Active Members' Handbook
Benefits

 

Your tier of membership, service credit, age and earnings are factors that determine your eligibility for benefits while you’re working, as well as those you will receive in retirement. Members generally will apply for a service retirement benefit. However, if you become disabled and cannot continue to work, you may qualify for a disability retirement benefit.

When you become eligible, your benefits are subject to automatic cost-of-living adjustments. If you die before your retire, a death benefit may be paid to your beneficiary(ies) (see In-Service Death Benefit below).

Projections of your benefits are shown in your Benefit Profile, mailed to you annually. Remember, you can also visit the Secure Area of our Web site to access your Profile at any time.

Service Retirement Benefit
Eligibility
Under all tiers you may retire if you are at least age 55 with 5 years or more of credited New York State service. (Tier 1 members may retire at any age with 35 years of service, or at age 55 with less than 5 years, if two years are credited since age 53.)
Pension Calculation Formula
Your Maximum annual pension is determined by the following formula:
Pension Factor (x Age Factor for Tiers 2, 3 and 4) x Final Average Salary = Maximum Annual Pension
Pension Factor
A percent based on your years and months of service credit. The percent increases with additional service in most cases (see Pension Calculations below).
Age Factor
A percentage of the pension factor for Tier 2, 3 and 4 members who retire earlier than age 62 with less than 30 years of service credit.
Final Average Salary (FAS)

The average of your highest three consecutive years of salary earned whenever they occurred in your salary history. Typically, it is the average of your last three years. Tier 1 members are eligible for an alternative five-year FAS.
The Three-Year FAS is available to all tiers and can include payments for:  
Full-time teaching services (e.g., regular compensation);
Coaching;
Tutoring;
Summer school;
Chaperoning;
Workshops;
Driver education;
Supervision of traditional after-school clubs; and,
Teaching or administration of educational after-school programs.
The Three-Year FAS cannot include: 
Non-regular compensation (e.g., bonuses, taxable fringe benefits, payments in lieu of health insurance);
Employer contributions into a tax shelter account;
Payments made outside contract terms;
Payments made on the eve of retirement;
Buyouts;
Payments for services ordinarily performed by classified positions, consultants, or independent contractors;
Payments used to purchase health insurance through the district;
Pay for duties not reasonably incidental to that of an administrator or full-time teacher (e.g., bus driver, district clerk, clerk of the board, school attorney); or,
Compensation for computer maintenance, master teacher presenter, or similar roles.
Also excluded from the three-year FAS calculation are yearly increases in regular salary exceeding the following limits:
Tier 1—20% of the previous year’s salary.
Tier 2—20% of the average of the previous two years’ salaries.
Tiers 3 and 4—10% of the average of the previous two years’ salaries.
The Five-Year Final Average Salary is available to Tier 1 members only and:  
Will be used automatically if it is higher than the three-year FAS;
Cannot include payments made to secure your resignation or artificially inflate your FAS; and,
Cannot include payments not otherwise reportable to NYSTRS, including (but not limited to):
Payments made outside the terms of a collective bargaining agreement or long-standing employment agreement.
Buyouts.
Payments for services ordinarily performed by persons in the classified service, or by consultants or independent contractors.
Payments to a member for the purchase of health insurance through the district.
Earnings from titles such as bus driver, computer maintenance worker, district clerk, clerk of the board, school attorney, legal consultant or master teacher presenter.
Additionally, if your date of membership is prior to June 17, 1971, the following apply to the five-year FAS:
You are not subject to the salary increase limits of the three-year FAS. (Those with a date of membership of June 17, 1971 or later are subject to the limits.) 
You can include termination payments provided (1) they are contained in a collective bargaining agreement or a long-standing employment agreement and (2) they are made by the end of the calendar year of retirement. Termination payments include local retirement incentives, longevity payments that are not part of your salary and payments for unused leave.
If your date of membership is prior to July 1, 1973, non-regular compensation is includable in a five-year FAS calculation. Non-regular compensation includes (but is not limited to):
Taxable fringe benefits;
Bonuses; and,
Payments in lieu of health insurance.
Pension Calculations
Tiers 1 and 2
Step 1—Determine the Pension Factor
Tier 1
Service Credit   Pension Factor
NYS service before July 1, 1959
=
 1.8% per year
NYS service on or after July 1, 1959
=
 2.0% per year
Out-of-state service
=
 1.0% per year
 
Your pension factor is reduced by 5% for every year less than 20 years of NYS service, not to exceed 50%. (The percent is prorated by month.)
 
