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Retirement Planning Tips for New York State Employees

Tip of the Month

March 2010 - When do I pay income taxes on the funds in my Deferred Compensation account?

Your Deferred Compensation funds are held in the Plan and are not taxable until you withdraw them. Upon your request for distribution, funds will be subject to federal, New York State, and local income taxes. If you are age 59 1/2 or older, you may be eligible to receive up to $20,000 in annual distributions, exempt from New York State income taxes. If you reside outside of New York State, distributions will be subject to the income tax laws of your state of residence. To discuss distribution options, speak to a Deferred Compensation Account Executive or HELPLINE Representative, at 800-422-8463. Representatives are available Monday through Friday, from 8:00 a.m. to 11:00 p.m., and Saturdays from 9:00 a.m. to 6:00 p.m., except holidays. You may also visit the Deferred Compensation website at www.nysdcp.com.

February 2010 - When are Social Security checks mailed to participants each month?

If your birthday falls between the 1st and 10th of the month, your Social Security check comes on the 2nd Wednesday of the month; between the 11th and 20th of the month, your Social Security check comes on the 3rd Wednesday of the month; between the 21st and 31st of the month, your Social Security check comes on the 4th Wednesday of the month. For more information on your Social Security benefits go to: www.socialsecurity.gov or call 800-772-1213.

January 2010 - Must I be enrolled in the New York State Health Insurance Program (NYSHIP) when I retire?

You must be enrolled in NYSHIP or be an enrolled dependent of someone who is enrolled in NYSHIP at the time of your retirement. For example, if you were on leave and canceled your coverage, and then retire, you are not eligible for health insurance as a retiree. For more information go to the Department of Civil Service website at www.cs.state.ny.us or call 800-833-4344.

December 2009 - Will I automatically start receiving my NYS pension check when I retire?

The Employee Retirement System (ERS) does not automatically start sending you pension payments when you become eligible for retirement - even if you are vested and off the payroll. You cannot receive your pension unless you file an Application for Service Retirement (RS6037). The application can be filed with ERS up to 90 days before your retirement date; however, it must be filed at least 30 days before your retirement date. Remember to have your application notarized. For more information on your pension benefits call 866-805-0990 or visit www.osc.state.ny.us/retire

November 2009 - Do I pay income taxes on funds withheld for Deferred Compensation?

Amounts held under the Deferred Compensation Plan are not taxable until you receive them. Upon distribution, your benefits will be subject to federal, New York State, and local income taxes. If you reside outside of New York State, distributions will be subject to the income tax laws of your state of residence. To speak to a Deferred Compensation HELPLINE Representative, call 800-422-8463. Representatives are available Monday through Friday, from 8:00 a.m. to 11:00 p.m., and Saturdays from 9:00 a.m. to 6:00 p.m., except holidays. You may also visit the Deferred Compensation website at www.nysdcp.com

October 2009 - When do I apply for social security benefits if I retire from state service before I reach full social security retirement age?

You can apply for social security benefits when you retire from state service. However, if you apply for social security benefits before you reach your full social security retirement age, your social security retirement check will be reduced permanently. The amount of reduction depends on the number of months you receive checks before you reach full social security retirement age. The best way to file is online at https://secure.ssa.gov/apps6z/RRet/rib. You may also call 800-772-1213 for an appointment to apply by phone or in person at your local social security office.

September 2009 - New York State Health Insurance Program (NYSHIP)

After I retire, may I cancel my New York State Health Insurance Program (NYSHIP) coverage and later re-enroll?

After you retire, you may cancel your health insurance coverage and later re-enroll. Under most circumstances, you will be subject to a waiting period of up to three months before your coverage again becomes effective. Upon re-enrolling, you will receive the same monthly sick leave credit as before you canceled coverage. Visit the NYSHIP Online section of the Department of Civil Service website at www.cs.state.ny.us or for more information about NYSHIP call 800-833-4344.

August 2009 - Pension

When planning my retirement, do I need proof of my birth date?

The Retirement System must have proof of your birth date before any benefits can be paid. In most cases, a photocopy of the document is acceptable, but if you send us the original, we will return it to you. If you do not have a birth certificate, we will also accept one of the following documents:

  1. Baptismal Certificate
  2. Certificate of Release or Discharge from Active Duty (DD-214)
  3. Passport
  4. Naturalization Papers

The National Center for Health Statistics’ website contains information for each state on where to write for vital records such as your birth certificate and the cost. Visit http://www.cdc.gov/nchs/w2w.htm

For more information on your pension benefits call 866-805-0990 or visit www.osc.state.ny.us/retire

July 2009 - When I retire, when will payments from my deferred compensation account begin?

