Nassau and Suffolk County: Police, Sheriffs, and Senior County Staff

Where the money is

The two salary caps, and the earnings that never reach the pension

Two ceilings sit above final average earnings, and a senior salary can hit either.

The federal cap. For anyone who joined on or after April 1, 1996, earnings above the Internal Revenue Code section 401(a)(17) limit cannot be used in a pension calculation. NYSLRS applies the limit by plan year: $350,000 for April 1, 2025 to March 31, 2026, and $360,000 for April 1, 2026 to March 31, 2027. Some medical directors, commissioners and long-serving police brass with overtime do.

The Governor’s salary cap, Tier 6 only. For Tier 6 members of both ERS and PFRS, earnings above the Governor’s annual salary are excluded from final average earnings. The Governor’s salary has been $250,000 since January 1, 2021, and it changes only by joint resolution of the Legislature. A Tier 6 police lieutenant earning $275,000 with overtime, or a Tier 6 deputy county executive at $280,000, is building a pension on $250,000. Tier 4 and Tier 5 members are not subject to this cap.

The overtime ceilings. Tier 5 and Tier 6 members have a separate hard cap on pensionable overtime, $21,589 in 2026 for ERS, rising to $30,000 on January 1, 2027 and 3% a year after that. PFRS Tier 5 and 6 members are limited instead to overtime of 15% of earnings. For a Suffolk or Nassau police officer whose overtime is a third of gross pay, the difference between pay and pensionable pay is the largest single number on the retirement estimate, and it is the one the annual statement does not spell out.

Everything above these caps is retirement income you have to build yourself. That is the point of the deferred compensation section below.

Police: the 20-year plan, the 32-year ceiling, and the age-62 adjustment

Nassau and Suffolk police are in PFRS, which is part of NYSLRS but a separate system from ERS with its own tiers. Under Section 384-d you may retire with 20 or more years of creditable service regardless of age, at 50% of final average earnings. Where the employer has adopted Section 384-e, each year beyond 20 adds 1.66% of final average earnings, to a maximum of 70% at 32 years. Section 384-e(b), where adopted, credits 1.66% for each year of prior public service before the police career. At 55, if the regular plan would pay more, the greater benefit is paid. The 384-d benefit is not available to Tier 3 members.

Final average earnings for PFRS is the average of the highest three consecutive years. Some employers adopted a one-year final average earnings benefit; Tier 6 members qualify only if the employer adopted it before April 1, 2012, and earnings in that year above 120% of the prior twelve months are excluded.

Put the pieces together for a Suffolk County police officer at the top of the scale. Thirty-two years of service, final average earnings of $225,000 after the overtime limit, retiring at 54: 70% is $157,500 a year, unreduced, for life, with the COLA on the first $18,000 beginning at 55 after ten years retired. That officer will collect for longer than he served. The two decisions that follow, the option election and what to do with the deferred compensation balance, are made against that number.

One item deserves a specific warning. PFRS Tier 3 members under Article 14 have a Social Security Adjustment that reduces the pension at age 62 by half of the primary Social Security benefit attributable to New York public service, whether or not you actually claim Social Security. This is a plan provision, not the Windfall Elimination Provision, and it was not repealed by the Social Security Fairness Act.

The option election on a six-figure pension

At retirement you choose how the pension is paid, and the choice is worth more than any investment decision you will make afterward. The Single Life Allowance pays the most and stops at your death. The Joint Allowance options continue 100%, 75%, 50% or 25% of your pension to one beneficiary for life; the Pop-Up Joint Allowance options do the same but restore your pension to the Single Life amount if the beneficiary dies first. The Five-Year and Ten-Year Certain options guarantee payments for a fixed period to beneficiaries you can change at any time. Two Cash Refund options return your contributions or the initial value of the pension. NYSLRS will also consider written requests for other payment methods.

The reduction for a Joint Allowance is based on your birth date and your beneficiary’s. On a $157,500 pension, the gap between the Single Life Allowance and a 100% Pop-Up Joint Allowance for a spouse a few years younger is typically in the low five figures a year, every year. Whether that is the right price depends on the spouse’s own pension, the deferred compensation balance, life insurance already in force and the survivor’s likely tax position, all of which should be on one page before the election, not after.

The deadlines are absolute. You have 30 days after the first day of the month following your retirement date to change the option, and 30 days after the last day of your retirement month to change the beneficiary. After that, under a Joint Allowance or Pop-Up Joint Allowance, NYSLRS states you cannot change the beneficiary for any reason. Divorce does not reopen it.