For example: For 15 years of service, you would receive 75% of the pension factor.
 

15 years x 2% = 30%
30% x 75% (100% - 25%)

 = 22.5%  
 
By achieving 20 years, the pension factor without reduction is:
20 years x 2% (no reduction) 		= 40.0%  
 
 
Tier 2
Use the same formula as Tier 1, unless you retire prior to age 62 and have less than 30 years of service. In this case, you will receive a percentage of the Tier 1 pension factor based on your age at retirement as follows: (The percent is prorated by month.)
Age
Percent
  
Age
Percent
55
73%
59
85%
56
76%
60
88%
57
79%
61
94%
58
82%
62
100%
 
For example: For 29 years of service after July 1, 1959, you would receive 73% of the pension factor at age 55:
 
29 years x 2% = 58%
58% x 73% (age 55 percent)		 = 42.3%  
 
By achieving 30 years, the pension factor without reduction is:
30 years x 2% (no reduction)		 = 60.0%  
 
Prior to passage of Benefit Enhancement (Article 19) legislation, the maximum pension factor for Tier 1 and 2 members was typically 75%. However, Tier 1 and 2 members eligible for additional credit under Article 19 can increase their pension factor as high as 79%. Tier 1 members with a date of membership prior to 7/1/1970 who have a minimum of 43 years and six months of post-1959 service can have a pension factor that exceeds 79%.
Step 2—Compute the Final Average Salary
Either a three-year FAS or a five-year FAS, as described in the Final Average Salary section above, whichever is higher.
Step 3—Calculate the Pension
Multiply pension factor (Step 1) by FAS (Step 2). This is your Maximum annual pension, paid to you in monthly payments. At retirement, you choose either the Maximum benefit or an option that could provide a payment to your beneficiary (see Benefit Payment Choices below).
Annuity Savings Fund (ASF)—Tiers 1 and 2 Only
If you have an ASF (see Tiers 1 and 2—Annuity Savings Fund), you have two choices at retirement:
1. You can leave it in the System, in which case it will provide you with an annuity return as part of your retirement benefit. This payment will be in addition to your pension. Any portion of the ASF previously taxed will be returned to you tax-free over your lifetime. The federal 1099-R Form, the retiree version of a W-2 Form, sent to you each January will indicate which portion of your benefit is tax free.
2.

You can withdraw it at retirement and have the funds available to you immediately for private investment or other purposes. If you withdraw your ASF, your NYSTRS retirement benefit will consist only of your pension. The taxable portion of the ASF withdrawal becomes subject to federal income tax immediately, unless rolled over into an IRA or other qualified plan at retirement.
   
Tiers 3 and 4, calculated under Tier 4 (Article 15)
[Tier 3 members also see Pension Calculation—Tier 3, calculated under Tier 3 (Article 14) below.]
Step 1—Determine the Pension Factor
Service Credit
Pension Factor
Less than 20 years
=
 1 2/3% per year
20 to 30 years
=
 2% per year for all service
30 or more years
=
 60% plus 11/2% for each additional year over 30 years
If you retire prior to age 62 and have less than 30 years of service, you will receive a percentage of the pension factor based on your age at retirement as follows: (The percent is prorated by month.)
Age
Percent
  
Age
Percent
55
73%
59
85%
56
76%
60
88%
57
79%
61
94%
58
82%
62
100%
The following examples show how working one more year and attaining 20 years of service (when all years are at 2%) and 30 years of service (when there is no age reduction) will significantly increase your pension factor:
Attaining 20 Years
At age 55: 19 years x 12/3% = 31.6%
  31.6% x 73% (percent at age 55)
=
 23.1%  
At age 56: 20 years x 2% = 40%
  40% x 76% (percent at age 56)
=
 30.4%  
         
Attaining 30 Years
At age 55: 29 years x 2% = 58%
  58% x 73% (percent at age 55)
=
 42.3%  
At any age: 30 years x 2%
  (no age reduction)
=
 60.0%  
Step 2 —Compute the Final Average Salary
Use the three-year FAS, as described in the Final Average Salary section above.
Step 3 —Calculate the Pension
Multiply pension factor (Step 1) by FAS (Step 2). This is your annual Maximum retirement benefit paid to you in 12 monthly payments. At retirement, you choose the Maximum benefit or an option that could provide payment to your beneficiary (see Benefit Payment Choices below).
Tier 3, calculated under Tier 3 (Article 14)
Because of the improvements in Tier 4, to which all Tier 3 members are entitled, the Tier 3 (Article 14) benefit calculation described below would be to a Tier 3 member’s advantage only in a small number of cases. Where one calculation is obviously better, you will automatically receive that benefit. Otherwise, the System will provide you with the information to help you make your decision.  
Step 1—Determine the Pension Factor
Service Credit
Pension Factor
Less than 20 years
=
 1 2/3% per year
20 to 30 years
=
 2% per year for all service
30 or more years
=
 60% maximum pension factor
If you retire prior to age 62 and have less than 30 years of service, you will receive a percentage of the pension factor based on your age at retirement as follows: (The percent is prorated by days.)
Age
Percent
  
