NYS Tier 6 Pension: Contributions, Vesting, and Retirement Rules

The New York State Tier 6 pension is the defined benefit retirement plan under Article 15 of the Retirement and Social Security Law that covers most public employees who joined the New York State and Local Retirement System (NYSLRS) or the New York State Teachers’ Retirement System on or after April 1, 2012.¹ Your future pension is set by a formula tied to your years of service and your highest earnings, not by investment returns. You contribute a percentage of your salary for your entire public career, and the Comptroller’s office administers the plan.²

Who Is a Tier 6 Member

If your qualifying public job with a NYSLRS or Teachers’ Retirement System employer began on or after April 1, 2012, you are in Tier 6. Full-time permanent employees are enrolled automatically. Part-time and seasonal workers can join voluntarily, and enrollment becomes mandatory once they cross thresholds their employer sets.³ Your tier is locked in by your enrollment date. Leaving public service and coming back years later does not move you to a newer or older tier.

What You Contribute

Tier 6 members pay into the system for the entire length of their public career. Earlier tiers stopped required contributions at 10 years of service. Tier 6 does not. Contributions come out pre-tax, so they reduce your federal taxable income while you’re working. The percentage you pay depends on your annual wages:⁴

$45,000 or less: 3%
$45,000.01 to $55,000: 3.5%
$55,000.01 to $75,000: 4.5%
$75,000.01 to $100,000: 5.75%
More than $100,000: 6%

For your first three years of membership, the rate is based on the annual wage your employer reports when you enroll. After that, the rate is set from your actual public earnings two years earlier and resets every April 1.³ Part-time members have their bracket determined using an annualized wage, but the deduction itself is applied to real earnings.

Vesting: When Your Pension Becomes Yours

Vesting is the point at which you have earned the right to a future pension whether or not you stay in public service. Tier 6 originally required 10 years. Legislation effective April 9, 2022, cut that to five years of credited service.⁵

Service credit is earned for time actually worked. A full year of full-time work generally equals one year of credit. Part-time credit is prorated, calculated either by dividing days worked by 260 or by comparing salary to a minimum-wage-based formula, whichever produces the lower figure.

How Your Pension Is Calculated

Two numbers drive your benefit: your Final Average Earnings (FAE) and your years of service credit.

Final Average Earnings

For Tier 6 members in the Employees’ Retirement System, FAE is the average of your highest three consecutive years of New York public earnings.³ Most often this is the three years right before retirement, but it can be any three-consecutive-year stretch that produces the highest average.

An anti-spiking rule prevents last-minute inflation. If earnings in any year used in the FAE exceed the average of the previous two years by more than 10%, the excess is excluded from the calculation.⁶ Someone who earned $80,000 and then $82,000 could count no more than about $89,100 for the third year, because that is 110% of the $81,000 average of the prior two.

The Service Multiplier

Your annual pension is a percentage of FAE, and the percentage climbs sharply once you cross 20 years of service:⁷

Under 20 years: 1.66% of FAE per year of service
20 to 30 years: 2% of FAE per year of service (applied to every year, not just the years past 20)
More than 30 years: 60% of FAE for the first 30 years, plus 1.5% of FAE for each additional year

The jump at 20 years is the most important threshold in the plan. Fifteen years of service produces roughly 24.9% of FAE. Twenty years produces 40%. Thirty years produces 60%. Thirty-five years produces 67.5%. If you are close to 20 years and considering leaving, the difference between staying and going is significant, and it compounds across the rest of your life.

When You Can Retire

The unreduced pension is available at age 63 with at least five years of credited service.⁸ You can retire as early as 55 with five years of service, but the benefit is permanently reduced by 6.5% for each year you retire before 63. The reduction is prorated monthly.⁹ The full schedule:

Age 63: no reduction
Age 62: 6.5%
Age 61: 13%
Age 60: 19.5%
Age 59: 26%
Age 58: 32.5%
Age 57: 39%
Age 56: 45.5%
Age 55: 52%

These reductions do not go away when you turn 63. They stay for life. A member with 25 years of service and an $80,000 FAE would receive $40,000 a year (50% of FAE) at age 63. Retiring at 58 instead drops that to $27,000. That’s $13,000 less every year, permanently.

