NYS Prior Service
Do you have any NYS Prior Service? Have you ever worked for the town recreation department?
If so then it might make sense to Buy Back this service credit as it could boost your pension and help you reach certain service milestones faster. For example with 10 years of membership or credit, Tier 4 members stop making 3% contributions toward their retirement.
It is important to make sure you have all the service credit for which you are eligible, because it may affect when your benefits begin and how much you will receive. Your pension is based on four factors: tier of membership; total service credit; age at retirement; and, final average salary. Here’s how:
- When: Throughout your career, the amount of service credit you have will determine your eligibility for benefits. These include loans, vesting rights, disability coverage and death benefits.
- How Much: Service credit is used to determine your pension factor, a primary component of the formula used to calculate your retirement benefit. Additional credit will increase the pension factor in almost every situation.
The following types of service can build your credit and help you reach important service milestones:
By far the most common one is Prior NYS Service. NYSTRS even did a short 5 minute video on the topic.
How to Apply for Prior Service:
- Complete Part 1 of the verification form (PRS-3.5) and send it to your former employer for completion. It is the employer’s responsibility to submit the form to NYSTRS. I would recommend either taking in person if you can or following up with NYSTRS about a month later to make sure they have received it.
- Complete a Prior Service Claim form (PRS-2) and submit it to NYSTRS.
- I was told it takes 4-6 months for NYSTRS to review the claim.
- Once a claim has been verified and fully processed, those with a MyNYSTRS (your online login for NYSTRS) account can see how much it will cost to purchase the service by selecting the Service Credit tab and then clicking on Cost Summary. I believe if you don’t have a MyNYSTRS account setup these amounts will just be mailed to you. In addition to seeing how much it will cost to purchase the service immediately, you’ll also be able to see how delaying the purchase will impact your costs.
- Once you have the costs back, give me a call as we may be able to use your 403b to buy back the service.