establishes a window. Also, there is no provision that would allow retirement prior to age 55.
- Caps the amount of overtime that can be considered in the calculation of pension benefits at $15,000 per year.
For additional details on all 2009 legislation, visit the Legislation page.
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