Retirement Benefits and Options
Massachusetts provides different types of retirement benefits. A member’s monthly retirement allowance consists of an annuity and a pension. The annuity portion is based on the total amount of contributions and interest in a member’s annuity savings account on the date of the member’s retirement. Unless otherwise specified by law, the pension portion is the difference between the total retirement allowance calculated under the plan and the annuity.
Superannuation Retirement
A superannuation (“regular”) retirement allowance is calculated by a formula which includes the member’s age at retirement, years of creditable service, and salary average over a defined period. The specific formula used in a member’s retirement calculation will depend on when the person established membership in a Massachusetts contributory retirement system as well as his or her assigned group classification.
Superannuation Retirement– Membership prior to April 2, 2012
For those employees who established membership in a Massachusetts contributory retirement system prior to April 2, 2012, the following guidelines apply:
Eligibility: Members in Groups 1, 2 and 4 who established membership in a Massachusetts contributory retirement system prior to January 1, 1978 are eligible to retire upon attaining age 55. There is no minimum service requirement. Members with at least twenty years of creditable service are eligible to retire at any age.
If membership was established on or after January 1, 1978, and the employee is a member of Group 1 or 2, he or she must have at least ten (10) years of creditable service and be at least age 55 to be eligible to receive a retirement allowance. There is no minimum service requirement for members in Group 4. However, they must be at least 55 years old to retire and have performed the duties of a Group 4 member for at least 12 months prior to retirement.
Groups 1, 2 and 4
Calculation: In addition, veterans are entitled to a veteran’s benefit equal to $15 per year for every year of creditable service, up to a maximum additional benefit of $300.To apply for a superannuation retirement allowance, please click on the Retirees Tab and download an Application for Superannuation Retirement. Superannuation Retirement– Membership on or after April 2, 2012
For those employees who established membership in a Massachusetts contributory retirement system on or after April 2, 2012, the following guidelines apply.
A retiree’s benefit cannot exceed 80% of the high, three-year salary average. Group 1 employees reach the maximum benefit of 80% of regular compensation at age 65 with 32 years of service. Group 2 employees reach the maximum benefit allowed at age 60 and Group 4 employees at age 55. Please note that veterans can still receive the additional veteran’s benefit even if it causes their superannuation retirement allowance to exceed 80% of their average annual rate of compensation.
A member’s monthly retirement allowance is calculated using the member’s age at retirement, years of creditable service, and amount of the member’s high, three-year average salary. Only regular compensation is included in a member’s salary average.
Eligibility
If membership was established on or after April 2, 2012, and the position held by the member is classified in Group 1, the member must have at least ten (10) years of creditable service and be at least age 60 to be eligible to receive a retirement allowance. If the position held by the member is classified in Group 2, the member must have at least ten (10) years of creditable service and be at least age 55 to be eligible to receive a retirement allowance. However, they must have performed the duties of a Group 2 member for at least 12 months prior to retirement. There is no minimum service requirement for members in Group 4. However, they must be at least 55 years old to retire and have performed the duties of a Group 4 member for at least 12 months prior to retirement.
Calculation
In addition, veterans are entitled to a veteran’s benefit equal to $15 per year for every year of creditable service, up to a maximum additional benefit of $300.To apply for a superannuation retirement allowance, please click on the Retirees tab and download an Application for Superannuation Retirement. Employees who established membership in a Massachusetts contributory retirement system prior to April 2, 2012, and who have accrued at least thirty (30) years of creditable service, who resign before attaining age 55 may be entitled to a termination retirement allowance.
Similarly, a member with at least twenty (20) years of creditable service:
who fails to be reappointed, or
whose office or position is abolished, or
who is removed or discharged from his or her office or position for a cause other than moral turpitude, may be entitled to a termination retirement allowance .A termination retirement allowance consists of an annuity and a pension equal to one-third of the highest average annual rate of regular compensation during any consecutive three-year period.
Termination Retirement– Membership prior to April 2, 2012
A retiree’s benefit cannot exceed 80% of the high, five-year salary average. Group 1 employees reach the maximum benefit of 80% of regular compensation at age 67 with 32 years of service. Group 2 employees reach the maximum benefit allowed at age 62 and Group 4 employees at age 57. Please note that veterans can still receive the additional veteran’s benefit even if it causes their superannuation retirement allowance to exceed 80% of their average annual rate of compensation.
A member’s monthly retirement allowance is calculated using the member’s age at retirement, years of creditable service, and amount of the member’s high, five-year average salary. Only regular compensation is included in a member’s salary average.
Ordinary Disability Retirement For those employees who established membership in a Massachusetts contributory retirement system prior to April 2, 2012, the following guidelines apply.