You select the date that you want your payments from your deferred compensation account to begin. The selected date may be as early as the 45th day following the date of your separation from service or as late as April 1 in the calendar year after you become 70 1/2. If you are employed at age 70 1/2, you may begin benefit payments or defer benefit payments until you separate from service.

To speak to a Deferred Compensation HELPLINE Representative, call 1-800-422-8463. Representatives are available Monday through Friday, from 8:00 a.m. to 11:00 p.m., and Saturdays from 9:00 a.m. to 6:00 p.m., except holidays. You may also visit the Deferred Compensation website at www.nysdcp.com

June 2009 - How can I estimate my monthly Social Security benefit amount?

Social Security has a new online calculator at www.socialsecurity.gov/estimator that provides immediate and personalized benefit estimates to help you plan for your retirement. The Retirement Estimator is tied to your actual Social Security earnings record and eliminates the need to manually key in years of earnings information. Retirement estimates may vary slightly from the actual benefit you may receive in the future because:

For more information about Social Security, call 800-772-1213 or visit www.socialsecurity.gov.

May 2009 - NYS Health Insurance Program (NYSHIP)

How will I pay for my health insurance as a retiree?

When you retire, you will pay your share of the health insurance premium through deductions from your monthly pension check or by making monthly payments directly to the Employee Benefits Division or to your former Participating Employer. It may take several months for the Employee Benefits Division to receive the retirement number assigned to you by the Retirement System and begin taking monthly health insurance deductions from your pension. Meanwhile, each month you will be billed directly for your share of the premium.

Visit the NYSHIP Online section of the Department of Civil Service website at www.cs.state.ny.us or for more information about NYSHIP call 800-833-4344.

April 2009 - Are you divorced and do you have a Domestic Relations Order (DRO)?

If you are divorced and agreed to or were ordered by the court to have a portion of your pension benefits paid to your ex-spouse, make sure the Office of the Sate Comptroller has a valid Domestic Relations Order (DRO) on file. You will also want to review the terms of the DRO. In some cases, the court may have ordered you to select an option to protect your ex-spouse. If you are in the process of divorcing, you should know that the New York State Court of Appeals has determined that your retirement benefits constitute marital property and are subject to the equitable distribution provisions of the Domestic Relations Law. Equitable distribution is the fair division of marital assets between husband and wife after the marriage has ended. The most commonly used equitable distribution formula provides your former spouse with one-half of your pension that was earned while you were married. For more information call 866-805-0990 or visit www.osc.state.ny.us/retire.

March 2009 - Deferred Compensation

Upon my death, what happens to the balance remaining in my NYS Deferred Compensation Plan account?

Upon your death, the amount remaining in your Plan account will be paid to your named beneficiary. If you did not name a beneficiary, the amount remaining will be paid to your spouse, if you have a spouse, or to your estate. The date when a beneficiary must begin to receive benefit payments and the maximum period over which benefit payments may be made depends on:

To speak to a HELPLINE Representative, call 1-800-422-8463. Representatives are available from 8:00 a.m. to 11:00 p.m., Monday through Friday, and 9:00 a.m. to 6:00 p.m. on Saturday, except holidays, or visit www.nysdcp.com

February 2009 - Will the amount of my Social Security benefit change if I retire early?

You can retire as early as 62, but your Social Security check will be reduced permanently. The amount of reduction depends on the number of months you get checks before you reach full retirement age. If you start your checks early, you will get about the same value in total benefits over the years, but in smaller amounts to adjust for the longer period you will get them. The Retirement Estimator can be found at www.socialsecurity.gov/estimator. For more information about Social Security call: 800-772-1213 or visit www.socialsecurity.gov

January 2009 - How will my sick leave credit help pay my monthly share of the NYS Health Insurance Program (NYSHIP) cost when I retire?

At the time you retire, if you are eligible to use sick leave credits for health insurance purposes, your agency will report your hourly rate of pay and unused sick leave hours to the Employee Benefits Division. The Division will calculate the monthly actuarial value of your sick leave. The result is a lifetime monthly credit that is used to reduce your share of the monthly health insurance premium for as long as you remain enrolled in NYSHIP. If the credit from your unused sick leave does not fully cover your share of the monthly premiums, you must pay the balance. To estimate the value of your sick leave credit, visit the NYSHIP Online portion of the Department of Civil Service website at www.cs.state.ny.us or for more information about NYSHIP call 800-833-4344.

December 2008 - Are you retiring before age 62?

