NYCERS Tier 4 (57/5 Plan)
This page documents how FinZot models the NYCERS Tier 4 (57/5 Plan) defined benefit pension plan.
Who this plan covers: General members of New York City Employees’ Retirement System (NYCERS), on or after June 29, 1995 and before April 1, 2012: joined NYCERS (membership date) in an Eligible Position.
Employee Contributions
Section titled “Employee Contributions”Employee contributions are the portion of salary that the employee pays into the pension fund.
| Field | Value |
|---|---|
| Contribution Rate | 1.85% of salary |
| Tax Treatment | Pre-tax (reduces taxable income) |
Vesting & Retirement Eligibility
Section titled “Vesting & Retirement Eligibility”Vesting
Section titled “Vesting”Vesting determines when an employee has earned the right to receive pension benefits. The following formula must evaluate to TRUE for the employee to be vested:
service_credits >= 5Retirement Eligibility
Section titled “Retirement Eligibility”Retirement eligibility determines when an employee can begin receiving pension payouts. The following formula must evaluate to TRUE:
service_credits >= 5 AND commencement_age >= 57Formula Variables:
service_credits: Years of credited servicecommencement_age: Age when pension payments commence
Benefit Calculation
Section titled “Benefit Calculation”The annual pension benefit is calculated as:
Annual Benefit = Final Compensation × Benefit Factor × Service CreditsFinal Compensation
Section titled “Final Compensation”Final compensation is the salary figure used in the benefit calculation, typically an average of the employee’s highest-earning years.
| Field | Value |
|---|---|
| Method | Highest Consecutive Years |
| Years Averaged | 3 |
Benefit Factor
Section titled “Benefit Factor”The benefit factor is a percentage multiplier that typically varies based on retirement age. Higher ages generally yield higher factors.
CASE WHEN service_credits < 19.9999 THEN 1 / 60 WHEN service_credits <= 30 THEN 0.02 ELSE(0.60 + 0.015 *(service_credits - 30)) / service_creditsENDFormula Variables:
commencement_age: Age when pension payments commenceservice_credits: Years of credited service
Cost-of-Living Adjustment (COLA)
Section titled “Cost-of-Living Adjustment (COLA)”The COLA formula determines how pension benefits grow over time after retirement to keep pace with inflation.
IF(OR(AND(age >= 61, years_since_retirement >= 5 + IF(commencement_month >= 10, 1, 0)), AND(age >= 55, years_since_retirement >= 10 + IF(commencement_month >= 10, 1, 0))), current_pension_benefit + MIN(0.03, MAX(0.01, inflation_rate / 2)) * MIN(18000, current_pension_benefit), current_pension_benefit)Formula Variables:
initial_pension_benefit: The annual benefit amount at retirementyears_since_retirement: Number of years since retirement began
Tax Treatment
Section titled “Tax Treatment”Pension payouts from this plan are taxable as ordinary income.
Social Security Coverage
Section titled “Social Security Coverage”NYCERS Tier 4 (57/5 Plan) members generally pay into Social Security alongside the pension, so a job with this plan is treated as covered and earns Social Security credits normally.
Note: FinZot’s pension estimates are for planning purposes only and may not reflect all plan provisions. For official benefit estimates, contact your plan administrator.