The federal government requires that every employee contribute to some form of retirement savings plan.
Massachusetts State Retirement System
All benefited employees contribute to the Massachusetts State Employees’ Retirement System (SERS). Click this link to estimate retirement benefits.
Optional Retirement Program
Some benefited employees (i.e., full-time faculty and certain senior administrators) have the option to contribute to an Optional Retirement Program.
Omnibus Reconciliation Act of 1990 (OBRA)
Non-benefited employees contribute to OBRA, which is administered by Great West Retirement Services
Social Security Administration
In addition, employees may have also contributed to Social Security. To find out about how your contributions to Social Security affect your retirement contributions and pension, contact your local Social Security Administration office
(1-800-772-1213) and/or check the Social Security Web site.
Massachusetts State Retirement Plan
All full-time and at least 50% part-time employees hired prior to attaining age 65 must participate in the Massachusetts State Retirement Plan. The percentage rate of contribution is determined by an employee's most recent entry date into the system. This is a pre-tax contribution.
- Employees hired after July 1, 1996 will contribute 9% of base salary.
- Employees hired after January 1, 1979 will pay their regular contribution rate plus an additional 2% of their regular salary above $30,000.00 annually or $576.92 weekly.
The plan provides retirement benefits based on three factors:
- age at retirement
- years of credible service
- the average of the highest three (3) consecutive years of base salary; if you become a member before April 2, 2012 or the average of the highest five (5) consecutive years of base salary if you become a member on or after April 2, 2012.
Vesting and Eligibility
Being vested means you are eligible to receive a retirement allowance. You are vested in the State system if you have at least ten years of full-time service. To be eligible to retire, you need to meet one of the following conditions;
- You entered service before April 2, 2012 and have 20 years of full-time service at any age, or
- You entered state service before April 2, 2012 and you attain the age of 55 with ten (10) years of creditable service, or
- You entered state service on or after April 2, 2012 and you attain the age of 60 if retiring from Group 1, with ten years of creditable service.
If you leave state service after you are vested, you may leave your retirement contributions in the system and receive a state pension once you meet the minimum age requirement.
Social Security and state employees
Employees of the Commonwealth of Massachusetts are exempt from contributing to Social Security. Consequently, state service cannot be credited toward the quarters needed to qualify an individual for a Social Security pension. However, in April 1986, President Ronald Reagan signed the Consolidated Omnibus Budget and Reconciliation Act (COBRA), which mandates that all state and local government employees hired on or after April 1, 1986 are required to pay the Medicare portion of the social security tax. This tax is 1.45% of the first $125,000 of a person's wage or salary. The Commonwealth is also required to match the employee's contributions.
Note: Benefits under the State Retirement Plan can possibly offset social security benefits in a variety of circumstances. Detailed information can be obtained at any local Social Security office.
Faculty receiving credit for prior teaching
One of the most unusual but highly beneficial features of the State Retirement Plan is that, under certain circumstances, a faculty member may "buy into" the system for certain periods (up to 10 years) of creditable service in another state. In general, the stipulation is that prior service must be as a teacher in a publicly-supported educational institution (i.e., city, town or state) and must be matched by at least an equal number of years of creditable service at the university of Massachusetts prior to age 65.
The cost of such a "buy-in" would be 5%, 7%, 8% or 9% of the gross salary at the other institution plus interest to the date of purchase into the Massachusetts Retirement Plan. The percent one pays for this "buy-in" would be the same percent that is deducted from the faculty member's weekly paycheck at the university of Massachusetts. The total cost can be paid either by one lump sum or by payroll deductions, which can be spread over a period of up to five years.
Leaving the system before age 65
An employee who has 10 or more years of creditable service in the Massachusetts Retirement Plan and who, before attaining age 55, resigns or voluntarily terminates his or her employment and leaves the accumulated total deductions in the annuity savings fund of the retirement system, shall have the right, upon reaching age 55 and prior to reaching compulsory age, to apply for and receive a retirement allowance based on his or her age, service and salary.
If an employee leaves the service of the Commonwealth prior to age 55, he or she may withdraw the money contributed to the retirement system or transfer the funds to another qualified account. Funds that are withdrawn are subject to federal tax withholding of 20%.
If you have less that five (5) years of creditable service and you voluntarily terminate service, you will receive no interest credited to your total deductions. If you have five (5) years, but less than 10 years of creditable service and you voluntarily terminate service, you will receive 50% of the interest credited to your total deductions. If you have 10 or more years of creditable service, or if you were involuntarily terminated from service, you will receive 100% of the interest credited to your total deductions.
Forms to file for retirement may be obtained from:
State Board of Retirement
One Winter St, 8th floor
Boston, MA 02108
Forms to withdraw or transfer accumulated deductions upon termination of employment with the Commonwealth may be obtained in the Human Resources Office, 3rd floor, Quinn Administration Building.