Members of the NYS employee retirement system in Tiers 2, 3, & 4 in the regular retirement plan can retire as early as age 55. However, if you plan on retiring before 62, but have less than 30 years of service credit, your pension benefit will be reduced. The reduction is a percentage based on your age at retirement. If you have 30 years of service credit, your benefit will not be reduced. For more information on how early retirement can affect your benefit, refer to your plan booklet at: http://www.osc.state.ny.us/retire/publications/index.htm#ersmembers For more information call: 866-805-0990 or visit: www.osc.state.ny.us/retire

November 2008 - When can funds be withdrawn from my Deferred Compensation Plan?

There are seven conditions under which funds may be withdrawn.

  1. Separation from service, including regular retirement, regardless of age.
  2. Attainment of age 70 1/2, even if still employed.
  3. Severe unforeseeable emergency.
  4. If your Plan Account balance is no more than $5,000 AND you have not contributed to the Plan in the last two years AND you have not received a distribution under this provision before.
  5. Death.
  6. Loans.
  7. In-Service distributions of assets rolled in from another eligible retirement plan, except another governmental deferred compensation plan.

For more information about the Deferred Compensation Plan call: 800-422-8463 or visit: www.nysdcp.com

October 2008 - Is my Social Security benefit affected if I return to work after I retire?

If you return to work after you start receiving retirement checks, your added earnings may result in higher benefits. Social Security will automatically recalculate your benefit after the additional earnings are credited to your record. In addition, there is a special credit that can mean a larger benefit. For each month you delay collecting retirement benefits, beginning with the month you reach full retirement age until you are 70, you'll receive an extra amount in benefits when you do retire.

For more information about Social Security call: 800-772-1213 or visit: www.socialsecurity.gov

September 2008 - Can I defer the start of my retiree health insurance coverage (NYSHIP) or the use of my sick leave credits after I retire?

When you retire, you may defer (or delay) the start of your retiree health insurance coverage and the use of your sick leave credit if you have other health insurance coverage. If you want to defer health insurance coverage, you must make that choice before your last day on the payroll. Contact your agency HBA to defer coverage. There may be advantages to delaying the start of your NYSHIP coverage. During the period of deferment, you do not have to pay the NYSHIP premium. Also, the value of your sick leave credit will be higher at the time you begin your retiree coverage because it will be calculated when you are older. If you defer your coverage you may reenroll for NYSHIP coverage at any time without a waiting period.

For more information about the NYS Health Insurance Program call: 800-833-4344 or visit: www.cs.state.ny.us

August 2008 - Is my NYS retirement pension subject to federal income tax?

After you retire, your monthly pension benefit payments are not subject to NYS taxes, but are subject to federal income tax. When you file for retirement, be sure to send a W-4P form to the NYS Retirement System so they know how much to withhold for federal taxes. If you need help deciding on your withholdings, consult with your tax advisor. You may use the tax calculator at:
http://nysosc9.osc.state.ny.us/product/ wthtxclc.nsf/
TaxCalcInput?OpenForm
For a W-4P form: http://www.osc.state.ny.us/retire/forms/form_w-4p.pdf
For more information call 866-805-0990 or visit: www.osc.state.ny.us/retire

July 2008 - Upon my death, what happens to the balance in my NYS Deferred Compensation Plan Account?

Upon your death, the amount remaining in your plan account will be paid to your beneficiary(s). If you did not name a beneficiary, the amount remaining will be paid to your estate.

For more information on your deferred compensation account, please call: 800-422-8463. Representatives are available 8:00 a.m. - 11:00 p.m. Eastern Time, Monday through Friday, and 9:00 a.m. - 6:00 p.m. on Saturday, except holidays or visit: www.nysdcp.com

June 2008 -  How does retirement affect Social Security survivor benefits?

If you are collecting Social Security (SS) survivor benefits, you can switch to your own SS retirement benefits (assuming you are eligible and your SS retirement rate is higher than the widow/widower's rate) as early as age 62. In many cases, you can begin receiving SS retirement benefits either on your own or your spouse's record at age 62 and then switch to the other benefit when you reach full retirement age, if that amount is higher. For more information: call Social Security at 800-772-1213 or toll-free "TTY" 800-325-0778, 7 a.m. - 7 p.m. Monday through Friday or visit: http://www.socialsecurity.gov.

May 2008 - How can I make sure that if I die, my dependent survivors can use my sick leave credit toward their NYS Health Insurance Program (NYSHIP) premium?

At the time of your retirement, you may specify that you want your eligible dependent survivors to be able to use your monthly sick leave credit toward their NYSHIP premium if you pre-decease them. This is called the Dual Annuitant Sick Leave Credit. If you want this option, you must request it in writing by completing the Dual Annuitant Sick Leave Credit Election form (PS-405) before your last day on the payroll. You do not need to have family coverage at the time of retirement to choose this option. For additional information, visit the New York State Department of Civil Service website at www.cs.state.ny.us or call 800-833-4344.

