Pension Benefits: Life Insurance Coverage For Nycers?

The New York City Employees' Retirement System (NYCERS) provides pension benefits to over 300,000 active and retired New York City workers. While NYCERS does not offer health benefits, retirees may be eligible for City-paid health insurance. However, it is unclear whether NYCERS pension benefits include life insurance.

Eligibility for health insurance benefits

When receiving a pension from the New York City Employees' Retirement System (NYCERS), you may be eligible for City-paid health insurance benefits. However, it is important to note that NYCERS does not offer or administer health benefits. These benefits are provided through the Office of Labor Relations Health Benefits Program.

To be eligible for retirement benefits, you must meet specific age and service requirements, which vary depending on your Tier and Plan. For example, Tier 1 and Tier 2 members must complete a certain number of years of service and attain a specific age to qualify for retirement benefits.

The Health and Pension Services Unit assists members with various pension tiers and pension options under NYCERS. They provide pension counselling services, where retirees can receive an estimate of their pension retirement allowance and an explanation of the different pension options. The Unit also helps members resolve health insurance-related matters, including rejected claims, balance billing issues, reimbursement problems, incorrect payroll deductions, termination of coverage, submitting claims forms, and interpreting benefit statements.

Additionally, the New York City Deferred Compensation Plan (DCP) offers eligible city employees a way to save for retirement through payroll deductions. The DCP comprises two programs: a 457 Plan and a 401(k) Plan, both of which offer pre-tax and Roth (after-tax) options.

Military service and pension benefits

Military service can be credited towards your pension benefits in New York City. The New York City Employees' Retirement System (NYCERS) recognises military service as a type of service that can be counted towards retirement. This is defined as time spent on duty in a branch of the U.S. Armed Forces.

There are various laws that allow NYCERS members to purchase military service credit, and each law has different provisions. You are entitled to receive credit for military service under the law that provides you with the greatest benefit.

For example, under the Veterans Reemployment Rights Statute (VRR), veterans must have been employed by a participating employer of the Retirement System within six months prior to entering the military and must have applied for reemployment with the same employer within 90 days of their discharge date. The Uniform Services Employment Reemployment Rights Act (USERRA) replaced the VRR in 1994 and does not specify a time limit on employment prior to military service.

The cost of military service credit depends on which section of the law applies to your case, and in some circumstances, there is no cost. You can use the Benefit Projection Calculator to estimate your retirement benefit with and without the military service credit.

Additionally, the New York State Office of the State Comptroller's website states that if you served in the U.S. Armed Forces, you may be eligible to purchase credit toward your retirement benefit for your military service. This will increase your pension in most cases.

The New York City Deferred Compensation Plan (DCP) also allows eligible city employees to save for retirement through convenient payroll deductions. The plan includes a 457 Plan and a 401(k) Plan, both of which offer pre-tax and Roth (after-tax) options.

Retirement options

The New York City Employees' Retirement System (NYCERS) offers retirement benefits to over 300,000 active and retired New York City workers. There are several retirement options available to NYCERS members, including:

• Maximum Retirement Allowance: This option provides the greatest benefit payment to the member during their retirement, for as long as they live. However, under this option, no further payments will be made after the member's death.
• Option 1 (Return of Reserve): This option reduces the member's lifetime retirement allowance from the Maximum Retirement Allowance. It guarantees that a full amount of the Initial Reserve will be paid to the member in monthly payments and, upon their death, the remaining balance will be paid to their designated beneficiary.
• Option 2 (100% Joint-and-Survivor): This option is intended for the retiree who wishes to insure that after their death, a designated beneficiary will continue to receive a fixed annual lifetime benefit. The retirement allowance is paid to the retiree regardless of how long they live, and then payments continue to the surviving designated beneficiary for as long as they live.
• Option 3 (50% Joint-and-Survivor Benefit): Similar to Option 2, this option provides a lifetime retirement allowance that is reduced from the Maximum Retirement Allowance. Upon the member's death, one-half of the reduced retirement allowance is continued to be paid to the surviving designated beneficiary for life.
• Option 4 (Lump Sum Payment): This option allows the member to set aside a specific lump-sum benefit for their designated beneficiary upon their death. Their retirement allowance will be reduced from the Maximum Retirement Allowance.
• Option 4-2 and Option 4-3 (Pop-Up Joint and Survivor): If the retiree elects either of these options and the designated beneficiary dies before the retiree, the retiree's benefit will "pop up" to the Maximum Retirement Allowance.

