NYC Civil Service Pension and Tiers

Most of the topics on CivilServiceJobNYC.com are related to obtaining a city job or different ways to look at opportunities within the city.

However, this discussion is going to touch on something that is becoming less and less available to those working in the private sector – a real pension.

Yeah, yeah – the private sector pay may average a bit higher at times. But for many of us, the day will come that we want to call it a day – the last day on the job. Having this fixed annuity type payment that keeps coming until you’re gone – and to your spouse if you so desire – is a pretty nice EARNED benefit for years of labor and sacrifice.

Now, we’ll save the contentious issue of private sector envy of public sector pensions  as a topic for another day. Here we’ll look at the NYC Employees Retirement System Tiers and high-level benefits.

When you join the retirement system, the date you join the system determines the Tier in which you are placed. Information from the NYCERS website shows the following Tiers and dates:

• Tier 1 – Members who joined NYCERS prior to July 1, 1973
• Tier 2 – Members who joined NYCERS between July 1, 1973 and July 26, 1976 and DA Investigators who join(ed) NYCERS between July 1, 1973 and March 31, 2012
• Tier 3 – Correction Officers who join(ed) NYCERS between July 27, 1976 and March 31, 2012
• Tier 4 – Members who join(ed) NYCERS between July 27, 1976 and March 31, 2012 except Correction Officers and DA Investigators
• Tier 6 – Members who joined NYCERS on or after April 1, 2012

Tier 5 was a short-lived solution to “pension reform” and was mainly for NY State and local government employees not within the City of New York.

Each Tier has specific features and benefits based on where you work, what your title is, and how long you’ve worked it. NYCERS has a Frequently Asked Questions page that gives you info on each Tier and each feature/benefit for that Tier.

Each later Tier reduced the benefits and/or increased the time you need to work to obtain the pension. This is due to concern for the stability and health of the retirement system. You also have to join and “contribute” a certain percentage of your pay to participate in the retirement plan.

Persons hired after April 1, 2012 (all new hires) will be in Tier 6. For the average citywide employee, that provides a basic plan of 63/10 – meaning that you can retire at 63 years old as long as you were a member of the pension system for 10 years.

Note – you were a member of NYCERS (also known as credited service) – not just employed by the city. However, in most cases, if you were employed by the city but didn’t join the plan until later, you can usually “buy-back” the time from when you started your employment.

For example, say you started working for the city when you were 53 and are in Tier 6. You worked for two years before deciding to join the retirement plan. But now you’re 63 and you only have 8 years of “credited service” because of those two years you didn’t participate, and now you want to retire. You can “buy-back” those first two years of time and now have your 10 years of “credited service”. You would have to pay some interest in addition to the contribution amount. But it gets you to retirement without having to work until 65 – where at that age you would have accumulated the 10 years’ service, meeting both the age (63 minimum) and credited service requirement (10 years minimum). Each additional year worked increases that retirement payment by a certain percentage. NYCERS has a Tier 6 Fact Sheet that explains the details.

I have several coworkers and other acquaintances that worked in private industry for many years and later decided to come and work for the city to get a basic pension. It’s generally a win-win: the city gets a seasoned and skilled employee and the employee gets stable and consistent benefits when he decides to retire.

Questions and Comments welcomed below.