April 2008 - Do I have to take my money out of my NYS Deferred Compensation Plan Account when I separate from service?

No. You can leave your assets with the Plan until age 70 ½ when you must begin "Required Minimum Distributions". In fact, you can continue to make investment changes, and roll assets into the Plan even though you are no longer contributing to the Plan. For additional information visit: www.nysdcp.com or call: 1-800-422-8463.

March 2008 - Do I need to enroll in Medicare Part A and B?

Three months before you turn 65, contact the Social Security Office to arrange for Medicare Parts A and B. After you turn 65, Medicare will become primary to the NYS Health Insurance Program (NYSHIP). You can also apply for both Social Security benefits and Medicare benefits online. For more information visit: www.socialsecurity.gov or call: 1-800-772-1213.

February 2008 - When I retire, am I eligible to continue health insurance coverage through the New York State Health Insurance Plan (NYSHIP)?

You must meet three eligibility requirements to continue NYSHIP coverage for yourself and your eligible dependent:

  1. You must have a minimum service requirement of 5 years if hired before April 1, 1975 and 10 years of service if hired after April 1, 1975.
  2. You must qualify for retirement as a member of the New York State retirement system.
  3. You must be enrolled in NYSHIP or be an enrolled dependent of someone who is enrolled in NYSHIP at the time of your retirement.

For more information call: 800-833-4344 or go to: www.cs.state.ny.us

January 2008 -  Is retirement just around the corner for you? When you are at least 30 days and not more than 90 days from retirement, submit your retirement application (RS6037 form), along with your proof of date of birth (in most cases a photocopy is acceptable).
Mail them to: NYS Retirement System, 110 State St., Albany, NY 12244-0001. For additional information call: 866-805-0990 or go to: www.osc.state.ny.us/retire. Do you need a retirement application form? Go to: http://worklife.state.ny.us/preretirement/selfhelpguide/application-for-service-retirement_rs6037.html For additional information on proof of birth: http://worklife.state.ny.us/preretirement/selfhelpguide/ch9.html

December 2007 - Did you know? You are not required to begin withdrawing money from your NYS Deferred Compensation Plan account until you are 70.5 years old. As many retirees do not need their deferred compensation savings right away, this plan allows your investments to keep growing tax deferred so funds are available for future needs, emergencies or to compensate for inflation. For more information about withdrawal options visit: www.nysdcp.com or by calling the plan helpline at: 800-422-8463.

November 2007 - Should I use direct deposit for my Social Security check? Using direct deposit for your monthly Social Security check is safe, secure, and convenient. You will get your benefits on time, even if you're out of town, sick, or unable to get to the bank. For additional information call Social Security at: 800-772-1213 or visit: www.socialsecurity.gov.

October 2007 -  Are you 12 -18 months away from retiring? If so, it is time to request a formal estimate of your approximate monthly pension for State service. You will need to complete a Request for Estimate form (RS6030), which can be downloaded at: http://www.osc.state.ny.us/retire/ 0.forms/rs6030.pdf
or call the Employee's Retirement System office at: 866-805-0990.

September 2007 - Planning to Retire? Schedule an appointment before you retire with your agency Health Benefits Administrator to discuss continuation of your health insurance coverage. Learn:
* how sick leave credit may reduce the cost of your health insurance
* how to continue your dental and vision benefits
* how a dual annuitant sick leave credit option can work for you
For information: www.cs.state.ny.us/ebd

August 2007 -  Do you have any previous public employment and/or military service? If so, you may be eligible for additional retirement service credit. For more information, please refer to chapter 9 of the Self-Help Guide on the NYS Work-Life Services web site at: www.worklife.state.ny.us/preretirement/selfhelpguide/index.html. To apply for retirement credit for previous service, complete form RS 5042 which is available from any Employee Retirement System (ERS) office. Call ERS toll free at 866-805-0990 or visit the ERS web site at: www.osc.state.ny.us/retire.

July 2007 -  Remember to review your Social Security Statement each year for accuracy. This is a very useful planning document because it includes a summary of estimated retirement and disability benefits you and your family may receive based on your earnings.

June 2007 -  Your lump sum unused vacation check can be placed into your NYS Deferred Compensation Plan account. This must be set up at least two paychecks prior to leaving employment. This will reduce your taxes for the year you retire and increase your NYS Deferred Compensation Plan account.

May 2007 -  When determining the best retirement date for you, consider choosing a date that's near the end of the month. That way, your first pension check will come with a minimum wait time.

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