Appendix: Retirement Allowance Options

A summary of the three options that determine how retirement benefits are paid.

Table of Contents

Overview

At retirement, state employees choose one of three options that determine how retirement benefits are paid. If no option is selected, Chapter 32 of the Massachusetts General Laws states that the member defaults to Option B.

Retirement allowances are paid monthly. The payment amount depends on the option selected. The option also determines what benefits, if any, will be paid to survivors. The options are as follows:

  • Option A: Members receive their full retirement benefit in monthly payments during their lifetime. All benefit payments cease upon their death, and no benefits are provided for their survivors.
  • Option B: Members receive a lifetime benefit that is approximately 1% to 5% less per month than Option A. The annuity portion (member contributions) of their benefits is reduced to allow for a potential benefit for their beneficiaries. Upon a member’s death, surviving beneficiaries are paid the unexpended balance of the accumulated total contributions.
  • Option C: Members receive a lifetime benefit that is approximately 7% to 15% less per month than Option A. Upon a member’s death, the designated beneficiary is paid a monthly benefit for the remainder of his or her lifetime.
Date published: January 6, 2021
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