Do you have questions about your defined benefit plan?
What is a defined benefit plan? A defined benefit plan provides an allowance at retirement based on the member's age, years of service at retirement, and salary.
What is the earliest age that I can retire? If your membership began prior to January 1, 1978, upon attaining age 55 you are eligible to retire. There are no minimum service (vesting) requirements for members in this category.
If your membership began on or after January 1, 1978 through April 1, 2012 and you are a member of Group 1 or Group 2, you must have at least ten years of creditable service, and be age 55 or older to be eligible to receive a retirement allowance. If your membership began on or after April 2, 2012 and you are a member of Group 1 or Group 2, you must have at least ten years of creditable service and be age 60 or older to receive a retirement allowance. If such a member terminates their employment prior to completing ten years of creditable service, eligibility for benefits is limited to a refund of accumulated deductions. A superannuation retirement allowance would not be payable. However, a member may always leave their money in the retirement system and achieve ten years of service via later public employment.
What options do I have when I retire and what do they mean? Option A - The member receives a benefit for the rest of their life. Upon their death there are no payments to any beneficiary except for a balance of payment owed for the month in which they died. Option B - Member receives a monthly benefit for the rest of their life, but the benefit typically is 1-5% less than the Option A. Any balance in their account is paid to named beneficiary/beneficiaries in a lump sum payment. Typically the account is depleted within 8-12 years after retirement and there is no balance in the account. Option C - The member receives a lifetime benefit and upon their death their named beneficiary is awarded a lifetime benefit for their lifetime. This benefit is typically 7-15% less than the Option A benefit. Eligible beneficiary must me a spouse, former spouse (provided they have not remarried at the time of member begins receiving benefit), parent, child or sibling. If the beneficiary pre-deceases the member, the member’s benefit “pops up” to the Option A benefit amount.
When should I contact the Retirement Office about determining a retirement date? When you first begin thinking about the possibility of retiring! Make an appointment with the Retirement Office to review creditable service, veteran service, anticipated age at retirement and any other potential situations that may factor in to your final determination of when exactly to retire.
Who else should I notify of my retirement? Once you have solidified a date, contact the Payroll office in Human Resources to verify your eligibility for salary benefits such as vacation, longevity, sick leave buyback and the payment dates.
In addition, you can discuss your health, life and dental insurance options, update your beneficiary and provide the HR department with any updated telephone and address information.
When will I receive my first pension allowance? It can take eight to twelve weeks to process your retirement and for you to receive your first retirement allowance.
Are there any limits on working after I retire? Retiree’s cannot exceed working 960 hours within a calendar year, and in the first year of retirement, their post retirement earnings cannot exceed the difference between the current salary of the position (from which the member retired) and the amount of his or her annual pension. After the member has been retired for at least one full calendar year, This earnings limit is increased by $15,000. These limitations pertain to any municipal or Commonwealth of Massachusetts position covered under the Public Employees Retirement Administration Commission.