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New York State and Local Employees’ Retirement System

Chapter 9
Your Retirement Benefits

New York State Office of the State Comptroller
Thomas P. DiNapoli

(Rev. 7/13)

Table of Contents

A Message From State Comptroller Thomas P. DiNapoli

Thomas P. DiNapoli

Dear Member:

This book describes your New York State and Local Retirement System benefits and can be a valuable
resource — especially now, as you approach retirement.

I want to make sure you thoroughly understand your benefits so you can successfully plan for retirement.

We also offer other pre-retirement planning resources including:

In addition, you can find retirement-related information on our website at www.osc.state.ny.us/retire.

I am joined by a staff of dedicated professionals in my commitment to help you make informed decisions about your future.
I encourage you to contact us with any questions you have because we believe it is critical for you to plan for your tomorrows... today.

Sincerely,

Thomas P. DiNapoli

State Comptroller

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Your Membership in the Retirement System

As a public servant in New York State, and a member of one of the world’s largest public pension systems, you are covered by a retirement plan that provides important benefits. Whether you have just joined or have been a member your entire career, it is important to know about these benefits.

The New York State and Local Retirement System (NYSLRS) is a defined benefit plan. Your retirement benefit will be based on factors such as your tier, retirement plan, service credit, final average salary (FAS) and age at retirement.

This publication clarifies the factors that affect your retirement benefits and gives examples of how those benefits are determined. It also takes you step-by-step through the retirement process and provides information regarding a variety of post-retirement matters.

Please contact us whenever you have questions about your benefits.

Contact Information

Call Center

1-866-805-0990 (Toll-free)

1-518-474-7736 (Albany, New York area)

Email

www.osc.state.ny.us/retire

Select “Contact Us”

Mail

New York State and Local Retirement System

110 State Street

Albany, NY 12244-0001

Fax

1-518-402-4433

Retirement Consultations

Retirement consultations are available via the telephone or at locations throughout the State. To schedule an appointment, contact our Call Center toll-free at 1-866-805-0990, or 518-474-7736 in the Albany, New York area.

Appointments are needed for individual consultations at all sites. However, with the exception of our New York City site, members do not need an appointment to drop off forms, pick up information or have something notarized. Our Albany office hours are 8:30 am – 4:30 pm. Office hours at all other sites are 9:00 am – noon and 1:00 pm – 4:00 pm. All sites are closed on legal holidays.

When visiting any of our sites, please bring photo identification and any recent Retirement System correspondence. If you require special accommodations, contact our Call Center at least two weeks in advance of your visit and we will make a reasonable effort to meet your needs.

Consultation Site Offices

City/ Village Address Monthly Visiting Days
Albany 110 State Street Every Business Day
Binghamton Binghamton State Office Bldg.
44 Hawley St., Room 606
Every Tuesday
Buffalo Walter J. Mahoney State Office Bldg.
65 Court St., Room 500
Every Business Day
Canton SUNY at Canton, off Route 68
Campus Center, 2nd Floor
First Thursday
Hauppauge 330 Motor Parkway, Suite 107 Every Business Day
Middletown Hudson Valley DDSO
42 Rykowski Lane
Second & Fourth Thursday
New City Sain Building
18 New Hempstead Road
First & Third Friday
New York City 59 Maiden Lane, 30th Floor
Entrance between William St. and Nassau St.
Every Tuesday & Wednesday
Plattsburgh County Center, 137 Margaret St.
1st floor, County Clerk’s Office
First & Third Thursday
Poughkeepsie Eleanor Roosevelt State Office Bldg.
4 Burnett Blvd.
Second & Fourth Friday
Rochester DOT Building
1530 Jefferson Rd., Henrietta
Every Thursday
Syracuse 620 Erie Blvd. West, Suite 113 Every Friday
Utica Utica State Office Bldg.
207 Genesee St., Ground Floor
First, Second, Third & Fourth Monday
Watertown Jefferson Co. Human Svcs. Bldg.
250 Arsenal St., Lower Level Conf. Rm.
First Wednesday
White Plains Clarence D. Rappleyea Bldg.
123 Main St., 1st Floor
Every Wednesday

NOTE: Always check our website (www.osc.state.ny.us/retire/consultation_site_offices) for the most current consultation site schedule as locations and monthly visiting days can change.

Your Membership Tier

Members are categorized into different groups or tiers based on their date of membership in the Retirement System. There are six tiers in the Employees’ Retirement System (ERS).

Tier status determines the following:

You Are In: If You Joined:
Tier 1 Before July 1, 1973
Tier 2 July 1, 1973 through July 26, 1976
Tier 3 July 27, 1976 through August 31, 1983
Tier 4 September 1, 1983 through December 31, 2009
Tier 5 January 1, 2010 through March 31, 2012
Tier 6 April 1, 2012 or after

NOTE: There is no Tier 4 for all New York State correction officers or security hospital treatment assistants. If you joined July 27, 1976 through December 31, 2009, you are a Tier 3 member.

Tier Reinstatement

If you had a previous membership in this System, or any of the following public retirement systems, your service may be recredited and your date of membership and tier restored. However, an earlier tier of membership does not always result in a better benefit. Please contact us regarding your previous membership and the potential for reinstatement.

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Service Credit

As a member, you earn service credit for your public employment while on the payroll of a participating employer in the Retirement System. Your service credit forms the basis for eligibility and/or the calculation of death benefits, vested rights, service retirement, disability retirement and member loans. Since your benefits are directly related to your service credit, it is important to make sure you have credit for all your allowable service.

Service Crediting

The number of hours that constitute a standard workday is established by your employer and, for Tier 2, 3, 4, 5 and 6 members, must be a minimum of six hours per day, 30 hours per week. Your workdays are reported to us by your employer(s). Generally, 260 workdays per year are equivalent to full-time credit, except for members employed in an educational setting (see bulleted information below).

Regardless of your membership tier, credit is not given for leaves of absence without pay or for any period of time you do not receive salary. There may be exceptions if you are on sick leave at half-pay or receiving Workers’ Compensation benefits.

Article 19 Service Credit

If you are an eligible Tier 1 or 2 member whose membership date is prior to July 27, 1976, you will receive an additional month of service credit for each year of credited service you have at retirement, up to a maximum of 24 months. This additional service credit will be included in your benefit calculation at retirement.

