Years of service, final earnings are factors that determine pensions
Teachers and administrators who work in public schools and many charter schools are enrolled in the New York State Teachers’ Retirement System.
They are classified in one of four groups, or tiers, depending on when they first started working:
• Tier 1: Hired before July 1, 1973.
• Tier 2: Hired July 1, 1973, to July 26, 1976.
• Tier 3: Hired July 27, 1976, to Aug. 31, 1983.
• Tier 4: Hired after Aug. 31, 1983.
Pensions are based on the employee’s years of service as well as his or her average earnings in the final few years. For most, the final three years are used for calculations. For those in Tier 1, it is the final five years.
Earnings can include salary as well as money for coaching, summer school and other as signments. Employees who started working before June 17, 1971, also include such things as buybacks of unused vacation time and sick days.
Most of the money for the retirement system comes from taxpayers, and a small amount from the employees.
The money is then invested by the New York State Teachers’ Retirement System in the stock market.
The employer contribution varies, depending on how well the stock market is doing. The rate of district participation was as high as 14.79 percent of the total payroll in the late 1980s but has dipped to below 1 percent in the early part of this decade.
Employees in Tiers 1 and 2 do not pay into their pensions.
Employees in Tiers 3 and 4 contribute 3 percent of their pay for their first 10 years of work. After that, they no longer contribute.
Upon retirement, employees can elect to collect a full pension for the remainder of their lives or can opt for a reduced pension that continues payments to their spouses upon the retiree’s death. Either way, pension payments are exempt from state taxes and Social Security payments.
The pension figures provided in these stories as well as in the pension database available at www.buffalonews.com reflect the full pension retirees qualify for. The News has no way of knowing which payment system retirees opted for. For additional information, go to http:// www.nystrs.org/main/ library/handbook/benefits. htm.
