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NYC Tier 6 Pension Formula:
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The NYC Tier 6 pension is a retirement benefit plan for New York City employees hired after April 1, 2012. It provides a defined benefit based on years of service and final average earnings, with a standard accrual rate of 1.66% per year of service.
The calculator uses the NYC Tier 6 pension formula:
Where:
Explanation: The formula multiplies the 1.66% accrual rate by the total years of service and the final average earnings to determine the annual pension benefit.
Details: Accurate pension calculation helps NYC employees plan for retirement, understand their expected benefits, and make informed decisions about retirement timing and financial planning.
Tips: Enter years of service (can include decimal values for partial years) and final average earnings in USD. Both values must be positive numbers.
Q1: What is included in Final Average Earnings?
A: FAE typically includes the average of the highest consecutive years of earnings, usually the final 3-5 years of employment, including regular salary and certain additional compensation.
Q2: Are there maximum benefit limits?
A: Yes, Tier 6 pensions are subject to IRS limits and may have maximum benefit caps based on years of service and earnings history.
Q3: Can years of service from previous employment count?
A: In some cases, prior service credit may be purchased or transferred, but this depends on specific circumstances and eligibility requirements.
Q4: What is the minimum retirement age for Tier 6?
A: The minimum retirement age is typically 63, but early retirement options may be available with reduced benefits.
Q5: How does Tier 6 differ from previous tiers?
A: Tier 6 generally requires higher employee contributions, later retirement ages, and uses a 1.66% accrual rate compared to higher rates in earlier tiers.