To be eligible for an increased retirement benefit under Article 19, you must have been in active service continuously from April 1, 1999, through and including October 1, 2000. Active service means:

Those not eligible for the additional service credit provided by Article 19 include:

Unused, Unpaid Sick Leave

Unused, unpaid sick leave may be added to your credited service and used in your benefit calculation if you are a New York State employee or if your employer has chosen to offer the optional sick leave benefit provided by Section 41(j) (RSSL). To be eligible for this benefit, you must retire directly from public service or within a year of separating from service.

The additional credit is determined by dividing your total unused, unpaid sick leave days, which cannot exceed 165 days (.63 of a year) for most members or 100 days (.38 of a year) for most Tier 6 members, by 260. Check your Member Annual Statement to see if your employer offers this benefit.

Example

For a member whose full-time day is 8 hours

# hours unused sick leave
full-time hours per day
= # days additional service credit
1320
8
= 165 days additional service credit
# days additional service credit
260
= additional service credit
165
260
= .63 of a year additional service credit

 

Credit for your unused sick leave at retirement cannot be used to:

Credit for Your Past Service

Legislative changes in 2000 allow for the crediting of most previous public employment. These different types of service are:

If you were discharged from the United States Army, Navy, Air Force, Marine Corps or Coast Guard but do not have your copy, request one by contacting the National Archives and Records Administration, the official repository for these records. The website for requesting this information is www.archives.gov/veterans/military-service-records. Or write them at:

National Personnel Records Center

Military Personnel Records

1 Archives Drive

St. Louis, MO 63138

If your military records were destroyed in the 1973 fire at the National Personnel Records Center (NPRC), the Center will issue you a Certification of Military Service, which we will also accept. Veterans who have been separated from active service, but have Reserve status, should contact the Reserve Component of the appropriate branch of service.

Veterans currently in the National Guard should contact the Adjutant General’s Office of New York State. Recently discharged National Guard members, in most cases, will not be able to get their military records from NPRC until six months after discharge because of required processing.

FAQs

How do I know how much service I’ve been credited with?

Most members in Tiers 2 through 6 can find their total service credit in their latest Member Annual Statement. Because Tier 1 members have service credit prior to the automation of our records, their Member Annual Statements generally do not include this information.

You can request an estimate of your retirement benefits if you are within 18 months of retirement eligibility. The estimate will include your total service credit, projected to your anticipated retirement date (see Understanding Your Benefit for more information).

How do I claim credit for my past service?

Requests for previous service credit should be mailed to:

New York State and Local Retirement System

Member & Employer Services Bureau

Arrears Unit

110 State Street

Albany, NY 12244-0001.

We will send you a letter indicating the amount of previous service credit you are eligible to receive and the cost, if applicable.

NOTE: Even if you included information about past service on your membership application, you must still initiate the request to receive credit for it. Requesting credit well before you expect to retire allows us sufficient time to get salary and service records from your employer(s) and provides you with ample time to pay for it, if required. Also, Tier 2, 3, 4, 5 and 6 members must have two years of service credit in their current membership before they can receive credit for previous service. If you are requesting credit for your military service, you may need at least five years of service credit in your current membership, depending on the eligibility requirements of the particular law governing the crediting of this service. If you are requesting previous service to establish eligibility for a vested retirement benefit, you must request credit while you are on the payroll of a participating employer. If you receive a statement of the cost after you leave the payroll, you must make payment within 30 days of notification.

Must I begin payment for my past service immediately?

Except for mandatory past service payments, you may choose to purchase service at a later date. However, the cost will increase due to interest compounding annually at the rate of 5 percent to the date of payment.

Does crediting of past service change my tier status?

If you have a previously withdrawn membership, your former date of membership may be reinstated and possibly your tier status could change. For other previous service, the additional credit may increase your retirement benefit, but does not change your tier status or date of membership.

What are past service payments?

Past service payments are those associated with service crediting. There are two kinds of past service payments:

NOTE: For Tier 1 or 2 members covered by the New Career Plan (Section 75-h or 75-i) with 37½ or more years of service, purchasing credit for your previous service may not increase your retirement benefit. You may want to visit our website at www.osc.state.ny.us/retire/members/projecting-your-pension.php to use our benefit projection calculator. Step-by-step instructions are available to guide you through the process. Try calculating your benefit with and without the credit for your previous service to determine if making the purchase is right for you.

How can I pay for my past service?

If there is a cost to secure credit for your past service, there are three ways you can make payment:

  1. A single lump sum to cover the entire cost of the past service;
  2. Through payroll deductions (you may supplement payroll deductions with additional payments if you choose to pay off the balance owed sooner); or
  3. Through a trustee-to-trustee transfer from one of the allowable plans below (for optional service only).
Individual Retirement Account - 408(a) -or- Individual Retirement Account - 408(b)
403(a) Annuity Plan
403(b) Tax-Sheltered Annuity
Qualified Defined Benefit or Contribution Plan 401(a) or 401(k)
Governmental Deferred Compensation Plan - 457

Transfers from Roth IRAs, inherited IRAs or inherited Roth IRAs are not permitted.

NOTE: If you decide on payroll deductions, the time over which you make payments cannot exceed the total amount of service credit being purchased. For example, if you are purchasing three years of service credit, payroll deductions can be made for up to three years, or until your date of retirement, whichever comes first. At the time of retirement, the total cost must be paid in full or you will receive credit only for that part of your previous service that was paid for.

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Final Average Salary

Your final average salary (FAS) is an important factor in the calculation of your retirement benefit. For all ERS members in Tiers 1 through 5, FAS means the average of the three highest consecutive years of earnings in covered public employment. For Tier 6 members, it is the average of the five highest consecutive years of earnings. This is usually the last years of employment immediately before retirement. However, if there is a consecutive three or five-year period* of usable earnings earlier in a member’s career that will result in a higher FAS, we will use that higher FAS to calculate the benefit. We do the FAS comparison automatically at the time of your retirement. The earnings used in the FAS calculation may be subject to certain limitations based on the date you joined the Retirement System.

* Not always a calendar or a fiscal year

Three-year final average salary

Tiers 1, 2, 3, 4 and 5

A three-year FAS is the average of the wages earned during any three consecutive years of service when earnings were highest. This is usually the last three years of employment.

