You’ve probably heard the hallway chatter. Maybe you’ve seen the "Fix Tier 6" stickers on a colleague's laptop or heard a veteran teacher grumble about how much better things were back in the Tier 4 days. If you started working for New York State or a participating local government on or after April 1, 2012, you are in the NYS Tier 6 pension system. It’s been the punching bag of public labor unions for over a decade.
But here is the thing: the ground is shifting.
In the last couple of years, and specifically moving into 2026, the rules have actually gotten better. Not perfect, but better. If you’re trying to figure out if you can ever actually afford to retire, you need to look at the recent legislative wins that changed how your "Final Average Salary" is calculated and how much money is being yanked out of your paycheck every two weeks.
The Big 2024-2026 Shift: The 3-Year FAS Rule
For a long time, the biggest gripe with Tier 6 was the Final Average Salary (FAS) calculation.
Originally, Tier 6 required a five-year average. Most people's salaries peak at the very end of their careers. By forcing a five-year average instead of the three-year average used in Tier 4, the state was effectively lowering your starting pension check by thousands of dollars.
That changed. As of April 2024, the FAS calculation for Tier 6 members was reduced from five years to three years.
This is huge. Honestly, it’s the biggest pension win for NYS workers in twenty years. According to groups like NYSUT (New York State United Teachers), this single change could add roughly $100,000 in lifetime earnings for a typical retiree. If you retire in 2026, your pension will be based on your three highest consecutive years of pay.
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There is a catch, though. To prevent "salary spiking," the law says any year’s salary used in the FAS cannot exceed 110% of the average of the previous two years. Basically, you can't just take every overtime shift in the world in your final year and expect the state to pay for it forever.
Why Your Paycheck Might Look Slightly Different This Year
If you’ve noticed a small bump in your take-home pay recently, it might be because of how contribution rates are being calculated for the 2025-2026 fiscal year.
Tier 6 is a "variable" system. Unlike Tier 4, where everyone eventually stopped paying in after 10 years, Tier 6 members pay for their entire careers. The percentage you pay depends on how much you earn:
- $45,000 or less: 3%
- $45,000.01 to $55,000: 3.5%
- $55,000.01 to $75,000: 4.5%
- $75,000.01 to $100,000: 5.75%
- Over $100,000: 6%
The "sneaky" part used to be that overtime could push you into a higher bracket. You’d work extra hours to help the department, and then the state would reward you by taking an extra 1% of your entire salary.
However, under Chapter 55 of the Laws of 2024, the state extended a rule that allows contribution rates to be determined based on base wages only for the school years ending June 30, 2025, and June 30, 2026. This means if your base pay is $74,000 but you earned $10,000 in overtime, you stay in the 4.5% bracket instead of jumping to 5.75%.
It saves you real money.
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The Age 63 Wall
We have to talk about the elephant in the room: retirement age.
In Tier 4, you could hit the "Magic 30"—30 years of service—and retire at 55 with a full pension. In Tier 6, the full retirement age is 63.
Can you retire earlier? Yes. You can retire as early as 55 if you have at least five years of service (you’re "vested"). But the penalties are brutal.
If you retire at 55 with 30 years of service under Tier 6, you only get about 26.4% of your FAS. If you were Tier 4, you’d get 60%. That is a massive gap. It’s why there is so much political pressure right now to lower the retirement age to 55 or 57 for Tier 6.
As of early 2026, there is a Temporary State Commission (established by Senate Bill S4638) specifically looking at how to reform Tier 6 further to help with recruitment and retention. People aren't exactly lining up for civil service jobs like they used to, and the "worse" pension is a big reason why.
Overtime Limits for 2026
While overtime doesn't always bump your contribution rate anymore, there is still a ceiling on how much of it counts toward your actual pension check.
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For 2026, the overtime limit for ERS Tier 6 members is $21,589.
If you earn $30,000 in overtime this year, only that first $21,589 is "pensionable." The rest is just cash in your pocket today. It won't increase your monthly check 20 years from now.
It’s also worth noting that the vesting period is now 5 years. It used to be 10, but that was lowered a couple of years ago. If you can make it five years, you’ve secured a check for life, even if it’s a small one.
Is Tier 6 Actually "Bad"?
It’s popular to hate on it. But compared to a 401(k) in the private sector? It’s still a powerhouse.
Think about it. The NYSLRS (New York State and Local Retirement System) is one of the best-funded in the country. Comptroller Thomas DiNapoli recently announced that the system is over 92% funded.
Most private-sector workers have to hope the stock market doesn't crash the year they turn 65. You don't. Your benefit is a Defined Benefit, meaning the state is on the hook to pay you every month until the day you die, regardless of what the S&P 500 does.
Actionable Steps for Tier 6 Members:
- Check Your Annual Statement: Log into Retirement Online or the NYSTRS portal. Ensure your "Date of Membership" is correct. A single day can sometimes be the difference between tiers if you had prior service.
- Look for "Buy Back" Opportunities: If you worked a summer job at a municipal pool or did part-time work for a SUNY school before you officially joined, you might be able to buy back that time. This can get you to your 20-year or 30-year milestones faster.
- Supplement with a 457(b): Since Tier 6 has a lower "multiplier" (1.66% per year if you have less than 20 years; 1.75% for exactly 20; 2% for years after that), you should really be using the NYS Deferred Comp plan. Even $50 a paycheck makes a difference over 30 years.
- Monitor the Commission: Keep an eye on the state budget negotiations in Albany. There is a very real possibility that the retirement age or the contribution structure will be "fixed" further in the 2026-2027 legislative cycle.
The NYS Tier 6 pension isn't the gold mine that Tier 4 was, but with the recent shift to a 3-year FAS and the 5-year vesting rule, it’s becoming a much more stable foundation for retirement than it was at its inception in 2012.