Will My Pension Transfer From New York to Connecticut?

Retirees

Once you retire with a pension from the New York State and Local Retirement System, you're free to live wherever you wish, and may have your checks sent to Connecticut by filing a change of address form with NYSLRS, or simply receiving electronic deposits in your bank account. The base amount of your pension will be the same as if you remained living in New York, although New York doesn't assess income taxes on its state pensions, and Connecticut taxes out-of-state pension distributions, so you should expect a decline in post-tax pension amounts.

Depending upon when you were hired and what benefit package tier level you receive, you may be vested in the NYSLRS system after five or 10 years of service to a NYSLRS employer. Vested pensioners may not withdraw funds from the New York system. Workers may apply for retirement benefits when they reach the age of 55 or any time after, and begin drawing a NYSLRS pension as if they retired in New York.

If you're a non-vested beneficiary of the NYSLRS pension system, you may withdraw your pension at any time by using a withdrawal application to refund contributions into the system. Because Connecticut allows employees with prior service in another state to purchase pension credits, the funds withdrawn from the NYSLRS may be reinvested into the Connecticut State Employees Retirement system. Connecticut employees may only purchase one year for every two years served in Connecticut, and must provide documentation from NYSLRS that confirms dates of employment in the New York retirement system.

Pension credits earned working for a private company do not transfer to the Connecticut State Employees Retirement system. Pension credits may transfer between private employers in Connecticut and New York, depending upon both employers' policies and plan rules. Consult with your new and old companies' human resources department to determine if a transfer of pension credits applies to your new position. If it doesn't you may be able to roll your pension credit over into a retirement account such as a 401(k) or traditional IRA without receiving a tax penalty.