The FAS calculation can include, but is not limited to, the following types of payments earned during the FAS period:

In most cases, the following payments cannot be included in the FAS:

* Tier 5 members are limited in their allowable overtime earnings.

A sample FAS calculation for a member with full-time service and no breaks in employment during the FAS period is provided below:

Example
Date of Retirement 3/9/2016
Earnings Period Usable Earnings
Year 1: 3/9/2015 – 3/8/2016 $  46,723
Year 2: 3/9/2014 – 3/8/2015 $  44,912
Year 3: 3/9/2013 – 3/8/2014 $  42,336
  $133,971 3 = $44,657 FAS

Limitations

Tier 1

Tier 1 members who joined prior to June 17, 1971, are not subject to a limitation.

If your date of membership is June 17, 1971 or later, a limitation may apply to the calculation of your FAS. The earnings in any one year used in your FAS calculation cannot exceed the earnings of the previous 12 months by more than 20 percent. Earnings in excess of 20 percent will be excluded from the calculation.

A 20 percent increase in salary from one year to another is unusual. Therefore, most Tier 1 members are not affected by this limitation.

Example
Tier 1 Member who joined on or after 6/17/71
Actual Earnings Limit Earnings Allowed
Year 1: $47,000 $38,000 × 1.2 = 45,600 $  45,600
Year 2: $38,000 $37,000 × 1.2 = 44,400 $  38,000
Year 3: $37,000 $33,000 × 1.2 = 39,600 $  37,000
Year 4: $33,000    
    $120,600 ÷ 3 = $40,200 FAS
The earnings in Year 1 exceed the earnings in the previous year by more than 20 percent, so the total earnings cannot be used.

Tier 2

The earnings in any one year of your FAS calculation cannot exceed the average earnings of the previous two years by more than 20 percent. Earnings in excess of the 20 percent limitation will be excluded from the calculation. Few Tier 2 members are affected by this limitation.

Example
Tier 2 Member
Actual Earnings Limit Earnings Allowed
Year 1: $47,000 (38,000 + 37,000)
2
× 1.2 = 45,000 $  45,000
Year 2: $38,000 (37,000 + 33,000)
2
× 1.2 = 42,000 $  38,000
Year 3: $37,000 (33,000 + 32,000)
2
× 1.2 = 39,000 $  37,000
Year 4: $33,000    
Year 5: $32,000    
    $120,000 3 = $40,000 FAS
The earnings in Year 1 exceed the average of the earnings in the previous two years by more than 20 percent, so the total earnings cannot be used.

Tiers 3, 4 and 5

The earnings in any one year used in the FAS calculation cannot exceed the average earnings of the previous two years by more than 10 percent. Earnings in excess of the 10 percent limitation will be excluded from the calculation. As a result, Tier 3, 4 and 5 members are more likely to be limited in the amount of salary used in their FAS calculation.*

A lump sum payment for up to 30 days of unused accumulated vacation may be included in the FAS calculation if the total compensation in that 12-month period does not exceed the 10 percent limitation. **

*For Tier 5 members, annual overtime pay in excess of $15,000 in calendar year 2010 cannot be used in the FAS calculation. The overtime pay limitation increases 3 percent annually.

**Lump Sum Vacation payment will be added into last year’s earnings.

Example
Tier 3, 4 or 5 Member
Actual Earnings Limit Earnings Allowed
Year 1: $47,000 (38,000 + 37,000)
2
× 1.1 = 41,250 $  41,250
Year 2: $38,000 (37,000 + 33,000)
2
× 1.1 = 38,500 $  38,000
Year 3: $37,000 (33,000 + 32,000)
2
× 1.1 = 35,750 $  35,750
Year 4: $33,000    
Year 5: $32,000    
    $115,000 ÷ 3 = $38,334 FAS
The earnings in Years 1 and 3 exceed the average of the earnings in the previous two years by more than 10 percent, so the allowed earnings can be used and, therefore, the FAS is limited.

Five-year final average salary

Tier 6

A five-year FAS is the average of the wages earned during any five consecutive years of service when earnings were the highest. This is usually the last five years of employment.

The five-year FAS calculation can include, but is not limited to, the following types of payments earned during the FAS period:

In most cases, the following payments cannot be included in the FAS:

* Tier 6 members are limited in their allowable overtime earnings.

Limitations

The earnings in any one year used in the FAS calculation cannot exceed the average earnings of the previous four years by more than 10 percent. Earnings in excess of the 10 percent limitation will be excluded from the calculation. As a result, Tier 6 members are likely to be limited in the amount of salary used in their FAS calculation.

Example
Tier 6 Member
Actual Earnings Limit Earnings Allowed
Year 1: $47,000 (38,000 + 37,000 + 33,000 + 32,000)
4
× 1.1 = 38,500 $  38,500
Year 2: $38,000 (37,000 + 33,000 + 32,000 + 31,000)
4
× 1.1 = 36,575 $  36,575
Year 3: $37,000 (33,000 + 32,000 + 31,000 + 30,000)
4
× 1.1 = 34,650 $  34,650
Year 4: $33,000 (32,000 + 31,000 + 30,000 + 29,000)
4
× 1.1 = 33,550 $  33,000
Year 5: $32,000 (31,000 + 30,000 + 29,000 + 28,000)
4
× 1.1 = 32,450 $  32,000
Year 6: $31,000    
Year 7: $30,000    
Year 8: $29,000    
Year 9: $28,000    
    $174,725 ÷ 5 = $34,945 FAS
The earnings in Years 1, 2 and 3 exceed the average of the earnings in the previous four years by more than 10 percent, so the allowed earnings are used and, therefore, the FAS is limited.

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Retirement Plans

Your retirement plan describes the formula used to calculate your retirement benefit. All calculation examples shown in this section represent the Single Life Allowance payment option, which provides the maximum amount payable for your lifetime.

Service Retirement Eligibility

To be eligible to collect a retirement benefit, a member must meet one of the following criteria:

Benefit Reductions

Your age at retirement could directly impact the calculation of your retirement benefit. Members who meet one of the following criteria can retire with no age-based reduction to their benefits:

Retirement benefits for members who retire under a regular plan and do not meet one of the criteria listed above will be permanently reduced based on their age on their date of retirement.

