Tier 5 looks like Tier 4 until you retire early. The formula is identical. The early retirement reduction is not: 38.33% at age 55 against Tier 4's 27%, and in Tier 5 thirty years of service does not undo it. Here is what that costs in your own figures.
You are in NYSLRS Tier 5 if you joined the Employees' Retirement System on or after January 1, 2010 and before April 1, 2012. You can claim a service retirement at 55 with five or more years of credited service, and the full benefit at 62. Going before 62 cuts the pension 38.33% at age 55, on a schedule that eases as you get closer, and the Comptroller is explicit: "Once you retire with a reduced benefit, the reduction is permanent, it does not end when you turn 62." The benefit itself is 1.66% of final average salary per year under 20 years, 2% per year at 20 through 30, and 1.5% per year beyond 30.
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The comparison
Tier 5 does not use a flat percentage per year. The reduction falls five points a year from 55 to 60, then 6.67 at 61, and reaches zero at 62. It is prorated by your exact age at retirement, so retiring partway through a year lands between these figures.
| Age benefit begins | Permanent reduction | You keep |
|---|---|---|
| 62 | None | 100% |
| 61 | 6.67% | 93.33% |
| 60 | 13.33% | 86.67% |
| 59 | 18.33% | 81.67% |
| 58 | 23.33% | 76.67% |
| 57 | 28.33% | 71.67% |
| 56 | 33.33% | 66.67% |
| 55 | 38.33% | 61.67% |
Source: Office of the New York State Comptroller, Coordinated Plan for ERS Tier 5 Members (publication 1523), Retiring Before Age 62.
The Comptroller states it plainly: "Once you retire with a reduced benefit, the reduction is permanent, it does not end when you turn 62." There is one exception to the reduction itself, and it is narrow. A uniformed court officer or peace officer employed by the Unified Court System with at least 30 years of credit is not reduced. Every other Tier 5 member retiring at 55 with 30 years still takes the full 38.33%.
The benefit formula in Tier 5 is identical to Tier 4. Same 1.66% under 20 years, same 2% at 20 through 30, same 1.5% beyond 30, same full benefit at 62. Read a Tier 4 explainer and every number will look right.
Two things are different, and both only show up when you retire early.
The reduction at 55 is 38.33%, not 27%. Eleven points of permanent pension, on the same salary and the same service.
Thirty years does not waive it. In Tier 4 reaching 30 years generally removes the reduction entirely. In Tier 5 that waiver reaches only uniformed court officers and peace officers in the Unified Court System.
So the Tier 4 member and the Tier 5 member who both leave at 55 with 30 years do not get similar pensions. The Tier 4 member collects in full. The Tier 5 member collects 61.67% of it, for life. The NYS retirement calculator puts all three tiers side by side if you want to see the whole spread.
You are in ERS Tier 5 if you joined the Employees' Retirement System on or after January 1, 2010 and before April 1, 2012. Joined earlier and you are Tier 4; on or after April 1, 2012 and you are Tier 6, where the cut at 55 reaches 52%.
City employees: there is no NYCERS Tier 5. NYCERS runs Tier 4 as one continuous tier from July 27, 1976 through March 31, 2012. The same 2010 hire date puts a State employee in Tier 5 and a City employee in Tier 4. If your system is NYCERS, this page is not your plan.
This page covers the Employees' Retirement System only. The Police and Fire Retirement System has its own Tier 5, which starts January 9, 2010, with its own plans and rules that are not modelled here. NYPD and FDNY members are in neither system: use the NYPD calculator or the FDNY calculator.
The formula. Under 20 years of credited service, the pension is 1.66% of final average salary for each year. At 20 through 30 years it is 2% of final average salary for each year, so twenty years pays 40%. Beyond 30 years each additional year adds 1.5%. The Comptroller's own worked examples, on a 35,000 dollar final average salary, run 11,039 dollars at 19 years, 14,000 at 20 years, and 21,525 at 31 years.
Notice the step at twenty. Nineteen years pays 31.5% of salary; twenty pays 40%. That jump is the single largest return on a year of service anywhere in the plan, and it is worth knowing before you set a date.
The salary. Final average salary is the average of the wages you earned during any 36 consecutive months when your earnings were highest, which is usually the last three years. It can include regular salary, holiday pay, up to three longevity payments, and payment for up to 30 days of accumulated vacation where the period used is the 36 months immediately before you retire. It will not, in most cases, include unused sick leave, termination pay, payments made in anticipation of retirement, or any payment for time not worked.
The 10% limitation. If earnings in any year of the period exceed the average of the previous two years by more than 10%, the amount above 10% is left out. A late promotion or a heavy final year raises the pension, but not without limit.
The overtime cap Tier 4 does not have. Tier 5 counts overtime toward final average salary only up to an annual limit, and overtime above that limit cannot be used at all. Tier 4's entry is plain overtime earned in the period, with no cap. The Tier 5 limit rises 3% every year, so it is a moving number rather than a fixed one. The Comptroller publishes the current figure on its overtime limits for Tier 5 page. Use that figure, not one copied from an older document.
Sources: Office of the New York State Comptroller, Coordinated Plan for ERS Tier 5 Members (publication 1523), Eligibility, the Benefit and Filing; Final Average Salary; Limitations.
The reduction is fixed by statute, so the decision it forces is a money decision, not a pension one. If leaving at 55 costs 38.33% for life, the question becomes what the years between 55 and 62 are funded by. A 457(b) is usually the other half of that answer, and it has withdrawal rules the pension does not.
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Reviewed as of August 2026. Every figure on this page is taken from the plan document the Office of the New York State Comptroller publishes for this tier. This page describes the Employees' Retirement System only. It does not describe the Police and Fire Retirement System, whose Tier 5 begins on a different date, and it does not describe NYCERS, which has no Tier 5. Your own service credit, plan and eligibility are questions for NYSLRS, and their figures control.
Sources: Office of the New York State Comptroller, Coordinated Plan for ERS Tier 5 Members, publication 1523 (tier status, the benefit formula and worked examples, the reduction table and its permanence, final average salary and the 10% limitation, the overtime limit), and What Tier Are You In? (the ERS and PFRS membership date tables). Read 2026-08-15.
Sirmium Capital LLC is a New York state-registered investment adviser. Educational information only, not personalized financial, tax, or legal advice, and not a recommendation to retire at any particular age. Tax questions go to your own tax professional. Registration does not imply any particular level of skill or training.