Despite the many retirements in the last few years, the bulk of educators in the NYC school system are still covered under New York State's Tier 4 pension system. Therefore, I prepared a simple chart that helps one to determine their pension at retirement.
The chart shows the percentage of the Final Average Salary (FAS) that the educator will receive, based upon age, and years of service. This chart excludes any educator who participates in the 25/55 program and those who receive a disability pension.
Final Average Salary (FAS):
The FAS is calculated as the highest three consecutive years which are usually the last three years that an educator works. However, to ensure that the educator doesn't pad their pension in the last year, there is a 10% cap. That means that if any one year is greater than 110% of the FAS, than that year's salary is capped at 110% and not higher. To get a present day estimate of your FAS, you can go on the TRS website and look it up under benefit estimates . However, the TRS website does not include per session, coverages, or 683 money in their pension calculation, just your base salary.
Years of Service:
The years of service is credited when you have completed the year not at the start of the year.
Multiplier:
The multiplier used to determine the educator's pension is based upon the years of service completed. The table below shows the completed years of service and the multiplier.
Years of Service Multiplier
Less than 20 years....................1.67%
20 years or greater....................2.0%
Over 30 years..........................1.5%*
* Note: the 1.5% multiplier is for every completed year above 30.
Age Correction Factor:
No educator can receive a regular pension before the age of 55. Between 55 and 61 years of age, the pension is reduced by the age correction factor. However, if the educator is part of the 25/55 program or has completed 30 years of service, no age correction factor is used.
Finally, the chart assumes the maximum single educator payout (option 1). If you intend to put a spouse as a recipient of your pension, the final pension will be reduced by as much as 15%, depending on the option selected and the age of the spouse.
Example 1:
Educator with 15 years experience with an FAS of $85,000 wants to retire at 57.
$85,000 x 19.8% = $16,830
Example 2:
Educator with 25 years of experience with an FAS of $104,000 wants to retie at 62.
$104,000 x 50% = $52,000
Example 3:
Educator with 34 years of experience with a FAS of $110,000 wants to retire at 55.
$110,000 x 66% = $72,600.
Example 4:
Educator with 19 years of experience with a FAS of $90,000 wants to retire at 62,
$90,000 x 31.7% = $28,530
Example 5:
Educator with 22 years of experience with a FAS of $102,000 wants to retire at 55.
$102,000 x 32.1% = $32,742.
Example 6:
Educator with 10 years of experience with an FAS of $75,000 wants to retire at 55.
$75,000 x 12.2% = $9,150.