Benefit reduction percentages for each tier of membership are provided below. Please note that these reductions are prorated by the month. For example, the pension benefit of a Tier 4 member with less than 30 years of service who retires at the age of 55 years and 6 months old would be permanently reduced by 25.5 percent.

Benefit Reduction Charts

Tiers 2, 3 & 4

Age at Retirement   Reduction
Age 62 = 0%
Age 61 = 6%
Age 60 = 12%
Age 59 = 15%
Age 58 = 18%
Age 57 = 21%
Age 56 = 24%
Age 55 = 27%

Tier 5

Age at Retirement   Reduction
Age 62 = 0%
Age 61 = 6.66%
Age 60 = 13.33%
Age 59 = 18.33%
Age 58 = 23.33%
Age 57 = 28.33%
Age 56 = 33.33%
Age 55 = 38.33%

Tier 6

Age at Retirement   Reduction
Age 63 = 0%
Age 62 = 6.5%
Age 61 = 13.0%
Age 60 = 19.5%
Age 59 = 26.0%
Age 58 = 32.5%
Age 57 = 39.0%
Age 56 = 45.5%
Age 55 = 52.0%

Tiers 1 & 2

Section 75-h (State) and Section 75-i (Local)

Service Retirement Benefit

Examples

Tier 1 Age 55
28 years of service
FAS = $43,500
28 × $43,500
50
= $
$
24,360
2,030
per year
per month


Tier 2 Age 55
28 years of service
FAS = $43,500
28 × $43,500
50
= $ 24,360  
      - 6,577 *
    $
$
17,783
1,482
per year
per month
*27 percent benefit reduction at age 55.


Tier 2 Age 55
30 years of service
FAS = $43,500
30 × $43,500
50
= $
$
26,100
2,175
per year
per month

Tiers 1 & 2

Section 75-f (State) and Section 75-g (Local)

Service Retirement Benefit

Examples

Tier 1 Age 55
29 years of service
FAS = $43,500
25 × $43,500
50
= $
21,750
 
4 × $43,500
60
=   + 2,900  
    $
$
24,650
2,054
per year
per month


Tier 2 Age 55
29 years of service
FAS = $43,500
25 × $43,500
50
= $
21,750
 
4 × $43,500
60
=   + 2,900  
    $ 24,650  
      - 6,655 *
    $
$
17,995
1,499
per year
per month
*27 percent benefit reduction at age 55.


Tier 2 Age 55
30 years of service
FAS = $43,500
25 × $43,500
50
= $
21,750
per year
5 × $43,500
60
=   + 3,625  
    $
$
25,375
2,114
per year
per month

Tiers 1 & 2

Section 75-d (State) and Section 75-e (Local)

Service Retirement Benefit

At retirement, you will receive a pension equal to:

Examples
Tier 1 Age 55 or Tier 2 Age 62
17 years of service
FAS = $43,500
17 × $43,500
60
= $
$
12,325
1,027
per year
per month

Tier 2 Age 55
17 years of service
FAS = $43,500
17 × $43,500
60
= $ 12,325  
      - 3,327 *
    $
$
8,998
750
per year
per month
*27 percent benefit reduction at age 55.

Tiers 3 & 4

Article 15

Service Retirement Benefit

Examples

Age 62
17 years of service
FAS = $43,500
17 × $43,500
60
= $
$
12,325
1,027
per year
per month

Age 55
17 years of service
FAS = $43,500
17 × $43,500
60
= $ 12,325  
      - 3,327 *
    $
$
8,998
750
per year
per month
*27 percent benefit reduction at age 55.


Age 62
22 years of service
FAS = $43,500
22 × $43,500
50
= $
$
19,140
1,595
per year
per month


Age 55
22 years of service
FAS = $43,500
22 × $43,500
50
= $ 19,140  
      - 5,167 *
    $
$
13,973
1,164
per year
per month
*27 percent benefit reduction at age 55.


Age 55 Over 30 Years of Service
32 years of service
FAS = $43,500
30 × $43,500
50
= $ 26,100  
(1.5 × 2**) × 43,500 =   + 1,305  
    $
$
27,405
2,283
per year
per month
In this example, the member has more than 30 years of service. Therefore there is no benefit reduction.

**Number of years over 30.

Tier 5

Article 15

Service Retirement Benefit

Examples

Age 62
17 years of service
FAS = $43,500
17 × $43,500
60
= $
$
12,325
1,027
per year
per month


Age 55
17 years of service
FAS = $43,500
17 × $43,500
60
= $ 12,325  
      - 4,724 *
    $
$
7,601
633
per year
per month
*38.33 percent benefit reduction at age 55.


Age 62
22 years of service
FAS = $43,500
22 × $43,500
50
= $
$
19,140
1,595
per year
per month


Age 55
22 years of service
FAS = $43,500
22 × $43,500
50
= $ 19,140  
      - 7,336 *
    $
$
11,803
983
per year
per month
*38.33 percent benefit reduction at age 55.


Age 55
32 years of service
FAS = $43,500
30 × $43,500
50
= $ 26,100  
(.015 × 2**) × 43,500 =   + 1,305  
    $ 27,405
per year
      - 10,504 *
    $
$
16,901
1,408
per year
per month
*38.33 percent benefit reduction at age 55.
**Number of years over 30.

Tier 6

Article 15

Service Retirement Benefit

Examples

Age 63
17 years of service
FAS = $43,500
17 × $43,500
60
= $
$
12,325
1,027
per year
per month


Age 63
22 years of service
FAS = $43,500
$43,500 × .35 (20 years) = $ 15,225  
2 × $43,500
50
=   + 1,740  
    $
$
16,965
1,413
per year
per month


Age 55
17 years of service
FAS = $43,500
17 × $43,500
60
= $ 12,325  
      - 6,409 *
    $
$
5,916
439
per year
per month


Age 55
22 years of service
FAS = $43,500
$43,500 × .35 (20 years) = $ 15,225  
2 × $43,500
50
=   + 1,740  
    $
16,965
 
      - 8,821 *
    $
$
7,874
656
per year
per month
*52 percent benefit reduction at age 55.

