62-5 SPD:62/5 SPD.qxd - NYCERS

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SUMMARY PLAN DESCRIPTION - 62/5 TIER 4 MEMBERS VERSION APRIL 2012pre-1989 contributions and any non-rollover payments made for the purchase of previous service).At the time of retirement, your Retirement Resolution indicates the amount of IRC 414hand non-IRC 414h contributions included in the calculation of your pension. The IRS considersthe non-IRC 414h contributions to be your “Investment in Contract” for the purpose of determiningthe excludable part of your pension. Consult your tax preparer for further information.The IRS requires taxpayers to remit tax payments on a “pay as you go” basis. In order to avoida penalty at year-end for non-prepayment of the tax on your pension, you must either make paymentsof estimated taxes quarterly, or have income tax withheld from your monthly pensioncheck or electronic payment. You may request income tax withholding when you file yourretirement application. Subsequent changes can be made by filing IRS Form W4P (Form #349).DEATH BENEFITSOrdinary Death BenefitsThe first $50,000 of an Ordinary Death Benefit is considered to come from the New York CityPublic Employees’ Group Life Insurance Plan and is tax-free. Death benefits paid from othersources count towards the $50,000 tax-free amount. For example, if your union pays a deathbenefit of $10,000, then the first $40,000 of your ODB is considered tax-free. For the balanceof the Ordinary Death Benefit that is taxable, NYCERS will withhold Federal taxes unless thebeneficiary files an election to be exempted from such withholding. NYCERS cannot pay any taxabledeath benefit to a beneficiary until the beneficiary returns an election regarding tax withholding.Beneficiaries of deceased members of NYCERS may choose from three options under whichthey can elect to receive or roll over the taxable portion of their lump-sum death benefit. TheFederal Pension Protection Act of 2006 permits non-spouse beneficiaries to roll over the taxableportion of their lump-sum death benefit.Direct payment of the taxable portion, subject to 20% Federal income tax withholding.(The death benefit will be processed under this option if your beneficiary(ies) fail to respondby the deadline stated in the Election of Payment Notice).Rollover of the entire taxable portion into an IRA account.Rollover of a portion of the taxable distribution, designated by the beneficiaries, into an IRAaccount.Accidental Death BenefitsAccidental Death Benefits are paid in the form of a pension to an Eligible Beneficiary(ies) andare tax-free.TAXATIONWWW.NYCERS.ORG75
GLOSSARY OF TERMSNEW YORK CITY EMPLOYEES’ RETIREMENT SYSTEM1099-R TAX FORMA tax form used to report distributions from qualified retirement plans to the IRS. This form issent to retirees annually in the month of January.414(H) CONTRIBUTIONSA provision in the Internal Revenue Code which authorizes the deferral of Federal taxes on membercontributions. This provision does not apply to New York State and local taxes.ACCIDENTIn the realm of disability pensions, the term “accident” has been defined by the courts as: "a sudden,fortuitous mischance, unexpected, out of the ordinary, and injurious in impact."ACCIDENTAL DEATH BENEFITA benefit paid in the form of a pension to the Eligible Beneficiary(ies), as defined by law, of amember who dies as a result of an on-the-job accident not caused by willful negligence on hisor her part.ACCIDENT DISABILITY BENEFITA disability pension paid to a member who has been found to be disabled due to the natural andproximate result of an accident sustained in the performance of his or her duties.ACTUARIALRelating to the mathematical science of life expectancy and risk probabilities. In this science,risks are carefully evaluated, proper costs are assessed and adequate provisions are made forfuture financial obligations.ANNUAL DISCLOSURE STATEMENTA comprehensive annual statement sent to NYCERS members detailing: Membership Information,Loan Activity, Beneficiary Designation, Service Summary and all Account Activity for the calendaryear.BASIC MEMBER CONTRIBUTIONSThe contributions required of all Tier 4 members (except Transit 25/55 plan members) equal to3% of gross wages. These contributions cease upon the attainment of 10 years of CreditedService or upon reaching the tenth anniversary of membership.BASIC TIER 4 PLANThis refers to the 62/5 Plan, the original plan created when Tier 4 was enacted.BUY-BACKThis term relates to the purchase of previous full-time or part-time public service rendered in theemploy of a public entity anywhere in New York State.GLOSSARYCHAPTER 96A law enacted in 1995 which created two additional Tier 4 plans -- the 55/25 plan and the 57/5plan.76
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NEW YORK CITY EMPLOYEES’ RETIREME
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INTRODUCTIONThe New York City Emplo
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MEMBERSHIP AND ELIGIBILITYTier 4 me
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CONTRIBUTIONSThe retirement benefit
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CREDITED SERVICEIn NYCERS’ define
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62-5 SPD:62/5 SPD.qxd - NYCERS

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