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Pension Guide for New Yorkers

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The security of a pension can be a tremendous benefit of one’s job. A pension can provide thousands of extra dollars in support during one’s retirement. A pension plan typically varies depending on one’s salary and position level. A pension is treated as income under tax laws, and it may be subject to taxation at the federal, state and city levels. If you live in New York, you should be aware of taxation laws and how they may impact your pension plan.

The New York State Common Retirement Fund 

In New York, government employees receive access to the New York State Common Retirement Fund (CRF). The CRF is held in trust for over one million employees at the State and local government levels. The fund is comprised of $160.7 billion. The CRF is one of the top-managed funds in the U.S. Pensions are guaranteed for NY government workers based on their peak salaries and the duration of their careers.

New Yorkers should seek to stay updated on changes in the management policies of the CRF. Recently, Governor Andrew Cuomo instituted a policy that will allow local authorities to hold off on pension fund payments so that budget gaps can be met. The CRF is managed by the State Comptroller Thomas P. DiNapoli, and the comptroller has the responsibility of managing the security and investments of the CRF.

Defined Benefit Plans

A defined benefit plan is a traditional type of pension plan. Private companies may administer a direct benefit plan, but they have grown rare in recent years. In a defined benefit plan, the company provides a specified sum to the employee during his or her retirement years. For example, a company may provide a $3,000 pension every month to a retired individual. A defined benefit plan may require that an individual work for a company for a certain number of years before he or she can enjoy the benefits of the pension plan. If the individual quits before this time period, he or she may forfeit any invested pension benefits.

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