New Laws Affecting Tier 6 Contribution Rates

The 2026-27 New York State Budget includes new laws which affect Tier 6 contribution rates:

  • Reduces Tier 6 contribution rates effective October 1, 2026.
  • Excludes overtime pay temporarily from the calculation of Tier 6 contribution rates.

NYSLRS will be working closely with you to make the necessary changes.

 

Reduced Tier 6 Contribution Rates Effective October 1, 2026

A new law reduced Tier 6 contribution rates effective October 1, 2026.

Annualized Wage
or Actual Earnings		Contribution Rate
Through 9/30/26		Contribution Rate
Effective 10/1/26
$45,000 or less3.00%3.00%
$45,000.01 to $55,0003.50%3.00%
$55,000.01 to $75,0004.50%3.00%
$75,000.01 to $100,0005.75%4.00%
$100,000.01 to $125,0006.00%5.25%
$125,000.01 or greater6.00%5.75%

Immediate Action Required

If you have a Reporting or Payroll Security Role, view the member contribution rates in Retirement Online, then update your payroll system and monthly report.

IMPORTANT: Additional Contribution Rate Changes

The contribution rate you initially received when enrolling your employee may no longer be accurate if you:

  • Enrolled a new employee between 9/16/2026 and 10/01/2026.
  • Added a new job (created a new employment instance) for an existing employee between 9/16/2026 and 10/1/2026.
  • Retroactively enrolled a new employee with a hire date before 10/01/2026.
  • Retroactively added a new job (create a new employment instance) for an existing employee with a transaction date before 10/01/2026.

Check Rates Again Before Running Payroll

Review the Member Contributions Rates page again before you run payroll to determine whether there are any additional changes to your employees’ contribution rates since you last checked.

View Member Contribution Rates

The updated contribution rates for impacted members are available in Retirement Online.

  • Sign in to Retirement Online.
  • Click Access Reporting Dashboard button.
  • After choosing location code, click Member Contribution Rates link.
  • Click Search button.

To sort the table based on when contribution rates were updated:

  • Click Last Updated Date column header.
  • Review rows with a Last Updated Date of 09/16/2026 or later.

Update Payroll System and Monthly Report

Beginning October 1, 2026, you should have updated your payroll system with the new contribution rates to ensure you withhold the correct amount.

Beginning with your October monthly report (or if you do not report monthly, beginning with the report that includes earnings for October), use the amount withheld for member contributions based on the new rates in your payroll system.

As a reminder, the new Tier 6 contribution rates are not retroactive to April 1, 2026. Therefore, refunds will not be necessary for changes to contribution rates effective October 1. However, in the coming months, we will begin working with you to determine whether your employees are impacted by the law that temporarily excludes overtime pay from the calculation of Tier 6 contribution rates which is retroactive to April 1, 2026.

Failure to Adjust Rates Will Require You to Refund Impacted Employees

If a member’s contribution rate decreased and you did not decrease the amount withheld, your Report Summary will have “Excess Withholdings,” and you will need to refund contribution overpayments to your employee. The Excess Withholdings on your Report Summary will provide the total overage amount. To determine who is owed a refund and the amount due, refer to the Improper Withholdings page.

Check for Excess Withholdings on Your Report Summary

  • From Account Homepage, click Access Reporting Dashboard button.
  • After choosing location code, click MM/DD/YYYY link in Report Date column for the report you want to view.
  • In your Report Summary, review:
    • Total Withholdings Accepted: The total amount NYSLRS accepted.
    • Excess Withholdings: The total amount withheld above what was required which was not accepted by NYSLRS.

Find Refund Amounts by Employee on the Improper Withholdings Page

  • From Account Homepage, click Access Reporting Dashboard button.
  • After choosing location code, click Improper Withholdings link.
  • Enter dates in Payroll End Date From and Payroll End Date To fields.
  • Click Search button.

For each employee listed, refund the Excess Amount. Once refunds are issued, update your payroll system to avoid withholding too much again and submit an adjustment report for the changes.

 

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Overtime Pay Temporarily Excluded from the Calculation of Tier 6 Contribution Rates

The law also temporarily excludes overtime pay earned from April 1, 2024 through March 31, 2026 from the calculation of Tier 6 contribution rates, lowering the percentage some Tier 6 members are required to contribute from April 1, 2026 through March 31, 2028.

To remove overtime pay from the calculation of Tier 6 contribution rates, NYSLRS requires detailed earnings information from employers. Therefore, we are issuing the contribution rates effective October 1, 2026 while we work with you to obtain the information needed for Tier 6 members impacted by this part of the law.

If your organization submitted any legacy reports from April 1, 2024 through March 31, 2026, we will email Reporting Contacts in the coming months to request earnings breakdowns for your Tier 6 members. However, with more than 485,000 Tier 6 members, it will take several months to review past earnings, recalculate rates and refund overpayments.

Tier 6 Members Affected

The law may affect Tier 6 members who:

  • Joined NYSLRS before:
    • April 1, 2024 for the contribution rates effective April 1, 2026-March 31, 2027; or
    • April 1, 2025 for the contribution rates effective April 1, 2027-March 31, 2028;
  • Make mandatory contributions toward their retirement (most Tier 6 members);
  • Contribute more than the minimum 3 percent; and
  • Earned overtime from April 1, 2024 through March 31, 2026.

It will not affect Tier 6 members who:

  • Joined NYSLRS on or after:
    • April 1, 2024 for the contribution rates effective April 1, 2026-March 31, 2027.
    • April 1, 2025 for the contribution rates effective April 1, 2027-March 31, 2028.

(Note: A new Tier 6 member’s contribution rate is based on their projected annual wage which is not impacted by the law.)

  • Already pay the minimum rate of 3 percent.
  • Did not earn overtime from April 1, 2024 to March 31, 2026.

Contribution Rates for April 1, 2026 through March 31, 2027

Earnings

If your organization has been using enhanced reporting since April 2024, we will begin reviewing the earnings we have on file. If not, we will email Reporting Contacts to request earnings breakdowns from April 1, 2024 through March 31, 2026 for Tier 6 members affected by this part of the law.

Note: If an employee works for more than one employer, we cannot begin reviewing their earnings until we have detailed information from all their employers.

Contribution Rates

We will recalculate contribution rates for April 1, 2026 through March 31, 2027 to exclude overtime pay earned from April 1, 2024 through March 31, 2025 and use the reduced rates effective October 1, 2026. We will notify you when the new contribution rates are available in Retirement Online.

Refunds

As a result of excluding overtime pay from the calculation of Tier 6 contribution rates, some members may have overpaid contributions to NYSLRS since April 1, 2026. We will issue a credit for the total amount of all your employees’ refunds and provide a list of the employees and the amount owed to each. You will be responsible for reimbursing each employee per the information we provide.

Contribution Rates for April 1, 2027 through March 31, 2028

When we calculate contribution rates for April 1, 2027 to March 31, 2028, we will exclude overtime pay earned from April 1, 2025 through March 31, 2026 and use the contribution rates effective October 1, 2026. Therefore, we will not need to recalculate rates or issue refunds again.

 

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If You Need Help

If you have a question or for help with Retirement Online, use our help desk form (select Monthly Employer Reporting or Retirement Online Troubleshooting from the dropdown) or call 866-805-0990 (press 1 to access the employer menu, then follow the prompts).

If your employees have questions, encourage them to visit our Member Contributions page. We will update it as information becomes available.

 

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Rev. 10/26