Age
Percent
55
70.0%
59
83.3%
56
73.3%
60
86.7%
57
76.7%
61
93.3%
58
80.0%
62
100.0%
Your benefit is reduced at age 62 (or immediately if you retire after age 62) by half of the Social Security benefit you accrued while in New York State public service.
If you retire after age 62 and 1 month, your benefit is subject to automatic escalation each year. If you retire before 65, adjustments are applied on a prorated basis.
These provisions do not apply to Tier 4 members or to Tier 3 members who retire under Article 15/Tier 4.
Steps 2 and 3 are the same as the Tier 4 calculation.
Disability Retirement Benefit
If you are no longer able to work because of a serious illness or injury, contact the System as soon as possible at (800) 348-7298, Ext. 6010. (You can find additional information in the NYSTRS pamphlet If You Are No Longer Able to Work: A Guideline for Making Decisions About Disability Retirement, which is also available on our Web site.) We will provide you with information and instructions on how to file for disability retirement, as well as estimates of your benefits. If you are critically ill, you should file for disability retirement immediately. 
Eligibility
Tiers 1 and 2
You must have an active membership and at least 10 years of New York State service credit (Tier 2 members must have at least five of the 10 years of service since last becoming a member), AND
Be totally and permanently incapacitated from further teaching service, AND
Cease teaching because of the disability.
Tiers 3 and 4 (Article 15)
You must have an active membership and at least 10 years of New York State service credit (the 10-year requirement is waived if the disability resulted from an accident sustained in the performance of your teaching duties), AND
Cease teaching because of the disability, AND
Be totally and permanently incapacitated from all further gainful employment, AND
File a disability application with NYSTRS within 12 months of the last date you were on the payroll. If you are placed on leave of absence without pay for medical reasons, you may file a disability application no later than 12 months after the date you receive notice that your employment status has been terminated.
Disability Retirement Benefit Calculation
For All Tiers
A disability retirement benefit is generally 1/3 of your final average salary. However, the benefit may be more or less depending on your age and service credit. For an estimate of your disability retirement benefit, please refer to your most-recent Benefit Profile, or contact the System.
In-Service Death Benefit
Eligibility
You are covered by an in-service death benefit if you have been credited with at least three months (Tier 1) or one year (Tiers 2, 3 and 4) of service since last becoming a member, and at the time of death:
You were in service being paid for employment reportable to this System, OR
If you are a Tier 1 member, you had been in service within the previous year and had not otherwise been gainfully employed (other than in service reportable to NYSTRS) since leaving teaching, OR
If you are a Tier 2, 3 or 4 member, you had been in service within the previous year and had at least one year of continuous employment since last entering your employer’s service and had not otherwise been gainfully employed (other than in service reportable to NYSTRS) since leaving teaching, OR
You had left the payroll because of a disability and had remained disabled until death (Tier 1) or died while on an approved medical leave (Tiers 2, 3 and 4).
Tier 1 Calculation
The greater of the following:
1/12 of your last 12 months of regular compensation for each year of service, to a maximum of three times your earnings, OR
The Death Gamble Benefit. Please contact us at 800-348-7298, Ext. 6110 for more information. (Note: To be eligible for this increased benefit, you must be eligible to retire without any service credit-related reductions in your pension.)
Tier 2, 3 and 4 Calculation—Paragraph 2
Under legislation enacted in 2000, all Tier 2, 3 and 4 members will be covered by the Paragraph 2 Death Benefit, unless they selected Paragraph 1 (see Tier 1 Calculation above) and it is greater than Paragraph 2. All members joining on or after January 1, 2001, will be covered by the Paragraph 2 Death Benefit.
The benefit is one year’s salary after a year of service, increasing to a maximum of three years’ salary after three years or more of service. However, the benefit is reduced after age 60.
Under Paragraph 2, if the in-service death benefit is in effect when you retire, it continues after retirement. The benefit would be:
1st Year—50% of the death benefit in effect at retirement;
2nd Year—25% of the benefit at retirement; and,
3rd & Ensuing Years—10% of the benefit at age 60, or at retirement if earlier.
To be eligible for the continued coverage in retirement, you must retire no later than one year after you leave the payroll. Gainful employment, other than teaching, between the date you ceased teaching and the date of retirement will jeopardize your eligibility for this benefit.
Other Death Benefits
Tiers 3 and 4 Accidental Death Benefit
If you die as the result of an accident sustained in the performance of your duties, certain surviving family members may be entitled to receive an accidental death benefit in lieu of an in-service death benefit. The annual payment to your beneficiary would be 50% of the regular salary earned during your last year of service.
Vested Death Benefit
You are covered by this benefit if you have at least 10 years of service credit, are not covered by the in-service death benefit, and die before retirement. It would equal one-half of the in-service death benefit that would have been paid if you had died on the last day of creditable service.
Accelerated Death Benefit
You may elect to receive a one-time only payment while living if you qualify for a disability retirement benefit (the 10 years service credit requirement is waived) and have either a terminal illness resulting in a life expectancy of no more than 12 months or a medical condition requiring extraordinary care or treatment. The benefit is paid in lieu of both a monthly retirement benefit and a death benefit paid to a beneficiary.
The payment is equal to the death benefit if you had died on your last day of reportable service. It may be an important benefit if you don’t have the need to provide for a beneficiary, or if you have less than 10 years of service credit and would not otherwise be eligible for a disability retirement.
Benefit Payment Choices
At retirement you will choose either the Maximum benefit or an option. There are many factors you should consider, including your needs and goals and those of your beneficiary(ies); other sources of income; your health and age at retirement; and, the need for flexibility of coverage. You should begin planning early and carefully analyze the choices before you make your final decision.
The Maximum benefit provides the largest monthly payments to you for life, but provides no payment to a beneficiary except as may be provided by the Paragraph 2 Death Benefit (Tiers 2, 3 and 4 only).  
An option is designed to provide a payment to a beneficiary at your death. However, selecting an option means a lower monthly benefit for you. Much like life insurance, the greater the protection an option provides your beneficiary, the greater the cost of the option to you. The cost of the option is calculated using actuarial factors, and your monthly benefit will reflect that cost.  
No matter which choice you make, there are a few certainties:
Your payments continue until your death, without exception.
You cannot change your benefit payment choice more than 30 days after your retirement date. This holds true even if your circumstances change.