Eligibility
A member who has accrued at least ten (10) years of creditable service and who becomes permanently incapacitated from performing the essential duties of his or her job because of illness or injury which is not duty related may apply for an ordinary disability retirement allowance.
Calculation
Veterans will receive an allowance consisting of a pension equal to 50% of the regular compensation received during the last 12 months of employment, plus an annuity. In the event a veteran’s superannuation allowance is greater than the ordinary disability retirement allowance, the veteran will receive the greater benefit.
Ordinary Disability Retirement—Membership on or after April 2, 2012
For those employees who established membership in a Massachusetts contributory retirement system on or after April 2, 2012, the following guidelines apply.
For more information about disability retirement benefits in general, please refer to PERAC’s Guide to Disability Retirement for Public Employees . Members who wish to apply for an ordinary disability retirement allowance should contact our office.
For non-veterans, the ordinary disability retirement allowance is equal to the amount payable for a superannuation retirement. The benefit is calculated using the member’s age factor, creditable service and the member’s high, three-year average salary. If the member has not yet attained the age of 55, the age factor will be increased to 55, providing a larger benefit.
Eligibility
A member who has accrued at least ten (10) years of creditable service and who becomes permanently incapacitated from performing the essential duties of his or her job because of illness or injury which is not duty related may apply for an ordinary disability retirement allowance.
Calculation
Veterans will receive an allowance consisting of a pension equal to 50% of the regular compensation received during the last 12 months of employment, plus an annuity. In the event a veteran’s superannuation allowance is greater than the ordinary disability retirement allowance, the veteran will receive the greater benefit.
Accidental Disability Retirement
For more information about disability retirement benefits in general, please refer to PERAC’s Guide to Disability Retirement for Public Employees. Members who wish to apply for an ordinary disability retirement allowance should contact our office.
For non-veterans, the ordinary disability retirement allowance is equal to the amount payable for a superannuation retirement. The benefit is calculated using the member’s age factor, creditable service and the member’s high, five-year average salary. If the member has not yet attained the age of 60, the age factor will be increased to 60, providing a larger benefit.
Eligibility
It is important that members file a notice of injury with the retirement system and their employer if they have an accident on the job or are exposed to a health hazard. Notice should be filed within 90 days of the occurrence to establish an official record of the injury and to later seek accidental disability benefits.
A member who becomes totally and permanently incapacitated from performing the essential duties of his or her job because of illness or injury sustained, or hazard undergone, while in the performance of duties, may apply for an accidental disability retirement allowance.
Calculation
The total accidental disability retirement allowance (pension and annuity) is capped at 75% of the annual rate of regular compensation if the member’s service entry date was after January 1, 1988.To apply for an accidental disability retirement allowance, please contact our office for assistance. A department head is authorized to file an application to retire a member for disability or superannuation. All service and age requirements that apply to applications filed by members will apply to any employer-initiated applications. Under certain circumstances, a member may request a hearing before the retirement board within fifteen (15) days of receiving the involuntary application. Members who receive an involuntary application for retirement from their department head should contact the Belmont Retirement System office for guidance. The payment options available to retirees are the same for all retirement types.
OPTION B: provides an allowance that is approximately 2% less than Option A. Upon the retiree’s death, the balance of the retiree’s contributions, if any, is paid to the retiree’s beneficiary. Should a designated Option C beneficiary predecease the retiree, the retiree’s Option C benefit will “pop-up” to the Option A retirement allowance.
Please note that all retirees and Option C beneficiaries must receive their monthly allowance by direct deposit to a bank checking or savings account. A direct deposit authorization form can be downloaded from our website under the Retirees Tab.
OPTION C: is the joint and last survivor allowance. The retiree’s allowance is approximately 7% to 14% less than the Option A allowance. Upon the retiree’s death, the designated beneficiary will be paid a monthly allowance for the remainder of the beneficiary’s lifetime. The survivor benefit is equal to 2/3 of the retirement allowance that the retiree was receiving. A retiree may name only one person as the Option C beneficiary and it must be the retiree’s parent, spouse, sibling, child or former spouse who has not remarried.
OPTION A: provides the highest payment to the retiree. All payments will cease upon the retiree’s death and no survivor benefits will be provided.
Involuntary Retirement
A department head is authorized to file an application to retire a member for disability or superannuation. All service and age requirements that apply to applications filed by members will apply to any employer-initiated applications. Under certain circumstances, a member may request a hearing before the retirement board within fifteen (15) days of receiving the involuntary application. Members who receive an involuntary application for retirement from their department head should contact the Belmont Retirement System office for guidance.
