PERAC Memos

PERAC has set the regular interest rate for 2026 at 0.1% per G.L. c. 32, § 22(6)(b), based on the average rates paid on individual savings accounts at a representative sample of at least 10 financial institutions. This rate applies to accumulated total deductions and accrued interest for refunds and retirements processed during calendar year 2026, and will also be credited on December 31, 2026 for outstanding balances as of December 31, 2025.

2026-01-07

This memo addresses a specific anti-spiking calculation scenario for union members subject to both G.L. c. 32, § 106 (vacation buyback) and collectively bargained salary schedules. Collectively bargained increases are exempt from the anti-spiking rules under § 5(2)(f), but vacation buybacks are not. PERAC provides a step-by-step worked example showing how to separate these components: first calculate allowable regular compensation excluding collectively bargained increases, then add them back. Any previously retired member whose pay spiked due to a vacation buyback should have their compensation reviewed under this guidance. PERAC is offering virtual sessions on request.

2026-01-09

PERAC announces the 2026 federal limits that apply to Massachusetts retirement system members under Chapter 46 of the Acts of 2002, which brought state law into compliance with IRC requirements. The 2026 Section 401(a)(17) compensation limit is $360,000, and the Section 415 benefit limit is $290,000 per year for members retiring at age 65 (reduced for those retiring before 62). These limits are indexed annually and affect only the highest-paid employees; most members are unaffected.

2026-01-09

For members who joined a Massachusetts retirement system after January 1, 2011 (Tier 2 members), regular compensation used in benefit calculations is capped at 64% of the federal IRC § 401(a)(17) limit. With the 2026 federal limit set at $360,000, the 2026 Massachusetts cap for post-2011 members is $230,400. Boards must apply this limit when calculating retirement allowances for affected members.

2026-01-09

PERAC has announced the 2026 COLA rate of 2.8%, based on the Social Security Administration's CPI-W increase for the prior year. Pursuant to G.L. c. 32, § 103(c), retirement boards may vote to grant a COLA effective July 1, 2026. Under § 103(i), a board may vote to increase the COLA up to 3.0% with proper notice to the legislative body, but this must occur before June 30, 2026. Every board must notify PERAC through PROSPER within 30 days of their decision, whether or not they grant a COLA.

2026-01-12

At its December 17, 2025 meeting, the Commission voted to continue the existing practice of allowing PERAC staff to approve non-invasive medical test reimbursements up to $100.00 per disability case, per 840 CMR 10:10(3) and 10:15(1)(c). Any tests ordered by a Regional Medical Panel that exceed this amount still require advance Commission approval before being ordered. This annual notice confirms no change to the $100 threshold for 2026.

2026-01-13

Members born on or after January 1, 1951 who are not yet receiving a retirement allowance and are not actively employed by a sponsoring governmental unit must begin taking required minimum distributions (RMDs) by April 1 of the year after they turn 73, per the SECURE 2.0 Act. Boards should promptly send notices to members who turned 73 in calendar year 2025, as their initial distribution deadline is April 1, 2026. A sample notice letter is attached. Boards should urge members to contact the board for counseling given the complexity of rollover rules.

2026-01-14

PERAC is alerting boards to a fraud attempt where a bad actor used stolen personal information (name, date of birth, last four of SSN) to create a self-service portal account for a retiree and then requested a direct deposit change. The attempt was thwarted when the board independently contacted the retiree to confirm the request, which the retiree denied. Boards should review their security procedures, including: requiring matching email/phone on file to create portal accounts, fully hiding bank account numbers on deposit notices, reviewing IT quarantine procedures, and periodically auditing new portal account creation.

2026-01-20

PERAC has distributed updated 2026 buyback/make-up repayment worksheets and cumulative interest factor sheets. The worksheets apply to buybacks under numerous specific sections of G.L. c. 32, with separate worksheets for buyback interest and actuarial interest. Sections 4(1)(g½), 4(1)(l), 4(1)(l½), 4(1)(l¾), 4(1)(n), 4(1)(n½), 4(1)(p), 4(1)(r), 4(1)(s), and 4(2)(c) use buyback interest exclusively; sections 3(3), 3(4), 3(4A), 3(5), 3(6)(d), and 3(8)(b) may use either rate as described in Memo #23/2012. These worksheets are not applicable to § 3(6)(c) buybacks.

2026-01-27

PERAC is requesting boards submit actuarial data for active members, retirees/survivors, and disability retirees as of December 31, 2025, by March 31, 2026 via the PROSPER portal in standard PERAC record format. Boards scheduled for a 2026 actuarial valuation by PERAC should already have received a separate request. After submission, boards will receive data analysis reports through PROSPER identifying errors and questionable items requiring review or correction.

2026-02-03

Pre-employment physicals are a required prerequisite to granting accidental disability retirement under any of the three statutory presumptions (G.L. c. 32, §§ 94, 94A, 94B). While HIPAA prevents boards from requiring employers to submit these records at the time of hire, PERAC strongly encourages boards to provide an optional HIPAA waiver to all new and current members that would allow the board to obtain a copy for future use. This waiver should be developed with board counsel and can be distributed as part of onboarding materials. If no physical can be found, members should be encouraged to supply any physicals taken after entering service.

2026-03-04

Following the legislative changes made by Chapter 73 of the Acts of 2025 (described in Memo #33/2025), PERAC has updated four disability forms to reflect the revised definition of "Violent Act Injury": the Member's Application for Disability Retirement, the Physician's Statement, the Employer's Statement, and the Regional Medical Panel Certificates. This memo supersedes Memo #15/2025 on form updates. Boards must use these new forms going forward; the underlying processing guidance from Memos #28/2024 and #33/2025 has not changed.

2026-03-10

PERAC has issued an updated Tobacco Company List effective April 2026, replacing all prior versions. Under Chapter 119 of the Acts of 1997, retirement systems may not make new investments in companies deriving more than 15% of revenue from tobacco sales. Boards must forward the list to investment advisors (noting it is for Massachusetts public fund clients only) and must divest any non-compliant holdings prudently after consulting with PERAC. PERAC audits portfolios for compliance. Compared to the January 2026 list, the April 2026 list removes Starfleet Innotec Inc from U.S. companies.

2026-03-17

PERAC's Q2 2026 training memo lists educational opportunities from April through June 2026 for retirement board members, including PERAC webinars on Recent Cases of Interest (April 30) and History of Call Fire and PIPOs (May 12), the NCPERS Annual Conference in Las Vegas (May 17–20), and the MACRS Spring Conference in Springfield, MA (May 31–June 3) offering up to 9 credits. Board members must register via PROSPER and submit Training Affidavits for non-PERAC sessions. Note: the MACRS Spring Conference location has changed to Springfield this year.

2026-03-26

PERAC has filed proposed amendments to 840 CMR 6.00 (Standard Rules for Disclosure of Information) to align the regulations with the Public Records Law and Fair Information Practices Act. Key changes include: deleting 840 CMR 6.05 (Notice to PERAC); amending 840 CMR 6.08 to require written member consent before a retirement file may be provided to that member's employer; and renaming 840 CMR 6.13 to direct boards seeking public records guidance to contact the Public Records Division directly rather than requesting a formal advisory opinion. A remote hearing is scheduled for May 21, 2026 at 10 a.m.; written comments accepted through May 22, 2026 at 5 p.m.

2026-04-02