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Preparing for Your Retirement

Retirement is one of the biggest life changes that most people will ever experience. One of the keys to minimizing the uncertainty that can occur during the retirement process is to plan ahead. Properly preparing for your retirement will provide you with the tools and information you’ll need to make educated decisions about your benefits. It will also make the process easier to understand and less stressful when it’s time to retire.

Countdown to Retirement

Countdown to Retirement Timeline

For the most current information, check our website at www.osc.state.ny.us/retire.

Understanding Your Benefit

It’s never too early to start planning for your retirement. One of the most important things you should do to prepare is review how much your pension benefit could be. We offer a variety of ways for you to obtain a projection of your future retirement benefits.

When planning for your retirement, you should use more than one — and possibly all — of the methods listed below, depending on where you are in your career.

Review your Member Annual Statement

For most members, a projection of your future pension benefit is provided each year on your Member Annual Statement. Each statement may include up to three benefit projections based on different possible dates of retirement. While, in most cases, these benefit calculations are conservative, they are an effective planning tool that you can use throughout your entire career.

Use our Benefit Projection Calculator

Most members, regardless of age, can use the benefit calculator on our website to project what their approximate pension could be based on retirement dates they choose. The calculator also projects benefit amounts under the various payment options available to you at retirement. Visit our website at www.osc.state.ny.us/retire/members/projecting-your-pension.php to use the calculator. This service is currently not available to members enrolled in certain plans and to Tier 5 or 6 members.

NOTE: These benefit projections are based entirely on salary and service credit information you enter — not Retirement System records. So it’s important that you contact us to confirm the information we have in our records for you is accurate and complete before you make any final decisions regarding your retirement.

Request a Benefit Projection from our Call Center

Most Tier 2, 3 and 4 members, regardless of age, with five or more years of service credit are eligible to request a benefit projection by contacting our Call Center. These benefit projections are based on your salary and service reported by your employer(s) to date. Actively employed members age 50 or older can also request a benefit calculation that projects additional service credit based on a date of retirement up to five years into the future. In most cases, these projections will be mailed to your home address the next business day. This benefit projection method is a great tool for vested members who are considering leaving the payroll before they are old enough to collect their retirement benefits, and for those members who will be eligible to retire within five years.

Speak with an Information Representative

We offer you the opportunity to speak with an Information Representative to obtain a projection of your retirement benefits. This consultation service is available by phone or in-person at locations throughout New York State. To request a benefit projection or to schedule an appointment to speak with an Information Representative, contact our Call Center toll free at 1-866-805-0990, or 518-474-7736 in the Albany, New York area.

Request a General Estimate

If you are within 18 months of your first eligible date of retirement, you can request we calculate a General Estimate of your retirement benefits. A General Estimate provides information about your retirement benefits and the approximate amount you can expect to receive annually and monthly under each of the standard retirement options. You can receive this information by submitting a Request for Estimate form (RS6030) or by writing to our Benefit Calculations and Disbursement Services Bureau. Your request must include an estimated date of retirement, the name and birth date of your intended pension beneficiary (if applicable) and a list of your entire public employment history, including military service.

NOTE: The date of retirement on your request cannot be more than 18 months in the future. A Request for Estimate form (RS6030) and Sample General Estimates are provided. It’s important to note that a General Estimate can take a number of months to complete, so we recommend you submit your request nine to 18 months prior to your estimated date of retirement.

Be sure to review your General Estimate carefully and report any inconsistencies to us as soon as possible. If you decide not to retire, you may request a new General Estimate whenever your circumstances change.

Locate Proof of Your Birth Date

We must have proof of your birth date before any benefits can be paid. In most cases, a photocopy of the document is acceptable — but if you send us the original, we will return it to you.

If you do not have a birth certificate, we will also accept one of the following documents:

  1. Baptismal Certificate;
  2. Certificate of Release or Discharge from Active Duty (DD-214);
  3. Passport;
  4. Naturalization Papers; or
  5. Enhanced Driver’s License.

If you do not have one of these documents readily available, now is the time to hunt them down or arrange to get a replacement. This is especially important if you have to write to an out-of-state registry or a foreign country for an acceptable document. If you intend to choose a retirement option that provides a lifetime benefit to a beneficiary (one of the Joint or Pop-Up options), we also require proof of your beneficiary’s birth date.

The National Center for Health Statistics’ website contains information for each state on where to write for vital records, such as your birth certificate, and the cost. Visit their site at www.cdc.gov/nchs/w2w.htm.

If you are unable to provide one of these documents, please contact us for information about alternate types of proof that are acceptable.

You may forward proof of your and/or your beneficiary’s birth dates to us anytime before your retirement date. Be sure to include your name, address and registration number with any documents you want included in your records.

Commit to Paying Off Your Retirement System Loan(s)

Many members take advantage of our loan program. However, it is very much to your advantage, as you near retirement, to commit to paying off (or at least substantially reducing) your Retirement System loan balances. A portion of any remaining balance at retirement may be reportable as ordinary income and subject to federal income tax.

Additionally, if you are a Tier 1 or 2 member with outstanding loans, your pension will not be affected, but the balance remaining on your loans will permanently reduce your annuity. Because your loans are paid off by your contributions at retirement, large outstanding loans could substantially reduce your contribution balance.

If you are a Tier 3, 4, 5 or 6 member with outstanding loan balances at retirement, you will have a permanent reduction to your pension benefit. Your pension benefit will not increase, even though the loan balances could have been paid off, over time, by the amount of the benefit reduction.

You may pay off your loan sooner by increasing the amount of your loan payment deducted from your salary. Send us a letter indicating the amount you would like your payments increased to — we will notify your payroll department. Or, you may send additional payments directly to us — be sure to indicate the payment is to be applied to your loan. These additional payments must be a minimum of $100 and should not be submitted more than once a month. Send your letter and/or payments, along with your name, address and registration number to:

New York State and Local Retirement System

Member & Employer Services Bureau

Loan Unit

110 State Street

Albany, NY 12244-0001

Review Your Domestic Relations Order

Retirement benefits are considered marital property and can be divided between you and your ex-spouse when you divorce.

Any division of your benefits must be stated in the form of a Domestic Relations Order (DRO) — a court order that gives us specific instructions on how your benefits should be divided. We will also need a certified copy of your divorce decree. We highly recommend your attorney send us a proposed DRO for review prior to its entry in court. Orders that are vague, contain inconsistent or contradictory provisions, or are contradictory to plan requirements or New York State law, will be rejected. A DRO does not allow for a distribution of your pension until you actually retire, die or terminate membership.