Retirement Payment Options
NOTE: There are certain presumptions that apply only to specific public safety personnel. (i.e., the Heart Law, Lung Law, Cancer Presumption) Members retiring for accidental disability retirement under one of the presumptions need not provide an injury date. The date of injury for purposes of calculating the member’s retirement allowance will be the date the member last received regular compensation. For more information about the presumptions and disability benefits in general, please refer to PERAC’s Guide to Disability Retirement for Public Employees.
A member’s accidental disability retirement allowance consists of a pension that is 72% of the annual rate of regular compensation on the date of injury, OR 72% of the average annual rate of regular compensation for the last 12 months preceding the effective date of retirement, whichever is greater; plus, an annuity, plus a benefit for dependent children. In addition, veterans are entitled to a veteran’s benefit equal to $15 per year for every year of creditable service, up to a maximum additional benefit of $300.
Regular Compensation
Regular compensation is the amount of earnings upon which a member pays retirement contributions. Regular compensation will be used in determining a member’s final average salary, which is one of the factors used in calculating a retirement allowance. Compensation must comply with statutory and regulatory requirements in order to be pensionable.
Regular compensation generally includes:
the annual rate of compensation in a member’s salary schedule
educational incentives longevity payments made for length of service
premiums for holidays and shift differentials for police and fire
payments for rendering instructional training
hazmat pay for police and fire
on call or standby pay
Regular compensation generally excludes:
- overtime
- amounts paid as bonuses other than cost-of-living bonuses
- payments which will not recur , and payments which will recur for only a limited or definite term (e.g, salary augmentation plan)
- amounts paid for unused vacation, sick leave, or other leave
- severance pay
amounts paid as early retirement incentives - any payments made as a result of giving notice of retirement
- amounts paid for housing and lodging
- amounts paid for travel
- amounts paid for clothing, uniform, tool allowances
- amounts paid for annuities
- amounts paid for expense payments
- amounts paid for automobile usage
- amounts paid for insurance premiums or for not participating in the employer’s health insurance plan.
Creditable Service
Creditable service is one of the factors used to calculate the amount of a member’s retirement benefit. It is also determined whether a member has vested. A member will become vested upon reaching ten (10) years of creditable service. Vesting enables a member who becomes inactive to leave his or her retirement deductions on deposit with the retirement system in order to qualify for a retirement allowance upon attaining age fifty-five (55) or greater.
The amount of service credit a member accrues depends on the number of hours per week worked. As of September 1, 2017:
- Members are credited with one year of service for each year of employment of not less than 20 hours per week, or a yearly proportion thereof.
- If the member’s hours of employment fall below 20 hours per week, members are credited with one-half year of creditable service, or a yearly proportion thereof.
Creditable Service—Leaves of Absence
Authorized paid leaves of absence will be applied toward your creditable service. The credit received is based on the length of the leave and the amount of compensation received by the member. For unpaid leaves, members can earn up to one month of creditable service upon application.
Creditable Service—Transfers In
If a member leaves his or her job and goes to work for another governmental unit which comes under the provisions of Massachusetts General Laws Chapter 32, his or her creditable service will be transferred from the other retirement system to the Belmont Retirement System. Such service will be added to service rendered in the Belmont Retirement System to determine vesting. Special provisions apply to members who work for multiple employers and belong to two or more retirement systems.
Creditable Service—Service Purchases
Active members may be eligible to purchase non-contributing service rendered prior to establishing membership with the Belmont Retirement System. Such service will be added to service rendered in the Belmont Retirement System to determine vesting.
Military Veterans
Upon retirement, a military veteran is entitled to $15 a year additional benefit for every year or fraction thereof of creditable service, up to a maximum additional benefit of $300.00 per year. To be eligible, a member must be a “veteran” as defined under Massachusetts law.
In addition, eligible veterans have the right to purchase up to four years of military service to add to their creditable service. National Guardsman and Army Reservists who qualify as veterans may also be eligible on a pro-rated 5:1 ratio. Payment of 10% of salary when a member last became a member of a retirement system per year of creditable service purchased is required. No interest is owed on this purchase which must be applied for within 180 days of receipt of notice of eligibility. Members may rollover funds from deferred compensation or tax-deferred plans with no penalties to purchase this time. In addition, installment payment plans are available.
Members who are called to military service and return to their former positions are granted creditable service for this time towards their retirement, subject to certain statutory restrictions.
Call Firefighters and Permanent Intermittent/Reserve Police Officers
A call firefighter or permanent-intermittent/reserve police officer can purchase up to 5 years of retirement credit for the period he or she was on his or her respective list and eligible to be appointed as a permanent police officer or permanent firefighter. With certain exceptions, the service is eligible for purchase only if the member was later appointed as a permanent member of the department in the same town.