Rather go through this with your own numbers? We can cover it in a short conversation, at no charge and with no obligation. Book your Pension Review

The 457(b) balance the pension never touched

A police officer or department head who deferred the maximum for twenty-five years and retires with a pension that already covers spending has a second problem the pension pages never mention: a deferred compensation balance of $800,000 to $1.5 million that has no job to do yet and a required distribution date that is coming.

The limits for 2026: $24,500 of deferrals, plus $8,000 at age 50 or older, or $11,250 in the years you are 60 through 63. A governmental 457(b) also allows a special catch-up in the three years before the plan’s normal retirement age of up to twice the annual limit, in place of the age-50 catch-up in those years. A commissioner earning $240,000 at 58 with three years to go can move $49,000 a year into the plan on top of the pension accrual.

Distributions from a governmental 457(b) are not subject to the 10% early distribution tax at any age, which is what makes retiring at 50 workable: the 457 bridges the years before Social Security without penalty, while an IRA or 401(k) would penalize withdrawals until 59½. Rolling the 457 into an IRA gives that up. Money rolled into the 457 from a 401(k) or 403(b) keeps its original penalty exposure. Required minimum distributions begin at 73, and at 75 for anyone born in 1960 or later, whether the money is needed or not; on a $1.2 million balance the first required withdrawal is roughly $45,000 of ordinary income added to a pension that is already six figures, which is where the Medicare premium brackets and the New York exclusion below start to matter.

Working after retirement: $35,000 in public employment, unlimited in private

A retiree under 65 who returns to work for New York State or any of its public employers is limited to $35,000 of earnings a year under Section 212 of the Retirement and Social Security Law (the figure since 2020), unless the employer obtains a Section 211 waiver before hiring. The limit ends in the calendar year you turn 65. Earnings from a private employer, the federal government or another state are unlimited at any age. A retired detective taking a corporate security role at $180,000 is not affected; the same person taking a school district security position at $60,000 is, and if the limit is exceeded without a waiver NYSLRS requires either repayment of the pension paid after the date the limit was reached or rejoining the system, which stops the pension until you retire again.

Reference

The reference material: tiers, cliffs, and the rules every member needs

What follows applies to every ERS member: the tiers, the reduction tables, the 20-year cliff, the rules on final average earnings, sick leave, loans, deadlines, the special plans, Social Security, deferred compensation providers and New York taxes. Read it once. The senior-end decisions above are made on top of it.

Find your tier first

ERS Tier	You joined
4	September 1, 1983 to December 31, 2009
5	January 1, 2010 to March 31, 2012
6	April 1, 2012 or later

If you are retiring within ten years at a normal career length, you are almost certainly Tier 4. Tier 5 is a narrow 27-month window and represents under 4% of active ERS members.

The reduction tables, and why Tier 6 is a different world

All tiers can retire at 55. What it costs you differs enormously.

Age	Tier 4 reduction	Tier 5	Tier 6
63	0%	0%	0%
62	0%	0%	6.5%
60	12%	13.33%	19.5%
58	18%	23.33%	32.5%
55	27%	38.33%	52%

The Tier 4 exception that matters most: with 30 or more years of service credit, there is no reduction at all, at any age from 55. Tier 5 and Tier 6 general employees have no equivalent. A Tier 6 member retiring at 55 gives up 52% of the benefit, permanently. NYSLRS is explicit that the reduction does not end when you later turn 63.

The 20-year cliff

Under Tier 4, service is credited at 1.66% per year below 20 years. At 20 years the rate becomes 2% and applies to every year. In plain numbers: 19 years produces about 31.5% of final average salary; 20 years produces 40%. Past 30 years, each additional year adds 1.5%.

Tier 6 has the same shape with different figures: 1.66% below 20 years, then 35% at 20 years plus 2% for each year beyond.

One month of work can be worth several percentage points of your salary for life.

Final average earnings, the 10% cap, and what is thrown out entirely

Your benefit is based on the average of your highest three consecutive years of earnings. Tier 6 used five years until April 2024, when it was changed to three, matching the other tiers.

If earnings in any twelve-month period of that average exceed the average of the previous two years by more than 10%, the excess is not counted.

Included: regular pay, overtime, compensatory overtime, holiday pay, one longevity payment per year, and retroactive payments.

Excluded entirely: unused sick leave, payments for working your vacation, any form of termination pay, payments made in anticipation of retirement, and any payment for time not worked.

A large final-year check does not raise your pension. Most of what makes a final year lucrative is on the excluded list.

Tier 5 and Tier 6 members have a separate hard cap on pensionable overtime, $21,589 in 2026. A law raises it to $30,000 effective January 1, 2027, increasing 3% each year after.

The sick leave rule people misunderstand

If your employer has adopted Section 41(j), unused sick leave converts to service credit at 260 days per year, generally capped at 100 days.

