A public employee retirement allowance consists of two parts: an annuity and a pension.

  • What is an annuity?

The contributions that are deducted during the course of your creditable service are deposited for you in an annuity savings fund by your retirement board. The interest that accrues on these contributions is credited to your individual account. The part of your retirement allowance that is based on the total amount in your annuity savings account on the date of your retirement is the annuity.

  • What is a pension?

A pension is the difference between the total retirement allowance specified by law and the annuity as described above.

  • What factors effect the amount of my superannuation retirement allowance?

The amount of your retirement allowance depends on:

    • your age,
    • your length of creditable service,
    • the amount of your average annual rate of regular compensation, and
    • your group classification.

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Group Classification

  • How are groups classified within the system?

Groups 1, 2, 3, and 4
Type of occupation, position or duties determine classification. Retirement boards assign employees to one of four specific groups based upon the classifications set out in section three of Chapter 32. If during your career you hold positions that are classified in more than one Group, your retirement calculation will be calculated based upon a formula developed by PERAC which will prorate your service by the amount of time you worked in each group.

    • Group 1 members are officials and general employees including clerical, administrative and technical workers, laborers, mechanics, and all others not otherwise classified.
    • Group 2 includes certain employees with hazardous occupations, such as mental health hospital attendants.
    • Group 3 is made up of state police officers.
    • Group 4 consists of public safety officers, officials, and employees, such as police officers, firefighters, and certain correction officers.
    • NOTE: In order to be classified in either Group 2 or Group 4 for retirement purposes, you must have actively performed the duties of that position for not less than 12 months immediately prior to termination from service or retirement.

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Basic Formula

  • How is a superannuation retirement allowance calculated under the provisions of Chapter 32?

The basic formula for calculating a Superannuation Retirement Allowance is:

Your Benefit Rate
x Your Highest Five Year Average Annual Rate of Regular Compensation
x Your Creditable Service
   -------------------------------
= Retirement Allowance

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Benefit Rate

  • What is my benefit rate?

Your age (as of your last birthday) at retirement and your group classification determine your benefit rate. The benefit rate is a specific percentage of the amount of the average annual rate of regular compensation.

The chart that follows shows the percentages used in the formulas that are specified in Chapter 32 of the Massachusetts General Laws.

NOTE: If you have more than 30 years of creditable service, a slightly different benefit chart will be utilized.

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Benefit Rate Chart for Members With Less Than 30 Years of Creditable Service

PercentGroup 1Group 2Group 4
2.5067 or older62 or older57 or older
2.35666156
2.20656055
2.05645954
1.90635853
1.75625752
1.60615651
1.45605550

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Benefit Rate Chart for Members With At Least 30 Years of Creditable Service

PercentGroup 1Group 2Group 4
2.5067 or older62 or older57 or older
2.375666156
2.250656055
2.125645954
2.0635853
1.875625752
1.750615651
1.625605550


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Average Annual Rate of Regular Compensation

  • Are all forms of compensation received from my employer considered regular compensation for retirement calculation purposes?

No, not all payments are considered regular compensation. Examples of payments not considered to be regular compensation:

    • overtime
    • commissions
    • bonuses, other than cost of living bonuses
    • amounts derived from salary enhancements or salary augmentation plans
    • indirect, in-kind or other payments for such items as housing or lodging, travel, clothing allowances, and annuities
    • welfare benefits
    • lump sum buyouts for Workers' Compensation
    • job-related expense payments
    • automobile usage
    • insurance premiums
    • dependent care assistance
    • one-time lump sum payments in lieu of or for unused vacation or sick leave
    • payment for termination, severance, dismissal
    • any amounts payable as premiums for working holidays (certain employees excepted)
    • early retirement incentives
    • any other payment made as a result of the employer having knowledge of the member's retirement 
    • tuition
    • payments in kind
    • all payments other than payment received by an individual from his employing unit for services rendered to such employing unit, regardless of taxability

The amount of regular compensation that can be considered in calculating a retirement allowance will be 64% of the annual limitation imposed under federal law on the amount of compensation that may be taken into account when calculating benefits under defined benefit plans.  This amount is adjusted by the federal government annually.  PERAC will issue and post an annual Memorandum outlining the limits and explaining the implementation of the limits.

  • Which of my yearly amounts of compensation will be used in the calculation?

The retirement formula specifies that members must average annual rates of regular compensation earned in any five consecutive years of creditable service, or rates earned during the period or periods, whether or not consecutive, which constitute the last five years of creditable service preceding retirement. The law further provides that the benefit must be calculated upon the highest possible average obtainable given those specifications.

