Twenty years of service changes the whole calculation, not just the last year of it. Here is what your pension pays, and what starting it early costs for good.
At nineteen years of service a NYCERS Tier 4 pension pays 31.7% of your final average salary. At twenty years it pays 40%. The rate does not just rise for the extra year, it rises for every year you have worked, which is why the twentieth year is worth more than any year before it.
This page explains the 62/5 plan in plain English: who is in it, how the benefit is worked out, what retiring before 62 permanently costs, and the salary rule that quietly limits a big final year. Every figure comes from the plan document NYCERS publishes, and the sources are listed at the bottom.
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Most pension formulas pay you a little more for each extra year. Tier 4 does something different at twenty years: the rate rises from 1⅔% to 2%, and the new rate applies to every year of service you have, not only the years past twenty.
So nineteen years pays 31.7% of your final average salary. Twenty years pays 40%. One more year moves the whole calculation.
These are NYCERS' own published figures, from the allowance table in the plan document:
| Final average salary | 19 years | 20 years | Difference |
|---|---|---|---|
| $60,000 | $19,000 | $24,000 | $5,000 |
| $75,000 | $23,750 | $30,000 | $6,250 |
| $90,000 | $28,500 | $36,000 | $7,500 |
That is a 26% increase at every salary level, for one year of work, and it repeats every year for the rest of your life. If you are close to twenty years, this is the single most valuable thing to know about your pension.
Figures are Maximum Retirement Allowances before any option reduction. Choosing a survivor option lowers your own benefit, and a shortfall in your contribution account reduces it too.
"Tier 4" is not one plan. Three sit under the same label, and your membership date decides which one you are in. Using the wrong one gives you a wrong number, so start here.
Two exceptions worth knowing. Bridge and Tunnel Maintainers, Assistant and Senior Maintainers, and Laborers at MTA Bridges and Tunnels are in the 62/5 plan whenever they joined after July 26, 1976, so the 1995 cutoff does not move them. And if you were mandated into 57/5 but transferred an older membership from another New York State system, you may be able to elect back into 62/5 once the transfer is processed.
Members who joined NYCERS after July 26, 1976 and before September 1, 1983 hold what the plan calls Tier 3 rights. The formula is the same, but the benefit is then reduced by half of your Primary Social Security benefit at 62. That offset is calculated only on earnings where you also earned NYCERS service credit.
This is the most commonly missed fact in Tier 4. If you are comparing numbers with a colleague who joined later and yours looks lower, this is usually why. The calculator on this page does not apply the offset, so if you are in that window, treat its figures as a ceiling and confirm yours with NYCERS.
"Tier 4" exists in both systems, and people use the phrase as though it means one thing. It does not. NYCERS covers New York City employees. NYSLRS, run by the State Comptroller, covers state and local government employees outside the city. They agree on a lot, and they differ on one thing that can be worth a quarter of your pension.
| NYCERS (62/5) | NYSLRS (ERS Tier 4) | |
|---|---|---|
| Full benefit at | 62 | 62, or 55 with 30 years |
| Under 20 years of service | 1⅔% a year | 1.66% a year |
| 20 to 30 years | 2% a year | 2% a year |
| Beyond 30 years | 1.5% a year | 1.5% a year |
| Early reduction at 55 | 27% | 27% |
| 30 years waives the reduction | No | Yes |
That last row is the one that matters. A state employee with 30 years of service can start their pension at 55 with no reduction at all. A city employee in the 62/5 plan doing exactly the same thing takes a permanent 27% cut. Same tier number, same age, same service, and a quarter of the pension gone in one case and not the other.
Pick your system in the calculator above and it applies the right rules. If you are on the state side, the NYS retirement calculator compares Tier 4, Tier 5 and Tier 6 together, because the tier you were hired into changes the answer more than anything else.
The formula. Under twenty years of credited service, 1⅔% of final average salary for each year. From twenty to thirty years, 2% for each year. Past thirty years, 2% for the first thirty plus 1.5% for each year beyond.
The salary base. Your final average salary is built from your highest consecutive years of wages, and one rule catches people out. Under the Kingston Limitation, wages in any single year used in the calculation cannot exceed the average of the previous two years by more than 10%. Anything above that is stripped out before the average is taken. So a large final-year jump, from overtime or a late promotion, may not count the way you expect.
Retiring before 62. Under a provision called Tier Equity, going early carries a permanent reduction. It is not a flat annual rate: 6% for the first year early, another 6% for the second, then roughly 3% for each year after that.
| Age your pension starts | 61 | 60 | 59 | 58 | 57 | 56 | 55 |
|---|---|---|---|---|---|---|---|
| Reduction | 6% | 12% | 15% | 18% | 21% | 24% | 27% |
The reduction is calculated by month, so retiring partway through a year lands between these figures. And it is permanent. It does not lift when you reach 62.
Vesting takes five years of credited service. A vested benefit you leave to collect later is calculated the same way, so the twenty-year threshold matters just as much if you are leaving city service early.
You are if you joined NYCERS between July 27, 1976 and March 31, 2012. Two groups are excluded: the Uniformed Force of the Department of Correction, and investigators employed in a District Attorney's office. Anyone who joined on or after April 1, 2012 is in Tier 6, not Tier 4, and the rules there are different.
No. Police and firefighters are not in NYCERS at all. They belong to the Police Pension Fund and the Fire Department Pension Fund, and their post-2009 members are Tier 3 under Article 14 of the Retirement and Social Security Law. If you are an officer or a firefighter, none of the figures on this page apply to you.
40% of your final average salary if you retire at 62 or later, because the 2% rate applies to all twenty years. At nineteen years it is 31.7%. That step is the reason the twentieth year is worth more than any year before it.
You can, with five years of credited service, but the pension is permanently cut by 27%. The cut applies for life and does not lift at 62.
Less than most people expect. The Kingston Limitation stops any single year in the calculation from exceeding the average of the previous two by more than 10%, and strips out the excess before averaging.
New York does not tax NYCERS pension income. Federal treatment is a separate question, and it depends on your own return. Take that one to your tax professional.
Knowing the number is the start. What it does not tell you is whether your 457(b) is positioned for the years before Social Security starts, what a survivor option really costs you, or whether working one more year past twenty is worth it against everything else in your life.
If you want to talk it through, the first conversation is fifteen minutes and there is nothing to buy. Bring your numbers.
Sirmium Capital LLC is a registered investment adviser. Educational information only, not personalized financial, tax, or legal advice. Registration does not imply any particular level of skill or training.
Reviewed as of July 2026. Every figure on this page comes from the plan document NYCERS publishes for this plan. The benefit table on this page was checked against all thirty cells of the SPD's own Maximum Retirement Allowance table and reproduces each one.
Sources: NYCERS Summary Plan Description, Tier 4 – 62/5, June 2026 (formula p.58, Tier Equity reduction p.59, Kingston Limitation and allowance table p.60, vesting p.44, Tier 3 rights p.104) · NYCERS Tier 4 plan descriptions · NYCERS 57/5 Retirement Plan for Tier 4 Members · NYS Comptroller publication 1522, Coordinated Plan for ERS Tier 3 and 4 Members (benefit and eligibility) · NYS Comptroller 1522, Retiring Before Age 62 (reduction table and the 30-year waiver). Statutory references are the ones the SPD itself prints: RSSL §600, §603(i)(2), §604, §612(a), §516(b). Rules and figures change; confirm your own situation with NYCERS, and route tax questions to your tax professional.