New York City Board of Education Retirement System

Age 55 Retirement Program

Tier 4 Summary

This summary explains the essential points of the new law which affects the retirement rights of BERS Tier 4 members.  Before making your decision, we recommend that you carefully read all relevant material in order to gain a clear understanding of your benefits and obligations.

Age 55 Retirement Program

The Age 55 Retirement Program is available to certain Tier 4 members who meet the eligibility criteria for the program. Participants in this program are required to make additional contributions which will enable them to retire as early as age 55 rather than the normal age 62 with unreduced retirement benefits.  There are two separate categories of participants under the program, the Twenty-five-year Participants and the Twenty-seven-year Participants, whose election, eligibility requirement, benefits and obligations differ.

Twenty-five-year Participants             

This program is optional for Tier 4 members who:

·      are in active service, that is, being paid on the payroll, and

·      on February 27, 2008 and on the date of application to participate, are employed in an eligible position with the New York City Department of Education or the New York City School Construction Authority ("education service").

Or who:

·      on February 27, 2008 were employed in eligible positions; or

·      were discontinued members with vested rights, or

·      were on leave of absence without pay and return to active service within 5 years,

·      were on suspension without pay,

·      and who later becomes a member in active service in an eligible position.

Twenty-seven-year Participants

This program is optional for Tier 4 members who:

·      on February 27, 2008 were on leave of absence without pay, and

·      who later return to active service in an eligible position, after 5 or more years of beginning the leave.

This program is mandatory for Tier 4 members who:

·      are in active service in an eligible position after February 27, 2008 and on the date of application to participate, are employed in an eligible position with the New York City Department of Education or the New York City School Construction Authority ("education service"), and

·      first establish membership in a the retirement system after February 27, 2008.

Eligible positions

For both Twenty-five-year and Twenty-seven-year Participants are positions in education service as:

Eligibility

Twenty-five-year Participants

To elect to participate in the Age 55 Retirement Program, members must submit an application to BERS.  Members who were in active service in an eligible position on February 27, 2008 and who want to participate must submit an application no later than 5:00p.m. on August 25, 2008.  A member must be in active service, being paid on payroll, in an eligible position on the date of application.

Any Tier 4 member whose membership date is after February 27, 2008 and who was in an eligible position in active service on February 27, 2008 must submit an application to participate within 180 days of their membership date, that is after becoming an eligible member in active service.

A member on February 27, 2008 who is on an approved leave of absence without pay and returns to active service, being paid on payroll, within 5 years after beginning the leave, or who is on suspension without pay from an eligible position, who is later reinstated to active service, being paid on payroll, in an eligible position, may elect to participate in the program.  To participate, a member must submit an application to participate within 180 days of becoming an eligible member in active service.

This program is also available to any person who, on February 27, 2008 was a discontinued member not in active service who was entitled to a deferred vested benefit and who later becomes a member in active service, being paid on payroll, in an eligible position.  To participate, a discontinued member must submit applications to participate within 180 days of becoming an eligible member in active service.

In all cases, the member must be in active service on the date of application.  Any person who fails to apply within the specified period will not thereafter be eligible for the program.

The decision to participate is irrevocable, except for participants who cannot possibly accumulate 25 years of credited service by age 62.  Such members may withdraw within 365 days of their application date.

When participants terminate service in eligible positions and later return to any of the eligible positions, they will again become participants.  If they receive refunds of the employee portion of their contributions, those contributions are required to be repaid, with interest.

Twenty-seven-year Participants

Participation is automatic and begins on the membership date of the Participant.

Any Tier 4 member whose membership date is after February 27, 2008 and who becomes an eligible member in active service at any time after establishing membership in the retirement system (for example, a person who transfers from a non-participating system or a member who moves into an eligible position) will automatically become a participant in the program.

When a participant terminates service in an eligible position and later returns in an eligible position, they will again become a participant.  If they receive a refund of the employee portion of their contributions, those contributions are required to be repaid, with interest.

A member who, on February 27, 2008, was on an approved leave of absence without pay and returns to active service, being paid on payroll, after 5 or more years of beginning the leave, and who later returns to active service, being paid on payroll, in an eligible position, may elect to participate in the program.  To participate, a member must submit an application to participate within 180 days of becoming an eligible member in active service.

Service Retirement

Twenty-five-year Participants

Participants in the Age 55 Retirement Program who are eligible for service retirement, who have completed at least 25 years of credited service, who have paid all the contributions required under the program, and who are in active service at the time of retirement, may retire as early as age 55 without benefit reductions.  However, no one can retire under the program prior to June 30, 2008.

Twenty-seven-year Participants

Participants in the Age 55 Retirement Program who are eligible for service retirement, who have completed at least 27 years of credited service, who have paid all the contributions required under the program, and who are in active service at the time of retirement, may retire as early as age 55 without benefit reductions. 

Both Twenty-five-year and Twenty-seven-year Participants in the Age 55 Retirement program who have not paid all the required contributions will have a contribution deficiency and at the time of retirement will have their retirement allowance reduced by a lifetime annuity actuarially equivalent to any unpaid contribution deficiency and unpaid loan.

Vesting

Twenty-five-year Participants

Participants in the Age 55 Retirement Program who on or after June 30, 2008 discontinue education service, who have completed at least 25 years of credited service, who have paid all the contributions required under the program, and who do not withdraw all or part of their accumulated deductions, will automatically be entitled to receive deferred vested benefits on the earliest date that the participants could retire for service had the participant not discontinued service (that is, at age 55) without benefit reductions. 

Twenty-seven-year Participants

Participants in the Age 55 Retirement Program who on or after June 30, 2008 discontinue education service, who have completed at least 27 years of credited service, who have paid all the contributions required under the program, and who do not withdraw all or part of their accumulated deductions, will automatically be entitled to receive deferred vested benefits on the earliest date that the participants could retire for service had the participant not discontinued service (that is, at age 55) without benefit reductions.

Contributions

Twenty-five-year Participants      

Participants will contribute an additional 1.85% of their compensation.  The additional contributions will be applied to compensation earned from March 2, 2008.  Upon payment of the additional contributions into the system, 50% of the additional contributions are deemed to be employer contributions and 50% are deemed to be employee contributions.

Participants will make additional contributions until June 29, 2008 or until they complete 25 years of service, whichever is later.

Twenty-seven-year Participants

Participants will contribute an additional 1.85% of their compensation.  The additional contributions will be applied to compensation earned from all credited service rendered while a participant, and before becoming a participant, whether or not rendered in a eligible position before or after March 2, 2008.  Upon payment of the additional contributions into the system, 50% of the additional contributions are deemed to be employer contributions and 50% are deemed to be employee contributions.

Participants will make additional contributions until they complete 27 years of service.

For both Twenty-five-year and Twenty-seven-year Participants, only that portion credited as employee contribution (plus interest thereon) can be borrowed, refunded or withdrawn.  Refunds and withdrawals are permitted only in the event of death, disability retirement, discontinuance of participation in the first year (as explained in Eligibility previously), retirement at or after age 62 (with active service in at least 6 months in each of the previous two 12-month periods), transfer to an ineligible position in another public employment retirement system or termination for economic reasons.     

Payments of additional contributions for compensation earned after becoming a participant are tax deferred and will be made via payroll deductions.  They will begin with the full payroll period after becoming a participant, or as soon thereafter as practicable.