If you receive salary or compensation increases in excess of certain statutory limits, the years to be utilized in your calculation may be modified to as to prevent an artificially inflated benefit calculation.

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Creditable Service Record

The third part of the basic formula is the creditable service that you have earned. It must be measured in full years and completed months. In some cases, part-time service will be prorated. Members are urged to check with their retirement boards with respect to regulations governing proration of part-time service. Such regulations vary from board to board.

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Veteran

  • As a veteran, am I entitled to any additional benefits?

If you are a veteran, as defined in section one of Chapter 32, you will receive $15 a year extra for every year or fraction thereof of creditable service, up to a maximum additional benefit of $300 a year.

Purchasing Creditable Service
Veterans may be entitled to purchase up to four years of creditable service for military service rendered before becoming public employees. Please see the section of this guide pertaining to Creditable Service for further details.

  • How is the term ‘Veteran’ defined in the Massachusetts General Laws?

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Definition of a "Veteran"

Pursuant to M.G.L. c. 32, §1, and c. 4, §7, cl.43, you qualify as a veteran if you meet ONE of the following three requirements:

1) You have at least 180 days of regular active duty service and you were honorably discharged or released.

2) You have at least 90 days of active duty service, at least one day of which was during wartime per the chart below, and you were honorably discharged or released.

Era of ServiceDatesRequirement for Veteran Status
WWI6-April-1917
11-November-1918
90 days of active duty service, one (1) day during "wartime" and a last discharge or release under honorable conditions.
Peacetime12-November-1918
15-September-1940
180 days of regular active duty service and a last discharge or release under honorable conditions.
WWII (Merchant Marine: 7-December-1941 through 31-December-1946)16-September-1940
25-July-1947
90 days of active duty service, one (1) day during "wartime" and a last discharge or release under honorable conditions.
Peacetime26-July-1947
24-June-1950
180 days of regular active duty service and a last discharge or release under honorable conditions.
Korea25-June-1950
31-January-1955
90 days of active duty service, one (1) day during "wartime" and a last discharge or release under honorable conditions.
Korean Defense Service Medal28-July-1954 (to be determined later)90 days of active duty service, last discharge under honorable conditions and the Korean Defense Service Medal.
Vietnam I1-February-1955
4-August-1964
180 of regular active duty service and a last discharge or release under honorable conditions.
Vietnam II5-August-1964
7-May-1975
90 days of active duty service, one (1) day during "wartime" and a last discharge or release under honorable conditions.
Peacetime8-May-1975
1-August-1990
180 days of regular active duty service and a last discharge or release under honorable conditions.
Lebanon Campaign*25-August-1982 (to be determined later)90 days of active duty service, one (1) day during "wartime" and a last discharge or release under honorable conditions.
Grenada Campaign*25-October-1983
15-December-1983
90 days of active duty service, one (1) day during "wartime" and a last discharge or release under honorable conditions.
Panama Campaign*20-December-1989
31-January-1990
90 days of active duty service, one (1) day during "wartime" and a last discharge or release under honorable conditions.
Persian Gulf2-August-1990 (to be determined later)90 days of active duty service, one (1) day during "wartime" and a last discharge or release under honorable conditions.

*Naval and Marine DD214 must indicate Expeditionary Medal. All DD214s must specify campaign: Lebanon, Grenada and Panama.

Please note that, pursuant to M.G.L. c. 4, §7, cl.43, the six months of active duty for training in the Active Reserves and the National Guard does not qualify as active service toward the minimum period listed here. If your only active duty was active duty training, you are not eligible to purchase credit for your military service.

3) You served in wartime and were awarded a Purple Heart or service-connected disability, regardless of whether you completed the minimum length of active duty service in the chart under (2) above. A person who has died in wartime service will also qualify as a veteran even if the minimum service requirements are not met.

Exceptions to Minimum Service Requirement
It is not necessary that an applicant have completed the minimum service for wartime or peacetime campaign if he or she served some time in the campaign and was awarded the Purple Heart, or suffered a service-connected disability, or died in the service under honorable conditions.

Training Not Considered Active Service
Active service in the armed forces as used in this clause shall not include active duty for training in the Army or Air National Guard or active duty for training as a Reservist in the Armed Forces of the United States.

Creditable Service for Active Reserve and National Guard Service
Veterans who also have Active Reserve and National Guard Service may receive creditable service for such guard/reserve service on a ratio of five years of such service to equal one year of creditable service, provided they have the qualifications noted above.

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