Contribution Rates
Employees contribute a percentage of their regular compensation to the retirement system. A member’s contribution rate is set by statute and determined by his or her most recent membership date.
Membership Date
Prior to January 1, 1978
January 1, 1975 to December 31, 1978
January 1, 1979 to December 31, 1983
January 1, 1984 to June 30, 1996
As of July 1, 1996
As of April 2, 2012
Contribution Rate
5%
7%
7% plus additional 2% of compensation in excess of $30,000
8% plus additional 2% of compensation in excess of $30,000
9% plus additional 2% of compensation in excess of $30,000
9% plus additional 2% of compensation in excess of $30,000.
Members in Group 1 with 30 years of creditable service will have their contribution rate decreased to 6% plus and additional 2% if compensation in excess of $30,000.
Members’ contributions will be taken by GLSD from their regular compensation on a weekly basis as determined by their pay period.
Member Self-Serve Portal
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
- Payments for rendering instructional training,
- on call or standby pay,
- Regular compensation generally excludes:
- Amounts paid for hours worked beyond the member’s normal work schedule (i.e., 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 (i.e., 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.
- For those members establishing or re-establishing membership after January 1, 2011, the maximum amount of pensionable earnings that will be used in determining a member’s final average salary is 64% of the federal earnings limitation codified in section 401(a)(17) of the Internal Revenue Code. In 2021, the limit is $290,000. Accordingly, the maximum amount of pensionable earnings for members entering the system after January 1, 2011, is $185,600 (64% of $290,000), with a maximum retirement benefit of $148,480 (80% of $185,600).
Separation of Service Prior to Retirement
Members who leave their job prior to retirement may be eligible to receive a refund of their annuity savings account. Members will receive a return of their accumulated total deductions plus accrued statutory interest provided they are not subject to pension forfeiture provisions due to a criminal conviction, or charged with misappropriation of funds.
Members who voluntarily terminate public service with at least ten years of creditable service will receive 100% of the regular interest that has accrued in their annuity savings account. Likewise, members who are involuntarily terminated will receive 100% of the regular interest that has accrued.
Members who have accrued less than ten years of creditable service will receive interest at the rate of 3% on their accumulated total deductions.
Please note that members who apply for a refund more than two years after the date of termination of service will receive only the interest accumulated during the two years immediately following termination of service.
Members may not request a refund if:
- they are already retired,
- they continue to be an active member of any Massachusetts contributory retirement system,
- they are on an official leave of absence,
- they are receiving workers’ compensation benefits
- they are seeking to be restored to their position, or
- they are accepting a position in the service of the Commonwealth or a political subdivision governed by G.L. c. 32.
Termination of Membership
A refund of a member’s total accumulated deductions terminates a member’s rights in the retirement system. Members who later re-enter the retirement system will be considered new members and will be subject to any benefit changes in effect at the time of their re-employment.
A member with ten or more years of creditable service is vested and potentially eligible for a retirement allowance. By taking a withdrawal of their accumulated total deductions, they will lose any right to this retirement allowance.
Members who redeposit a refund and again become employed and active members must generally remain in active service for at least two consecutive years in order to retire.
Tax Implications
Taking a refund of total accumulated deductions may subject members to certain tax consequences. A member’s annuity savings account is comprised of non-taxable and taxable portions. The non-taxable portion is equal to contributions made prior to January 12, 1988, plus any payments that were made to buy back previous creditable service. The taxable portion of the account is equal to the contributions that were made on or after January 12, 1988, plus accrued interest.
When processing a refund, staff will withhold 20% of the taxable contributions and interest for federal tax withholding if payment is made directly to the member. To defer tax withholding, members may directly rollover their funds into another tax deferred vehicle such as an Individual Retirement Account (IRA). In some cases, the IRS may apply a 10% early withdrawal penalty. Members are encouraged to consult an attorney or tax professional prior to withdrawing their funds.
Death Before Retirement
There are several types of survivor benefits available to members of Massachusetts contributory retirement systems. The benefit types and benefit amounts that are payable depend on a number of factors, including:
creditable service, salary, cause of death, and date of death. The types of survivor benefits available include benefits based on a member’s retirement option selection, benefits for members in service who die prior to retirement benefits for accidental disability retirees, and benefits for certain public safety officials who are killed in the line of duty.
