What Types of Massachusetts State Pensions are offered?
Employees will find two types of state-funded pensions for retirement preparations. The type of employment will determine which program is right for the worker:
The Massachusetts State Employees’ Retirement System (MSERS)– Benefit programs available for general state employees, and. It is mandatory for all state employees covered in the program who are considered permanent employees both full-time and part-time.
The Massachusetts Teachers’ Retirement System (MTRS)–
What are payroll contributions?
Payroll deductions for the MSERS pension are the same regardless of position held and will be determined based on the employees’ enrollment date:
- If employed before January 1, 1975 contributions are 5%
- January 1, 1975 to December 31, 1983 enrollments pay 7%
- January 1, 1984 to June 30, 1996 enrollments pay 8%
- July 1, 1996 and beyond rates are 9% payroll contributions to the program
Exceptions to the above dates and contributions apply to specific circumstances. State Police employees that enrolled after July 1, 1996 have a 12% payroll contribution. In addition, if membership to the pension plan began after April 2, 2012 and the employee has reached the maximum service credit years of 30 the contributions will reduce to 6%.
Annual compensation may also affect contribution rates. If an employee in any position earns over $30,000 per year, an additional 2% payroll contribution will be applied to any salary amounts exceeding the $30,000 limit. The additional 2% will be combined with the employees current rates determined by enrollment date and only apply to the income above the limit.
Employees are vesting once 10 years of service credit has been reached. Employees may take full benefits in retirement under the following circumstances:
- When an employee has reached 20 years of full-time credible service may retire at any age
- Employees enrolled before April 2, 2012 may retire at age 55 with 10 years service
- Enrolled employees after April 2, 2012 who is a member of Group 1 may retire at age 60 with 10 years of service
Employees in any category reach their maximum benefits with 20 years of creditable service regardless of age, which cannot exceed 80% of annual compensation.
Benefit calculations are based on a number of employee specific factors including the following:
- The age of employee as of most recent birthday
- Amount of service credit
- The group classification which is determined by state-employed position
- The average monthly salary of highest 36 consecutive months for those enrolled before April 2, 2012
- The highest 5 consecutive years of regular annual salary if enrollment was after April 2, 2012 are used to calculate benefits
The exception in this category is for the employees’ specific within Group 3. State police may retire before age 55 with 20 years of service with full benefits due to the nature of their work.
Group Classifications within MSERS
Although all state employees are covered within the MSERS system, each group falls under a classification depending on the position held. The following employee groups exist for benefit purposes:
- Group 1 consists of officials and general employees within the state. This may include such positions as Clerical or administrative work, technical employees and laborers. Any other state employee that does not fall into a specific group should be considered part of this as well.
- Group 2 members are those that provide supervision, direct care and custody to individuals under parole or mentally disabled
- Group 3 is reserved specifically for State Police officers
- Group 4 members are those working in public safety including officers, officials and specific correction officers
Special Retirement Benefits
In addition to monthly benefits, a portion of contributions are placed into an annuity bank account while will be available for use after retirement. Other benefits included with the MSERS program are:
Ordinary and accidental disability- vesting is required for ordinary disability benefits but accidental disability requires no vesting period to apply.
There are three options members may chose for benefit distribution. Depending on the option chosen, survivor benefits are available. Choosing Option A will not give allowance for survivor benefits.
The Teachers Retirement System
Specific retirement benefits exist for those state employees working within public school systems, Universities and Community Colleges. Benefits vary from standard State Retirement Plans and include the following vital information:
Contributes vary depending on start date and if an employee is enrolled in Retirement or Retirement Plus system. All Retirement Plus employees play 11% payroll contributions. Regular memberships are determined by date of enrollment as follows:
- Before January 1, 1975-5%
- January 1, 1975 through December 31, 1978-7%
- January 1, 1984 to June 30th, 1996-7%
- July 1, 1996 to June 30th, 2001- 8%
- July 1, 2001 through April 1, 2012-9%
- Employees enrolled after April 2, 2012 pay 9% contributions until the 30 years of service credit have been reached at which point it reduces to 6%
All employees enrolled after January 1, 1979 will also be required to pay an additional 2% contribution on any salary over $30,000 per year. Retirement may be taken at age 55 with full benefits if an employee has 10 years vested service credit. Though employees may retire at any time, funds must be left in the retirement account until the employee reaches retirement age.
Cost of Living
Cost of Living and inflation protection and what is the level for 2012, 2013 and 2014
COLA adjustments are determined yearly to allow retirees to keep up with inflation and growing living expenses.