The Retirement System offers an easy to complete online DRO template. The template is not required, but all submissions using the template will be given priority review. We will also honor a properly drawn DRO issued by a New York State Court.

We will honor an out-of-state order if you submit to us a notarized statement:

For more information about our fillable DRO template and how divorce may affect retirement benefits, please visit our website: www.osc.state.ny.us/retire/members/divorce. Any questions by the parties’ or their legal representatives should be submitted in writing to dro@osc.state.ny.us or by regular or certified mail. Inquires may also be faxed to 518-474-7794.

Review Other Income Sources

A sound financial plan is crucial for a comfortable retirement. At least eight months before you plan to retire, review other sources of retirement income such as savings, investments, a pension from private employment, proceeds from a deferred compensation plan or perhaps income from post-retirement employment.

Experts tell us you will need at least 80 percent of your pre-retirement income to maintain your current standard of living. The average retiree receives about 35-40 percent of his or her post-retirement income from Social Security. If your earnings have been below average, Social Security may replace more of your income, while an above average income means a lower percentage will be replaced.

The Social Security Administration has suspended mailing annual statements, however, they offer online statements. Also, you may be able to estimate your benefit using their online Retirement Estimator. For more information, visit their website at www.ssa.gov. This site also contains information on Medicare, disability benefits and planning for your retirement and will help you locate your nearest Social Security Administration office.

The date you choose to start receiving your Social Security benefits could mean more money for you. If you want to begin receiving your Social Security payments within the next four to 12 months, be sure to use the Benefit Eligibility Screening Tool (BEST), also available on their website.

Prepare a Retirement Budget

Once you determine what your expected income will be, it’s time to prepare a budget. Having a budget allows you to decide how you want to spend your money and helps you keep your long-term goals in focus.

You will need to determine how you spend your money, so it is a good idea to keep track of your expenses over a month or two. Don’t forget to include expenses that occur periodically, such as car insurance or property and school taxes. You will also want to include money you set aside for an emergency fund and/or save for future goals. We have included a set of work sheets to help you in your budget preparation.

Review Your Health Insurance Coverage

We do not administer health insurance programs for retirees. Before you retire, check with your employer’s health benefits administrator to determine your eligibility for post-retirement coverage for yourself and your family. The administrator will be able to provide you with information concerning the type of coverage available, the total cost, and how much you must pay.

If you are not eligible for coverage after retirement or you need supplemental coverage, you should investigate private health insurance well in advance of retiring. For New York State employees and retirees, the New York State Department of Civil Service administers the New York State Health Insurance Program (NYSHIP). Your health benefits administrator should be able to answer your questions about your coverage as a retiree. You can also visit the Department of Civil Service’s website at www.cs.ny.gov or call them at 1-800-833-4344 or 518-457-5754 to learn more.

Sample General Estimates:

Sample General Estimate: Tier 1 & 2

Sample General Estimate: Tier 3 & 4 Article 15

Work Sheets:

Monthly Expenses Worksheet

Monthly Income Worksheet

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Applying for Your Service Retirement Benefit

Applying for your service retirement benefit is relatively easy, especially if you have taken the proper steps to prepare for your retirement in advance. However, it is important that you know exactly what your responsibilities are at this point. It will also help if you understand how we will be handling our part of the process so that you can plan properly.

Remember — we are here to help if you need us. If you have any concerns or questions about applying for your service retirement benefit, please contact our Call Center to speak with a customer service representative.

Filing Your Retirement Application

You must file a completed Application for Service Retirement form (RS6037) with us to receive your retirement benefit. This form is available through your employer, our website, Call Center or consultation sites.

Retirement applications, and many other documents, are required by law to be filed with the Office of the State Comptroller within specific time limits. Your retirement application must be on file with us at least 15 days, but not more than 90 days, before your retirement date. The 15-day filing requirement is waived if you are over age 70 at retirement.

For your application to be considered as filed with the Comptroller, it must be received by either our Albany office or another office of the State Comptroller. Giving your employer the form does not mean that you have “filed with the Comptroller.”

As an alternative to visiting our offices to file this time-sensitive document personally, you can fulfill the filing requirement by mailing your application to us. We will consider it filed when it is delivered to us by the Post Office. If you are concerned about meeting a filing deadline, you can mail your application via “certified mail — return receipt requested.” When we receive your application, it will be considered as having been filed on the same date it was mailed.

We will send you a confirmation letter approximately two to three weeks after we receive your retirement application. We will also notify your employer you have filed for retirement. If you received a General Estimate from us within the past 18 months, our letter will include an Option Election form for you to choose how you want your retirement benefit paid based on the information supplied in that estimate. Also included will be a W-4P form, enabling you to have federal taxes withheld each month, and a Direct Deposit Enrollment Application (RS6370), so you can have your retirement benefit directly deposited into the bank account of your choice.

We will prepare an estimate of your retirement benefits only if you have not received a General Estimate from us within the last 18 months or if your retirement plan calculation recently changed. Included with this estimate will be an Option Election form for you to choose how you want your retirement benefit paid.

Determine Your Federal Withholding

A W-4P form (Withholding Certificate for Pension or Annuity Payments) enables you to have federal taxes withheld from your monthly benefit. If you are not sure how much should be withheld, visit our website and use our tax calculator. From the Retirees section of our website, click on “Tax Information” under Quick Links.

By entering your anticipated monthly benefit, whether you are single or married, and the number of dependents you claim, the calculator will show you how much federal tax withholding will be deducted from your retirement benefit. Of course, if you have other sources of taxable income besides your pension, you may want to have more withheld — check with your tax advisor to determine the appropriate amount.

If you do not submit a completed W-4P form to us, we can still process your retirement application. But, when we pay your monthly benefit, the amount of federal tax withheld will be based on the status “married with three dependents.” This may or may not be adequate for your needs. You can, however, change your federal withholding tax status anytime. W-4P forms are available from our website, Call Center and at all our consultation sites.

Your pension is not subject to New York State income tax. If you are planning to move to another state after you retire, check with that state’s tax department to see if your retirement benefit is taxable there. You can also visit the Retired Public Employees Association’s website at www.rpea.org. There you will find a complete list of states that tax and do not tax your New York State retirement benefit.