If an active member is killed in the line of duty or dies as a result of injuries sustained while in the performance of duties, then the member’s dependents are entitled to statutory benefits under various sections of the public employee retirement law. Please see below for more information on Accidental Death Benefits and Survivor Benefits for Public Safety Officials Killed in the Line of Duty.
However, if the active member’s death is not job related, there are two different types of survivor benefits available. Only one will be paid out.
Option 1: One-Time Lump Sum Payment
The first option is to name a beneficiary or beneficiaries to receive a lump-sum payment of the accumulated total deductions in the member’s annuity savings account in the proportions designated on the Beneficiary Selection Form – Lump Sum. A person or an entity may be named as a beneficiary.
Option 2: Member Survivor Allowance—Option D
Option D provides a named beneficiary with the monthly retirement allowance that a member would have received under Option C had the member retired on the date of death. If the member is under age 55 at death, the member’s age will be “bumped up” to 55 to calculate the allowance. For members joining the system after April 2, 2012, the age is 60. If over 55 (or 60 for newer members), the calculation factor for the member’s actual age at death is used.
A member can designate an Option D beneficiary at anytime by completing the Beneficiary Selection Form – Option D Monthly Benefit available on our website. Only one Option D beneficiary may be named, and only a spouse, child, former spouse who has not remarried, mother, father, brother or sister is eligible for designation. Unless superseded by a spousal election, discussed below, a nominated Option D beneficiary must receive the allowance.
Surviving Spouses. If a member does not make an Option D designation, the member’s spouse can still elect to receive the Option D allowance or can request a return of the member’s accumulated retirement deductions, if (1) the member has completed at least two years of creditable service; (2) the member and spouse have been married for at least one year; and (3) the member and spouse have been living together at the time of the member’s death.
If the member and spouse were not living together at the time of death, the Board must find that they were living apart for justifiable cause, other than desertion or moral turpitude on the part of the spouse.
The rights of an eligible surviving spouse will always supersede any other person nominated as the Option D beneficiary. The retirement board will notify the member’s spouse of his or her right to elect Option D benefits and the member’s eligible spouse has 90 days from the date of this notice to elect Option D benefits. However, if the member’s spouse is named by the member as the Option D beneficiary, the spouse must receive the monthly allowance, and may not choose between the allowance and a one-time return of the member’s accumulated deductions.
Dependent Children. When a Member-Survivor Option D allowance is paid, another statute provides an additional allowance to the member’s minor children of $120.00 per month to the oldest child, and $90.00 per month to each additional child. These benefits end upon adoption or marriage, or upon reaching age 18, or age 22 if a full-time student. Benefits to children will not end if the child is physically or mentally incapacitated from earning on the member’s date of death. If the member has no spouse, the member’s children can, in some circumstances, receive the benefits a spouse would have received, along with the additional allowance described above.
A Member-Survivor Option D allowance may also be available to a beneficiary of an inactive member. However, no benefit for children is available.
If a member has not named another individual as an Option D beneficiary, the member’s accumulated deductions will be paid to the beneficiary designated on the Beneficiary Selection Form. If there are none, these funds will be paid to the spouse in one sum.
Accidental Death Benefits
The retirement plan provides benefits to an eligible beneficiary of a member who dies as the result of a personal injury sustained, or a hazard undergone as a result of, and while in the performance of duties. Further, there must be no serious and willful misconduct on the member’s part. The member’s injury must be sustained while a member-in-service.
Generally, benefits to an eligible beneficiary consist of a lump-sum payment of the member’s accumulated deductions and a pension equal to 72% of the annual rate of regular compensation on the date of injury, or the average annual rate of regular compensation for the 12 month period immediately preceding the date of death, whichever is greater. There is also a benefit for eligible dependent children.
The primary beneficiary of an accidental death pension is the member’s surviving spouse. If there is no surviving spouse, dependent children may be eligible for pension payments for a limited period of time. Specifically, as long as they are unmarried and under the age of 18, they are physically or mentally incapacitated from earning regardless of age, or they are under the age of 22 and are a full-time student at an accredited educational institution.