TWO PARTS

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

What is an annuity?

• 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. That 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?

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

FACTORS

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.

GROUP CLASSIFICATION

How are groups classified within the system?

• Groups 1, 2, 3, and 4
  Type of occupation, position or duties determines classification. Retirement boards assign employees to one of four specific groups based upon the classifications set out in section three of Chapter 32.
  •   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 ambulance attendants, licensed electricians, and 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.

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 Three Year Average Annual Rate of Regular Compensation x Your Creditable Service = Retirement Allowance

BENEFIT RATE

What is my benefit rate?

• Specific Percentages
  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.

Are there special provisions pertaining to Group 4 members who terminate their public service prior to their forty-fifth birthday?

• Provisions for Group 4 Members
  The retirement allowance of a Group 4 member, with at least 20 years of creditable service, whose termination from service and whose retirement allowance both become effective before age 45 is computed by using the percent for age 45 for Group 4 members that is contained in the following chart, with one tenth of one percent subtracted for each year that the age at the member’s last birthday is under age 45.
  
  The retirement allowance of a Group 4 member, with at least 20 years of creditable service, who terminates service before age 45 and whose retirement allowance becomes effective after age 45 is computed as if the member were classified in Group 1, unless the member defers retirement until after age 55. If the member does defer retirement until after age 55, he or she would retire under the provisions of section five of Chapter 32 and his/her retirement age would be computed using the percent for the member’s age at retirement for a Group 4 member as shown on the following chart.

BENEFIT RATE CHART

AVERAGE ANNUAL RATE OF REGULAR COMPENSATION

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

• Payments Not Considered Regular Compensation
  Certain payments including:
  •   bonuses,
  
  •   overtime,
  
  •   severance pay,
  
  •   any and all unused sick leave, or
  
  •   any other payments made as a result of giving notice of retirement
  are not considered part of a member’s regular compensation and are not included in retirement calculations.

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

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

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.

VETERAN

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

• 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 creditable service for military service rendered before becoming public employees or while on leave from public service. 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?

• Definition
  To be a “veteran” under Massachusetts law a person is required to have either:
  •   180 days of regular active duty service and a last discharge or release under honorable conditions
  
  or
  
  •   90 days of active duty service, one (1) day of which is during “wartime” per the chart below, and a last discharge or release under honorable conditions.

For Guard Members to qualify they must have
•   180 days and have been activated under Title 10 of the U.S. Code

or

•   Members who were activated under Title 10 or Title 32 of the US Code or Massachusetts General Laws, chapter 33, sections 38, 40, and 41 must have 90 days, at least one of which was during wartime, per the preceding chart. The member’s last discharge or release must be under honorable conditions.

• Exceptions to Minimum Service Requirement
  It is not necessary that an applicant have completed the minimum service for wartime or peacetime campaign if he/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 Massachusetts National Guard
  Veterans who also have Active Reserve and Massachusetts 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.