Receiving Your Benefit

At retirement, you must decide how you want your retirement benefit paid. You can choose from several options, all of which will provide you with a monthly benefit for life. For example, you may elect the Single Life Allowance, which provides the maximum amount payable during your lifetime, with nothing payable to a beneficiary upon your death. Or, you may elect to receive a smaller monthly benefit to provide for a possible payment to a designated beneficiary after your death.

Filing Your Option Election

You must file your Option Election form (unless notified otherwise, as in the case of disability retirement) before the first day of the month following your retirement date. You have up to 30 days after your pension benefit becomes payable to change your selection. We do not expect you to select your payment option if you have not received a General Estimate of the amounts payable under each available option within the past 18 months. If you have not received a General Estimate in this timeframe, we will mail one to you after we receive your application. At that time, we will notify you when you must submit your option selection.

If your election is not timely, by law we must process your retirement as if you had selected:

Following are the available options; however, some are only applicable to specific tiers.

Single Life Allowance (Option 0)

This is the basic retirement benefit. It provides the maximum benefit payment to you each month for the rest of your life. Under this selection, all payments cease upon your death. When you die (even if it is only one year, or sooner, after retiring), nothing will be paid to any beneficiary.

Cash Refund — Contributions

(Available only to members with annuity savings contributions on deposit)

This option will provide you with a reduced monthly benefit for your lifetime. At your death, the unpaid balance of your accumulated annuity savings contributions will be paid to your beneficiary or your estate. If all your accumulated annuity savings contributions have been expended, all payments will cease upon your death.

Cash Refund — Initial Value

(Available only to Tier 1 members)

This option will provide you with a reduced monthly benefit for your lifetime. It guarantees if you die before receiving retirement benefit payments that equal the initial value of your benefit, the balance of the initial value will be paid to your beneficiary or estate in a single payment. “Initial value” is an actuarial term for the value of your retirement benefit at the time of retirement.

If you live long enough, you will receive your initial value amount and more in your monthly benefit. However, if you die after the full initial value amount has been paid out to you, no benefit is payable to your beneficiary.

Five Year Certain

This option will provide you with a reduced monthly benefit for your lifetime, with the additional guarantee that if you live for less than five years after retirement, payments in the same amount you were receiving (without COLA) will be made to your beneficiary for the balance of the five-year period.

Ten Year Certain

This option will provide you with a reduced monthly benefit for your lifetime, with the additional guarantee that if you live for less than ten years after retirement, payments in the same amount you were receiving (without COLA) will be made to your beneficiary for the balance of the ten-year period.

Joint Allowance — Full*

This option will provide you with a reduced monthly benefit for your lifetime and is based on your birth date and that of your beneficiary. After your death, your beneficiary will receive the same monthly amount you were receiving (without COLA) for life. If your beneficiary dies before you, all payments will cease upon your death.

Joint Allowance — Half*

(Available to Tier 1 and 2 members)

This option will provide you with a reduced monthly benefit for your lifetime and is based on your birth date and that of your beneficiary. After your death, your beneficiary will receive one-half of the monthly benefit you were receiving (without COLA) for life. If your beneficiary dies before you, all payments will cease upon your death.

Joint Allowance — Partial*

(Available to Tier 3, 4, 5 and 6 members)

This option will provide you with a reduced monthly benefit for your lifetime, and is based on your birth date and that of your beneficiary. After your death, your beneficiary will receive a specific percentage of your benefit (without COLA) which you select (75, 50 or 25 percent) for life. If your beneficiary dies before you, all payments will cease upon your death.

Pop-Up/Joint Allowance — Full*

This option will provide you with a reduced monthly benefit for your lifetime. If you die before your beneficiary, we will continue paying the same monthly amount you were receiving (without COLA) to your beneficiary for life. If your beneficiary dies first, your benefit will be increased to the amount you would have received if you had selected the Single Life Allowance at retirement, and all payments will cease upon your death.

Pop-Up/Joint Allowance — Half*

This option will provide you with a reduced monthly benefit for your lifetime. If you die before your beneficiary, we will pay one-half of the monthly amount you were receiving (without COLA) to your beneficiary for life. If your beneficiary dies first, your benefit will be increased to the amount you would have received if you had selected the Single Life Allowance at retirement, and all payments will cease upon your death.

Alternative Option

If the options described here do not meet your needs, we will consider written requests for other payment methods. These requests must be outlined in detail by you and then approved by us for legal and actuarial soundness.

* If you elect this option, you must submit proof of your beneficiary’s birth date. You can designate only one beneficiary and you cannot change your designation after your retirement. If your beneficiary is your spouse at the time of your death, he or she will be eligible for 50 percent of your COLA. For more information on COLA, see the section on COLA.

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After You Retire

The retirement process doesn’t stop once you reach your date of retirement. There is still some work to be done, and there are a number of things you should know in advance to ensure that you are properly prepared for what happens next.

Advance Payments

After you retire, we will begin the process of finalizing your benefit calculations. Since this process can take some time, as a new retiree, you may be eligible to receive advance payments until we have completed your benefit calculations.

Advance payments are based on your most recent General Estimate and are approximately 90 to 95 percent of the estimated monthly amount of the retirement option you have elected.

Your first advance payment will be mailed to you approximately five to eight weeks after your date of retirement. The table below shows the schedule of mailing dates for a new retiree’s first advance payment.

Date of Retirement Date first Advance Payment is mailed
January 1–31 1st business day of March
February 1–28 (29) 1st business day of April
March 1–31 1st business day of May
April 1–30 1st business day of June
May 1–31 1st business day of July
June 1–30 1st business day of August
July 1–31 1st business day of September
August 1–31 1st business day of October
September 1–30 1st business day of November
October 1–31 1st business day of December
November 1–30 1st business day of January
December 1–31 1st business day of February

Advance payments are subject to federal income tax withholding. You can choose the amount to be withheld by submitting a W-4P Withholding Certificate. If you do not submit a W-4P form, withholding will be based on a rate of “married with three exemptions.”

Advance payments are always paid in the form of a check and mailed to the home address you have on file with the Retirement System. These payments cannot be paid via our Direct Deposit Program. If you plan to relocate during the period you are receiving advance payments, please contact us as soon as possible and provide us with your new address and the date it becomes effective.

