Most members of the New York State and Local Employees’ Retirement System (ERS) and many members of the New York State and Local Police and Fire Retirement System (PFRS) are required to contribute a percentage of their earnings toward their retirement.
NYSLRS pensions are defined benefit plans, which means you will receive a lifetime pension based on your years of service and earnings. Your pension will not be based on the contributions you paid into the system. However, member contributions support the benefits earned by current and future retirees and are an important asset of the Common Retirement Fund.
Your contribution balance determines the amount you would be eligible to borrow if you decided to take a NYSLRS loan. Also, if you were to die in service, the balance would be paid to your beneficiary, in addition to any death benefit your beneficiary is eligible for.
ERS Tier 3, 4, 5 and 6 and PFRS Tier 3 (Article 14) member contributions earn 5 percent annual interest.
Tier 1 and 2, PFRS Tier 3 (Article 11) and PFRS Tier 5 and 6 member contributions earn up to 5 percent interest — 3 percent guaranteed, plus up to an additional 2 percent based on the earnings of the Common Retirement Fund, which holds and invests the money used to pay NYSLRS benefits.
Tier 6 ERS and PFRS
Most Tier 6 members contribute a specific percentage of their earnings (see chart below) for all their years of public service after their date of membership. If you are a Tier 6 member, during the first three years of membership, your contribution rate is based on your annual wage, as provided by your employer at the time you were enrolled in NYSLRS. For part-time employees, your contribution rate is based on an annualized wage, also provided by your employer, but your contribution amount is determined by applying your rate to your actual earnings. After three years, your contribution rate is based on what you actually earned in all public employment two years prior. Contribution rates are set at the beginning of each fiscal year on April 1.
| Annual Wage | Contribution Rate |
|---|---|
| $45,000 or less | 3.00% |
| $45,000.01 to $55,000 | 3.50% |
| $55,000.01 to $75,000 | 4.50% |
| $75,000.01 to $100,000 | 5.75% |
| More than $100,000 | 6.00% |
Exceptions for ERS:
- New York State Correction Officers’ contributions are limited to 30 years of service.
Exceptions for PFRS:
- Tier 6 members enrolled in a retirement plan limiting the amount of creditable service they may accrue will not be required to contribute once they reach the maximum amount of service allowed by their plan.
- If a union-negotiated collective bargaining agreement in effect on January 9, 2010 requires an employer to offer a noncontributory 20- or 25-year plan, any new employees who join while that agreement was in place do not have to contribute.
Overtime Pay Temporarily Excluded from Tier 6 Contribution Rates1
A new law temporarily excludes overtime pay earned from April 1, 2022 through March 31, 2024 from the calculation of Tier 6 contribution rates. This may lower contribution rates for some Tier 6 members from April 1, 2024 through March 31, 2026.
Who is Affected by the Change to Tier 6 Contribution Rates?
As a Tier 6 member, you may have your contribution rate lowered if:
- You make mandatory contributions toward your retirement (most Tier 6 members); and
- You earned overtime from April 1, 2022 through March 31, 2024.
The rate decrease will not apply if:
- You already pay the minimum rate of 3 percent;
- You did not earn overtime from April 1, 2022 to March 31, 2024; or
- You joined NYSLRS on or after April 1, 2022. Your rate is based on an estimated wage provided by your employer when you were enrolled into NYSLRS rather than your actual earnings.
When Will Tier 6 Contribution Rates Be Updated?
Contribution Rates for April 1, 2024 through March 31, 2025
If we had detailed information on file from your employer, we reviewed your earnings for April 1, 2022 through March 31, 2023 and recalculated your contribution rate for April 1, 2024 to March 31, 2025. If your contribution rate was lowered, we notified your employer and directed them to use the updated rate moving forward through the end of the current state fiscal year, March 31, 2025. We also sent you a letter notifying you of the change.
If we did not have detailed information on file, we requested a breakdown of your earnings from your employer. We are currently in the process of reviewing the information we received and all contribution rates for the current fiscal year will be recalculated by mid-March. If your contribution rate is lowered, we will send you a letter notifying you of the change.
If you overpaid your contributions during this state fiscal year, you may be due a refund.
- If you are due a refund, we will send you another letter notifying you of the amount. Your employer will then issue the refund to you. No action is required on your part.
- If you are not due a refund, you will not receive another letter from NYSLRS.
Contribution Rates for April 1, 2025 through March 31, 2026
When reviewing your earnings for April 1, 2023 through March 31, 2024 to calculate your contribution rate for April 1, 2025 to March 31, 2026, we will exclude overtime pay from the calculation of your contribution rate. Therefore, we will not need to recalculate rates or issue refunds again, and there is no action required on your part.
Tier 5 ERS
You must contribute 3 percent of your gross reportable earnings for all your years of public service.
Exceptions:
- New York State Correction Officers’ contributions are limited to 30 years of service.
- Uniformed Court Officers and Peace Officers employed by the Unified Court System must contribute 4 percent of their salary for all their years of public service.
Tier 5 PFRS
You must contribute 3 percent of your gross reportable earnings for all your years of public service.
Exceptions:
- Tier 5 members enrolled in a retirement plan limiting the amount of creditable service they may accrue will not be required to contribute once they reach the maximum amount of service allowed by their plan.
- If a union-negotiated collective bargaining agreement in effect on January 9, 2010 requires an employer to offer a 20- or 25-year plan, any new employees who join while that agreement is in place will not have to contribute.
Tiers 3 & 4 ERS
You must contribute 3 percent of your gross reportable earnings toward your retirement benefits until you have been a member of the Retirement System for ten years, or have ten years of credited service, whichever occurs first.
Tier 3 (Article 14) PFRS
You must contribute 3 percent of your gross reportable earnings for 25 years or until retirement, whichever occurs first.
Tiers 1 & 2 ERS and PFRS, and Tier 3 (Article 11) PFRS
You are not required to contribute if your employer offers a non-contributory plan.
If you are covered by a non-contributory retirement plan and have made voluntary contributions under Section 21(l) or 321(l), you may apply for a refund of those excess contributions plus interest. You may receive one refund of your excess contributions in a 12-month period. Withdrawing voluntary contributions does not terminate your Retirement System membership.
If you transfer your membership from another New York State or New York City public retirement system into NYSLRS, you may also have excess contributions. You should contact us at the time of transfer to find out the status of your contributions.
To apply for a refund of excess contributions, complete an Application for Refund of Excess Contributions (RS5195).
Contributions made under a contributory retirement plan or for the purchase of military service cannot be refunded as excess.
1Updated 2/25
Rev. 5/24