What is a Partial Lump Sum (PLS) Payment?
A Partial Lump Sum (PLS) distribution is a single payment equal to a percentage of the value of your pension benefit at retirement. The payment amount depends on your eligibility and the percentage you choose.
If you choose to receive a PLS payment, your lifetime monthly benefit will be permanently reduced. You cannot repay the lump sum amount in the future to increase your monthly retirement benefit. Future cost-of-living adjustments (COLAs) will be based on the amount of your reduced lifetime benefit.
Eligibility for New York State and Local Police and Fire Retirement System (PFRS) Members
To be eligible to choose a PLS payment, you must:
- Be covered by a plan that allows for retirement after 20 or 25 years of creditable service, regardless of age;
- Be eligible to retire with a service retirement benefit for at least one year prior to your date of retirement; and
- Retire with a service retirement (not a disability retirement). If you receive a PLS payment under a service retirement benefit and later convert to a disability retirement, you must repay the PLS, possibly with significant tax consequences.
Eligibility for New York State and Local Employees’ Retirement System (ERS) Members
To be eligible to choose a PLS payment, your county employer must have adopted a resolution to provide this option to its eligible employees and you must:
- Be employed as a sheriff, undersheriff, deputy sheriff or county correction officer;
- Be covered by a plan that allows for retirement after 20 or 25 years of creditable service, regardless of age;
- Be eligible to retire with a service retirement benefit for at least one year prior to your date of retirement; and
- Retire with a service retirement (not a disability retirement). If you receive a PLS payment under a service retirement benefit and later convert to a disability retirement, you must repay the PLS, possibly with significant tax consequences.
Additional Information for Both PFRS and ERS Members
If you file for both a service retirement and a disability retirement at the same time, you can choose a PLS payment, however, the PLS payment will not be made until it is determined whether you are approved for the disability retirement benefit. If you are approved for the disability benefit and choose to take the disability benefit, you will not be eligible to receive a PLS. If you choose to continue with the service retirement benefit (or if you are not approved for the disability), the PLS will then be paid.
If your retirement benefit will be impacted by the provisions of a Domestic Relations Order (DRO), we must review the court order before a PLS payment can be made. If you have any questions, you or your legal representative should email our Matrimonial Bureau.
How Much Will I Receive?
A PLS payment is a percentage of the value of your retirement benefit at the time you retire.
The chart below outlines PLS payment percentages available to you based on the number of years you have been eligible to retire.
| Years you’ve been eligible to retire | PLS payment options, as a percentage of your retirement benefit |
|---|---|
| 1 | 5% |
| 2 | 5 or 10% |
| 3 | 5, 10 or 15% |
| 4 | 5, 10, 15 or 20% |
| 5 or more | 5, 10, 15, 20 or 25% |
To estimate how much you would be eligible to receive:
- Sign in to your Retirement Online account, and under “My Account Summary,” click “Estimate my Pension Benefit.” After you enter your basic retirement selections (date you wish to retire, current annual earnings, etc.) and click “Create Estimate,” eligible members will have access to a drop-down menu to see the amount you would receive under each of the PLS percentages that you are eligible for.
- Most eligible members can use the “Quick Calculator” on our website to create an estimate based on the information you enter. After you enter your tentative retirement information (date of retirement, planned years of service, earnings at retirement, etc.) and click “Estimate Single Life Allowance,” you’ll be able to click a link at the bottom of the page if you are interested in the PLS option. Note: The Quick Calculator is not available to sheriffs and correction officers.
- Contact us to request an estimate.
Choosing a PLS Payment
You must select a pension payment option and PLS payment by the end of the month in which you retire.
If you are eligible for a PLS payment, you can file for retirement, review and select your pension payment and PLS options online using Retirement Online.
If you file for retirement by mail, we will send you a special Option Election Form so you can choose a PLS percentage, or you can print it from the Option Selection with Partial Lump Sum Payment section of our Forms page and submit it with your retirement application.
Receiving Your PLS Payment
You can have the PLS payment made to you or you can have all or any portion paid in a direct rollover to a Traditional or Roth Individual Retirement Account (IRA) or other eligible plan that accepts rollovers.
If you choose to have a PLS payment made directly to you:
- For most members, you will receive your PLS along with your first pension payment, at the end of the month following your retirement month.
- The payment will be subject to federal income tax in the year the payment is made and NYSLRS will issue you a 1099-R tax form the following January.
- We will withhold 20 percent of the taxable amount for federal income taxes.
- If you are less than 50 years old (55 years old for ERS members) at the end of the calendar year in which payment is made, the payment may be subject to an additional tax of 10 percent for early distribution from a qualified retirement plan.
- You can roll over the payment to a Traditional or Roth IRA if the rollover is completed within 60 days of receiving payment.
If you choose a direct rollover to a Traditional IRA or other eligible plan:
- The payment will not be subject to federal income tax in the year the payment is made, and NYSLRS will issue you a 1099-R tax form the following January showing that this distribution is not taxable.
- Taxes will be deferred until you withdraw the funds from the IRA or other eligible plan.
- No federal income tax will be withheld from the payment.
If you choose a direct rollover to a Roth IRA:
- The payment will be subject to federal income tax in the year the payment is made, and a 1099-R tax form will be issued the following January. You must also file Internal Revenue Service (IRS) form 8606 with your federal tax return.
- You may elect to have federal income tax of 20 percent withheld from the payment.
For more information, contact a tax consultant, or visit the Internal Revenue Service website.
For More Information
- Email us using our secure contact form.
- Contact our Call Center toll-free at 1-866-805-0990, or 518-474-7736 in the Albany, New York area.
- Contact our Call Center to schedule a pre-retirement consultation with an information representative.
Rev. 10/20