The maximum amount that can be paid in one advance payment is $9,999.

Final Calculation Letter and Retroactive Payments

When we finalize your benefit calculation, we will mail you a letter explaining how we determined your retirement benefit. This Final Calculation Letter will provide you with the amount of the benefit you will be receiving each month for the remainder of your life. It will also provide you with the total amount of the pension you have earned up to that point and the total amount already paid to you in the form of advance payments.

If the total amount of the pension you have earned up to that point exceeds the total amountof your advance payments, we will issue you a retroactive payment to make up the difference (less federal withholding, if applicable). If you have previously submitted a Direct Deposit Enrollment Application, your retroactive payment will be deposited directly into your bank account. If you have not applied for direct deposit, we will mail you a check for your retroactive payment.

Direct Deposit Program

This program becomes available to you once we receive your Direct Deposit Enrollment Application and your final retirement benefit calculations have been completed. With direct deposit, payments are deposited into your bank account on the last business day of each month.

To enroll in our Direct Deposit Program, you must complete an Electronic Funds Transfer Direct Deposit Enrollment Application (RS6370) (mailed with your General Estimate or Option Election Form) and return it to us. It is also available on our website and from our Call Center. We do not accept direct deposit forms issued by your banking institution.

Cost-of-Living Adjustments

Once you meet the eligibility requirements, including age and number of years retired, your retirement benefit will permanently increase each year. This adjustment, subject to pension caps and limitations, is 50 percent of the previous year’s annual rate of inflation, but never less than 1 percent or more than 3 percent of your benefit. The adjustment percentage is applied only to the first $18,000 of your Single Life Allowance, even if you selected a different option at retirement.

You will begin receiving cost-of-living adjustments (COLAs) when you are:

When you die, if you selected an option that pays a lifetime benefit to your beneficiary, and the beneficiary is your spouse, he or she will be eligible to receive half of the COLA amount you would have been entitled to receive.

Thinking of Returning to Work?

Your earnings may be limited if you return to work after retiring. The Retirement and Social Security Law regulates post-retirement employment for all members of the Retirement System. The rules and restrictions differ depending on:

Disregarding, or otherwise not following the rules can result in the loss, suspension, or reduction of your retirement benefit. For more information on post-retirement employment, please visit our website, contact us, or read our booklet, What If I Work After Retirement (VO1648).

Organize Your Legal and Financial Papers

If you have not already done so, now is the perfect time to organize all your important papers and legal documents — it is surprising how many you can accumulate over a lifetime. Having your important papers organized will help family members keep your financial and legal matters in order during an extended vacation or severe illness or, in the event of your death, settle your estate. We have included the worksheet, Where My Assets Are (VO1848), to help you with this task.

It is important that you store this information in a safe but accessible location — preferably not in a safe deposit box because any items kept there will not become available until a probate judge orders the box to be opened under court supervision. Be sure to keep it updated and let the executor of your estate or a trusted relative or friend know where it can be found.

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Death Benefits

It’s important that you understand your Death Benefit coverage at various points during your membership.

In addition to knowing how and when you become covered by a particular benefit, you should also be sure to keep your beneficiary information up-to-date with the Retirement System. If we should ever have to pay a Death Benefit on your behalf, having accurate information in your records will ensure that we will be able to contact and pay the beneficiary — or beneficiaries — you have chosen.

Tier 1

Ordinary Death Benefit

Eligibility

Benefit

Example
Tier 1 Age 54
Years of service: 34
Last year’s salary: $43,500
34 × $43,500
12
= $123,250 (lump sum)

Alternative Death Benefit

Eligibility

Benefit

Example
Tier 1 Age 55
Years of service: 34
Last year’s salary: $43,500
34 × $43,500
60
× 13.954* = $343,966 (lump sum)
*Annuity factor for member age 55

Accidental Death Benefit

Eligibility

Benefit

Example
Tier 1
Final Average Salary: $43,500
50% of $43,500 = $21,750 (annually)

Out-of-Service Death Benefit

Eligibility

With at least one year, but less than ten years of service credit and:

Benefit

Eligibility

With ten or more years of service credit and:

Benefit

Tiers 2, 3, 4, 5 & 6

Ordinary Death Benefit

Eligibility

Benefit

Example
Age 54
Years of Service: 25
Last Year’s Earnings: $43,500
3 × $43,500 = $130,500 (lump sum)

Accidental Death Benefit

Eligibility

Benefit

Example
Tiers 2, 3, 4 and 5
Final Average Salary: $43,500
50% of $43,500 = $21,750 (annually)

Out-of-Service Death Benefit

Eligibility

With at least one year, but less than ten years of service credit and:

Benefit

Eligibility

With ten or more years of service credit and:

Benefit

Post-Retirement Death Benefit

Eligibility

Benefit

Example
Pre-Retirement Death Benefit: $130,500
50% of $130,500 = $65,250 (1st year of retirement)
25% of $130,500 = $32,625 (2nd year of retirement)
10% of $130,500 = $13,050 (3rd year and thereafter)

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Survivor’s Benefit Program

This program is available to New York State employees only. The benefit is paid in a lump sum upon your death if certain eligibility requirements have been met.

Eligibility

Benefit

Filing

Beneficiaries

Your Obligations

Notify Us If Your Address Changes

The United States Postal Service usually will not forward pension checks to another address. Having your correct address on file also ensures you will receive the tax information, newsletters and statements we send you.

Keep Your Beneficiaries Current

By keeping your beneficiary designation up to date, you ensure that your loved ones receive any post-retirement death benefit due them when you die. Your death benefit beneficiaries can be changed at any time — contact our Call Center and we will send you a form to make the change, or, if you are not yet retired, use the Designation of Beneficiary form (RS5127).

Read Our Publication, A Guide For Retirees

This publication provides information about other benefits you may be entitled to and the services we offer to retirees. It is available on the Publications page on our website at www.osc.state.ny.us/retire/publications, or from our Call Center.

Keep Your Beneficiaries Informed

Your family or a friend will need to notify us when you die so potential benefits can be paid to your designated beneficiaries. They may contact our Call Center or notify us by mail. Either way, they must supply us with a certified copy of your death certificate.

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