Member Contributions

Pension funding is a shared responsibility. Investment income provides the majority of NYSTRS pension funding. The remainder comes from employer and member contributions.

NYSTRS members make contributions as mandated by New York state law to help fund the pension. These 414(h) contributions earn 5% interest but do not provide a separate benefit. Mandatory member contributions are exempt from federal tax when deducted but are subject to New York state tax. 

Member contribution rates vary by tier.

• Tier 6 members are required to contribute a variable contribution rate, which is determined by their pensionable earnings, throughout their active membership. To learn how the rate is determined, read "How to Determine the Contribution Rate for Tier 6 Members" below.
• Tier 5 members are required by law to contribute 3.5% of their salary throughout their active membership.
• Tier 3 and 4 members were required to contribute 3% of their salary until they had either 10 years of membership or were credited with 10 years of service, whichever occurred first.

You can check your contribution rate in MyNYSTRS. Review the Active Members’ Handbook to learn more about contributions, membership and benefit eligibility.

How to Determine the Contribution Rate for Tier 6 Members

As noted above, Tier 6 members (those who joined NYSTRS on or after April 1, 2012) are required to make member contributions throughout their active membership. Their variable contribution rate is determined by the pensionable earnings reported to NYSTRS in accordance with the following schedule. 

From the Start Through the Third Year of Membership

Projected reportable earnings provided by the member’s employer are used to calculate the contribution rate for the first three years of membership. Thereafter, a lookback provision is used, which is discussed in more detail below. 

Tier 6 Contribution Chart

Beginning in the Fourth Year of Membership and Continuing Forward

Starting in the member’s fourth year of membership and continuing forward, the two-year lookback begins. This means that the member contribution rate in any given school year will be based on actual salary reported in the second preceding school year. It is NYSTRS’ responsibility to determine the applicable member contribution rate for each Tier 6 member and provide the information to the member’s employer. 

Given the effective date of variable member contribution rates for Tier 6 members, the following table will assist with understanding the employer projection and the two-year lookback provisions. The example below applies only to the 2022-2023 through 2027-2028 school years. Under Chapter 56 of the Laws of 2022 (extended in the Laws of 2024 and the Laws of 2026), the Tier 6 member contribution rate for the four school years ending June 30, 2023 through June 30, 2028 is based only on a member’s annual base wages from the lookback year. Compensation earned for extracurricular programs or other pensionable earnings will not be included in the contribution rate calculation for those years. 

Although the contribution percentage rate for those years will be calculated only on annual base wages, Tier 6 members must pay the applicable contribution rate on all of their pensionable earnings in those years.

Example: Contribution Rate Determination for Member With Date of Membership in 2022-2023 School Year

Note: Other than the school years ending June 30, 2023 through June 30, 2028, the two-year lookback is based on a member’s actual wages from the lookback year (i.e., the pensionable earnings posted to a member’s account as of the date the report is generated).

Pensionable Salary Limits and the Governor’s Salary

A Tier 6 member’s pensionable earnings may not exceed the salary of the New York State governor, which is set by law (see chart below). If the governor’s salary changes, the pensionable salary limit would change accordingly.

Governor's Salary

 
Once the pensionable salary limit is reached, contribution deductions from any wages paid in excess of the salary limit will stop. In other words, member contributions taken on salary that exceeds the earnings limit will be refunded. Additionally, any wages reported exceeding this limit will not be included in a member’s salary base for district billing purposes or in any benefit calculation.

Tier 6 Members With Service at Multiple Employers 

Contributions

For the first three years of employment when contribution rates are based on projected earnings, the rate for each school year will be established using the projected salary from the first of the member’s employers to report salary information to NYSTRS. As demonstrated in the previous example, beginning in the fourth year, the two-year lookback begins, and the contribution rate will be based on the total actual earnings the member received two years prior. 

Salary and Service

State law limits the amount of salary and service usable in a Tier 6 member’s benefit calculation. NYSTRS will collect and process the information for each school year from all employers before making any necessary adjustments. The following guidelines will apply:  

• If the member does not work full-time (defined as at least 200 days of service) for any one employer, all salary and service days from the various employers can be factored into the member’s pension calculation.  
• If the member works for multiple employers and exceeds 200 days of service with any one employer, the combined salaries from no more than two employers can be factored into the pension calculation. The pensionable salary and service will be determined by using the two highest earnings within that school year.
• BOCES district superintendents are considered to have multiple employers since their salary comes from both the State Education Department and their BOCES. Therefore, any part-time employment beyond a BOCES superintendent’s regular full-time employment will not be reportable to NYSTRS for use in pension calculations.

Additional Guidelines for All Tiers

• In all cases, members may not receive more than one year of service credit per school year (July 1 to June 30), even if they work more than 200 days.  
• Only salary that is considered pensionable is assessed for employer and member contributions.  
• NYSTRS will direct employers to refund any contributions deducted from salary deemed not pensionable at the end of the school year.