It is important to note that members can also split their retirement allowance and receive payment of their Pension Reserve and Annuity Reserve under different options. Additionally, members have the flexibility to elect any form of payment that is the actuarial equivalent of their maximum retirement allowance, as certified by the NYCERS actuary.

Disability retirement

The New York City Employees' Retirement System (NYCERS) provides disability retirement kits for its members. These kits include detailed instructions and all the necessary forms and documents required to file for disability retirement. The specific forms and documents required depend on the member's tier.

For example, Tier 1 members need to fill out Form #601 - Application for Disability Retirement for Tier 1 Members, Form #606 - Physician's Report of Disability, Form #608 - General Authorization for Medical Information, Form #609 - Questionnaire – Applicants for Disability Retirement, and Form #615 - Authorization for Release of Information. They will also need Brochure #921 - Disability Retirement – Tier 1 and Tier 2 Fact Sheet, and Brochure #958 - Earnings Limitations for Service Retirees and Disability Retirees.

Similarly, Tier 2 members have their own set of forms and documents to complete, which include Form #602 - Application for Disability Retirement for Tier 2, and the same set of forms and brochures as Tier 1 members.

The process for filing for disability retirement is straightforward. Members with a registered MyNYCERS account can log in and apply for disability retirement online. Alternatively, they can choose to submit a paper application by downloading the relevant disability kit for their tier and mailing the completed forms to the NYCERS office in Long Island City, New York.

It is worth noting that NYCERS also offers other benefits to its members, such as retirement accounts, loans, refunds, and buy-back applications. They also administer the New York City Deferred Compensation Plan (DCP), which allows eligible city employees to save for retirement through payroll deductions, offering pre-tax and Roth (after-tax) options.

Survivor benefits

If you die before retirement, your beneficiary will be entitled to a survivor benefit, whether your death occurs on or off the job. Benefits are paid out as:

• An Ordinary Death Benefit
• A Presumptive Retirement Benefit (Death Gamble)
• An Accidental Death Benefit

Ordinary Death Benefit (ODB)

If you die while in active service and your death is not the result of an accidental injury sustained while performing your duties, your designated beneficiary will receive:

• A lump-sum payment equal to the amount in your ITHP Reserve Account
• A lump-sum payment equal to your Accumulated Deductions
• If you have less than 10 years of service credit, an amount equal to six months of your Earnable Salary
• If you have 10 or more years of service credit, an amount equal to 12 months of your Earnable Salary
• If you have 20 or more years of Career Pension Plan Qualifying Service, an amount equal to 24 months of your Earnable Salary

Presumptive Retirement Benefit (Death Gamble)

If you are eligible for a Service Retirement Benefit at the time of your death in active service, you are treated as though you had retired on the day before your death, and your beneficiary will be eligible to receive the greater of:

• The Ordinary Death Benefit, or
• An amount equal to the Initial Reserve for the retirement allowance which would have been payable to you if you had retired on the day before your death. The Initial Reserve is calculated as though you had selected Option 1.

Accidental Death Benefit

If NYCERS' Medical Board determines that your death was the natural and proximate result of an accident not caused by your own willful negligence, sustained while performing your duties in active service, an Accidental Death Benefit will be paid as follows:

• To your designated beneficiary (or to your estate if no valid designation is on file with NYCERS): A lump-sum payment equal to your Accumulated Deductions
• To your eligible beneficiary: A lump-sum payment equal to the amount in your ITHP Reserve Account plus a pension equal to 50% of your Final Compensation less 100% of any Workers' Compensation benefits

The following, in order of priority, are your eligible beneficiaries:

• Your surviving spouse, who has not remarried
• Your dependent child(ren) up to age 18
• Your dependent parents
• Any person you designate for your In-Service Ordinary Death Benefit

In the event that a class of eligible beneficiaries consists of more than one person (for example, two or more children under the age of 18), benefits will be divided equally among such persons.

Frequently asked questions