It cannot be used to reach a threshold. It will not carry you from 19.5 years to 20 for the 2% multiplier, it will not get you to 30 years for the unreduced Tier 4 benefit, and it will not reach 25 years in a special plan. It adds to a benefit you have already qualified for. It does not qualify you.

Pay off your NYSLRS loan before you retire

Retiring with an outstanding NYSLRS loan permanently reduces your pension, and you will report at least part of the balance as ordinary income. Below age 59 and a half the IRS may add a 10% penalty.

You can repay after retirement, but only as a single lump sum of the full balance owed at retirement, and the restored benefit is not adjusted retroactively. Every month between your retirement date and the repayment is gone.

Deadlines that are absolute

• Retirement application: at least 15 days but no more than 90 days before your retirement date. Paper forms must be notarized; Retirement Online filings need not be.
• Service credit purchase: the request must be received before your retirement date. Purchased service also requires two years of member service before it is credited, so this belongs on a list years out.
• Payment option election: Article 15 Tier 4, 5 and 6 members must elect by their retirement date. If you do not elect, you are processed as Single Life Allowance, which pays a surviving spouse nothing. You then have 30 days after the first of the month following retirement to change it, and after that the option and the beneficiary are locked. NYSLRS states you cannot change a joint allowance beneficiary “for any reason.”

NYSLRS publications differ slightly on the election deadline. Elect on or before your retirement date and the ambiguity cannot hurt you.

If you are a correction officer, sheriff, or probation officer

Nassau County sheriffs, undersheriffs, deputy sheriffs and correction officers, and Suffolk County correction officers, are generally covered automatically under special plans paying 50% of final average salary at 25 years of creditable service, regardless of age. Nassau and Suffolk probation department peace officers and Suffolk park police have their own 25-year plans.

Four things differ from the regular plan, and the third is the one that gets missed:

1. No age requirement. A 47-year-old with 25 years retires unreduced.
2. The cliff is 25 years, not 20.
3. The special plan generally caps at 50% of final average salary. A long-service member can do better under the regular ERS plan, where 35 years yields 67.5%. NYSLRS compares the two and pays the greater, but you should know which one you are actually heading toward.
4. COLA eligibility is more generous: age 55 and ten years retired, rather than 62 and five.

Coverage depends on title, tier, employer adoption, and in some cases a historical election. Confirm yours in Retirement Online rather than assuming.

The Social Security Fairness Act, honestly

The Act, signed January 5, 2025, repealed WEP and GPO for benefits payable from January 2024 forward.

For a county employee in a covered position, it changes nothing. WEP and GPO applied only to pensions from employment where Social Security taxes were not withheld. If your county pay stub shows Social Security or OASDI withholding, and Box 4 of your W-2 has a number in it, WEP and GPO were never touching you. There is no back payment and nothing to file.

It does help someone with additional non-covered service, such as certain New York City system employment, out-of-state public work in a non-covered state, or federal CSRS.

Deferred compensation: check whose plan you are actually in

A common assumption is that county employees are in the New York State Deferred Compensation Plan. Nassau County employees are not. Nassau sponsors its own 457(b), with Empower as administrator and recordkeeper, covering all county employees including Nassau Community College. Nassau added a separate 401(a) plan in 2024, administered by BENCOR.

Suffolk County also sponsors its own plan. Confirm your provider with Suffolk County Human Resources rather than relying on any summary.

The rule underneath this: a local government may sponsor only one deferred compensation plan, and it may join the State plan, adopt the Model Plan, or run its own. Which one your employer chose determines where your money is.

The early access advantage

A governmental 457(b) is generally not subject to the 10% early distribution penalty. Leave employment at 52 under a 25-year plan, or at 55 with 30 years under Tier 4, and your 457(b) is reachable immediately while an IRA or 401(k) would penalize you until 59 and a half.

Two consequences follow. Rolling a 457(b) into an IRA destroys that advantage. And money rolled into a 457(b) from a 401(k) or 403(b) keeps its original penalty exposure; the 457 wrapper does not cleanse it.

New York taxes

Your NYSLRS pension is fully exempt from New York State income tax, regardless of age and with no dollar cap, subtracted on Form IT-201 line 26.

The separate $20,000 pension and annuity exclusion, on line 29, requires age 59 and a half and applies to other retirement income. Because your NYSLRS pension is already fully excluded, that $20,000 stays available for your deferred compensation and IRA distributions. Married couples who both have pension income each get their own $20,000.

Note the asymmetry: the pension comes off in full, but a governmental 457 distribution is treated as ordinary pension and annuity income eligible for the $20,000 exclusion, not as an exempt government pension. Confirm the treatment of a lump sum distribution with your tax preparer before taking one.