Lump Sum Options

Tier 1 Declining Reserve: The balance of your total reserve (the pension reserve and any Annuity Savings Fund) will be paid to your beneficiary(ies) if you die before you receive the total reserve. If you have a life-threatening illness, consider choosing the Declining Reserve (4%) since it provides the largest payment to your beneficiary if you die early in retirement.
Tiers 1 and 2 Annuity Reserve: If you have an Annuity Savings Fund and leave it in the System at retirement, the balance will be paid to your beneficiary(ies) if you die before you receive it yourself.
Largest Non-Declining Lump Sum: This option enables members to provide the largest possible fixed payment to a beneficiary. It is not available to Tier 3 members retiring under Article 14 (Tier 3).

By selecting a Lump Sum Option, you may name multiple primary and/or contingent beneficiary(ies) who may be changed at any time.

 
Guarantee Period Options  
If you die during the first 5 or 10 years in retirement, depending on which option you select, your beneficiary receives your benefit for the balance of the 5- or 10-year period. Beyond those periods, there is no beneficiary payment.  
Under these options, you may name one primary beneficiary and multiple contingent beneficiary(ies) who may be changed at any time.  
Survivor Options (Without the Pop-up Feature)  
If you select one of these options:
You name one beneficiary only.
When you die, your beneficiary receives a percentage of your benefit for life. Your benefit will not change if you survive your beneficiary.
Your beneficiary must be named no later than 30 days after your date of retirement and can never be changed.
Under these options, a surviving spouse is eligible for 50% of the Cost-of-Living Adjustment (COLA) the retiree would have received.
 
Pop-Up Survivor Options  
The same as the Survivor Options, except that if you survive your beneficiary, your payment reverts to the Maximum benefit after we receive a copy of your beneficiary’s death certificate.  
Alternative Option  
This allows you to modify existing options to meet your specific needs. For example, you can establish a fixed annual payment, or a monthly income, to be paid to your beneficiary(ies). An Alternative Option must be approved by the Retirement Board.