NOTE: Termination retirement is available only for members with effective membership dates before April 2, 2012. As a result of "Pension Reform III" (Ch. 176 of the Acts of 2011), the termination retirement formula was eliminated for members who joined a Massachusetts contributory retirement system on or after April 2, 2012.
If you are involuntarily terminated, the MTRS provides a termination retirement allowance ( M.G.L. c.32, section 10(2) ). The eligibility criteria and benefit calculation formula are different from those for a superannuation retirement allowance.

What are the eligibility criteria for the termination retirement benefit?

  • Your effective membership date must be before April 2, 2012;
  • You must have at least 20 years of creditable service;
  • Your position must have been eliminated, or you failed to be re-appointed to your position;
  • Your separation from service must be completely involuntary, and must not be due to moral turpitude or a violation of work rules;
  • You may not have refused an offer of a comparable position in which you are certified.

What if my position is eliminated, or I am terminated but I do not meet the eligibility criteria for a termination retirement allowance?

If your effective membership date is before April 2, 2012, and you have at least ten years of creditable service, you may leave your funds on account and apply for a superannuation (regular) retirement benefit upon attaining age 55 or any time thereafter. Alternatively, you  withdraw your funds from the MTRS at any time, subject to the interest limits.

Please note that pursuant to M.G.L. c. 32, § 15, any member who is convicted of a crime involving the laws applicable to his or her position, shall not be entitled to a retirement allowance.  Rather, such member will receive a lump-sum refund of his or her contributions to the MTRS, with no interest.

How is the amount of a termination allowance calculated?

The termination retirement allowance is equal to one-third of the average of your three highest consecutive years’ salaries, plus an annuity amount that is based on your age and account balance at retirement (see below).

What is the difference between regular (“superannuation”) retirement and termination retirement?

Superannuation retirement and termination retirement differ as far as their eligibility criteria as well as the formula used to calculate the Option A benefit amount. However, once the termination allowance under Option A is calculated, the termination allowances under Options B and C are determined in the same way as for a superannuation allowance.

How do I apply for a termination retirement allowance?

  • As soon as possible after you receive formal notice of termination from your school district, contact us for a retirement application.
  • As soon as possible—and, if you want your retirement to become effective on your date of termination, no later than 60 days after your effective date of termination—file your completed application with our office. For example, if your effective date of termination is June 30, you must file your application with our office no later than August 29 in order to have an effective date of retirement of June 30. If your retirement application is received after 60 days from your effective date of termination, the earliest you could retire, by law, would be 15 days from the date that we receive your retirement application.
  • After we have received your completed application, we will contact your school district for written verification of your statement and determine your eligibility. If you are eligible, we will then send you additional information on the benefits you are entitled to.

A word of caution

Please be advised that once your termination retirement allowance becomes effective, you may not return to active membership service as a teacher. Specifically, if your name should appear on a recall list after the approval of your termination retirement allowance, you may not be able to “un-retire” and elect to take a teaching position if one is offered to you. “Un-retirement” can only be accomplished through Section 105 of the retirement law, which requires, among other things, repayment of all the retirement allowance you received, plus interest.

For more information, please see working after retirement. Additionally, if you are recalled prior to our approval of your application for a termination retirement allowance, you must immediately notify the MTRS, as you would not be eligible to retire under this formula. For these reasons, consider your options carefully. If you have any questions, please contact us.

Termination retirement allowance: Formula and worksheet

The example illustrates the calculations for a 45-year old member whose effective membership date is prior to April 2, 2012, who is a non-veteran, and who, at the time of termination, has a salary average of $55,000 for his or her highest three consecutive years, an MTRS annuity savings account balance of $60,000, and a beneficiary who is age 44.

Also shown here is the member-survivor benefit payable only under Option C. This benefit is payable on a monthly basis to your beneficiary for the rest of his or her life.

Option A allowance
3-year salary average$55,000
x 1/3x 1/3
Pension portion$18,150
+ Annuity portion
The annuity portion is calculated based on your age and the balance in your MTRS annuity savings account. In general, the annual annuity portion for members with approximately 20 years of creditable service ranges from $3,000 to $6,000. Your actual figure will vary.
+ $4,558
Option A annual allowance
Note: If you are a wartime veteran, $15 for each year of teaching service (up to a maximum of $300) is added to the Option A annual allowance.
Option B allowance
Option A annual allowance (see above)$22,708
x 99% (approximately 1% less than Option A)x 99%
Option B annual allowance$22,480
Option C allowance and survivor benefit
Option A annual allowance (see above)$22,708
x Option C Factor (see Option C Factor Table pdf format of Option C Factor Table
)x 0.9616
Option C annual allowance$21,836
x 2/3 (allowed survivor portion)x 2/3
Annual member-survivor benefit$14,557

A note about this formula

The formula for estimating termination retirement allowances under Options A, B and C is also used in another situation. If your effective membership date is prior to April 2, 2012, and, at the time you apply for regular retirement you have 30 years of creditable service, we will automatically calculate your retirement benefits under this formula as well as under the regular retirement formula. Whichever formula results in the greater Option A amount is the one we will use to provide you with your estimated retirement allowance figures.