How You Choose to Be Paid

At retirement you elect a payment option. The single-life annuity pays the highest monthly amount but stops when you die. Joint-and-survivor options continue payments to a beneficiary after your death but reduce your monthly check while you’re alive, because payments are being spread across two lives. A 100% joint-and-survivor option keeps the same amount going to your beneficiary; a 50% option pays half. These elections are made at retirement and generally cannot be changed later.

Disability and Death Benefits

If you become permanently unable to perform your job, Article 15 provides a disability retirement benefit. The standard requirement is 10 years of credited service. If your disability results from an on-the-job accident that was not caused by your own willful negligence, there is no minimum service requirement.¹⁰ For an on-the-job accident, the minimum benefit is one-third of FAE. You must file while still on the payroll or within three months of your last paid date.

If you die while actively employed, a designated beneficiary may receive a death benefit. Members in regular plans generally become eligible after one year of service credit, with no minimum for a job-related death. Your accumulated contributions plus interest are also payable on top of the death benefit.³ If you leave public employment with at least 10 years of service, 50% of the ordinary death benefit may remain payable. Keeping beneficiary designations current is one of the easiest steps to overlook.

If You Leave Before Retirement

Leaving public employment with fewer than five years of credit means you have not vested. You forfeit any future pension, but you can withdraw your accumulated contributions plus interest. Taking that refund closes your membership. If you come back to public work later, you start over as a new member.

Leaving after vesting but before retirement age keeps your pension in the system. You can collect once you reach an eligible retirement age, subject to the same early retirement reductions. No new service credit accrues while you are gone, so the benefit is fixed by the credit you already earned.

Taxes on Your Pension

Your Tier 6 pension is federally taxable as ordinary income. NYSLRS reports payments on Form 1099-R, and you can elect federal withholding from your monthly check.¹¹

New York State fully excludes NYSLRS pensions from state income tax, with no dollar cap and no age restriction.¹² That’s a broader exclusion than the $20,000 pension exemption available for other retirement income types. Members who retire in New York keep the entire state-tax savings.

Social Security

Many Tier 6 members pay into Social Security as well and will collect a Social Security retirement benefit alongside the pension. Two federal rules used to cut those benefits for public retirees: the Windfall Elimination Provision reduced retirement benefits, and the Government Pension Offset cut spousal and survivor benefits by two-thirds of the public pension.¹³

The Social Security Fairness Act, signed on January 5, 2025, eliminated both, retroactive to January 2024. The Social Security Administration has been adjusting monthly payments and issuing retroactive amounts to those affected. Tier 6 members eligible for Social Security should now receive the full benefit they earned, with no public-pension offset.

How to Apply

File your retirement application at least 15 days, and no more than 90 days, before your intended retirement date.¹⁴ Applications outside that window won’t be processed on your target date. The Retirement Online portal is the fastest way to file. Before you submit, confirm that beneficiary designations are up to date and that your employer has reported your most recent earnings, since both feed directly into your benefit calculation and payment options.

1
New York State Senate. Retirement and Social Security Code Article 15 – Coordinated Retirement Plan
2
Office of the New York State Comptroller. Coordinated Plan for ERS Tier 6 Members
3
Office of the New York State Comptroller. Retirement Benefit Summary Tier 6 ERS
4
New York State Senate. Retirement and Social Security Code 613 – Member Contributions
5
Office of the New York State Comptroller. Are You Vested? And What It Means
6
New York State Senate. Retirement and Social Security Code 608 – Final Average Salary
7
Office of the New York State Comptroller. Comparison of ERS Benefits
8
New York State Senate. Retirement and Social Security Code 603 – Eligibility for Service Retirement Benefits; Age and Service Requirements
9
Office of the New York State Comptroller. About Benefit Reductions
10
Office of the New York State Comptroller. Article 15 Disability
11
Internal Revenue Service. About Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
12
New York State Department of Taxation and Finance. Information for Retired Persons
13
Social Security Administration. Social Security Fairness Act: Windfall Elimination Provision and Government Pension Offset Update
14
Office of the New York State Comptroller. Preparing and Applying for Retirement