2026-27 State Budget Measures Affecting NYSLRS

The recently approved 2026-27 New York State Budget includes new laws which affect the New York State and Local Retirement System (NYSLRS). The following information only pertains to members of the Employees’ Retirement System (ERS) and the Police and Fire Retirement System (PFRS), which are administered by NYSLRS. It does not explain how the law affects benefits for members of other New York State public retirement systems, such as the New York State Teachers’ Retirement System (NYSTRS), New York City Teachers’ Retirement System (NYCTRS) or the New York City Employees’ Retirement System (NYCERS). 

Benefit Improvements for Tier 5 and 6 Members

Reduced Contribution Rates for Tier 6 Members

For members of Tier 6, you are required to contribute a percentage of your earnings for all your years of public service, and your contribution rate is determined by your annual earnings. However, the law reduced contribution rates, now requiring most Tier 6 members to contribute only 3 percent.

Effective October 1, 2026,Tier 6 member contribution rates are as follows:

Increased Overtime Limits for Tier 5 and 6 Members

For members of Tiers 5 and 6, the law limits the amount of overtime pay included in the calculation of your final average earnings (FAE), which is used to determine your NYSLRS pension. Overtime pay above the limit is not factored into your pension. However, the law increased the annual overtime limits, allowing more overtime pay to be included in the calculation of your pension benefit. 

Effective January 1, 2027:

• For ERS Tier 5 and 6 members, the overtime limit for calendar year 2027 is $30,000 (currently, the limit for 2026 is $21,589) and increases by 3% each calendar year thereafter.
• For PFRS Tier 5 and 6 members, the overtime limit is 25% of your pensionable, non-overtime earnings (currently, the limit is 15%).

Changes to Special Retirement Plans

Improved Death Benefits for Corrections Officers and Security Hospital Treatment Assistants

For members employed as correction officers and security hospital treatment assistants, the law amended your death benefits. If you die while in active service and you were eligible to retire at the time of your death, your beneficiary(ies) will receive an in-service death benefit equal to the value of the pension reserve as if you had retired on the date of your death. “Pension reserve” is an actuarial term for the value of your retirement benefit at the time of retirement.

Revised Contribution Rates and Creditable Service for Section 383-e and 383-f Plans

For Forest Rangers, Police Officers with the Department of Environmental Conservation, Regional State Park Police Officers and SUNY Police Officers covered under the Section 383-e and 383-f plans, the law revised contribution rates and creditable service as follows:

• Reduces member contribution rates so they are in line with other Tier 5 and 6 members.
  • Tier 6 members: see chart above 
  • Tier 5 members: 3%
• Allows members to receive credit for service as a New York State Trooper and for additioanl years of service beyond 12 (but still limited to 15) to be included in the calculation of their pension. 

The law also extended the deadline to elect coverage in these plans from June 30, 2026 to December 31, 2026 or within one year of employment in an eligible title.