compliance

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

PERAC has issued an updated Tobacco Company List dated October 2025, which replaces all previously distributed lists and is effective upon receipt. Under Chapter 119 of the Acts of 1997, retirement systems are prohibited from making new investments in stocks, securities, or other obligations of any company that derives more than 15% of its revenue from tobacco products. Boards must forward the list to their investment advisors and note that the list is strictly for Massachusetts public fund clients only. PERAC will review portfolios for compliance during audits and any non-compliant holdings must be divested in a prudent manner after consulting with PERAC.

PERAC's 4th Quarter 2025 training memo reminds retirement board members of their statutory obligation under Chapter 32 to complete 18 credits over their term and at least 3 credits per year. The memo lists live webinars, on-demand online courses, and conferences scheduled from October through December 2025, including the MACRS Fall Conference in Springfield (December 7–10) offering up to 9 credits. Board members must use PROSPER to register and submit Training Affidavits for non-PERAC-sponsored sessions; the next New Administrator Training is November 5, 2025 in Danvers.

PERAC clarifies that COLAs under G.L. c. 32, § 103(c) must be applied to Section 100 benefits paid to survivors of public safety employees killed in the line of duty. Section 100 benefits are classified as a "pension" under the statute, making them subject to COLA grants by retirement boards. Any board that has not been applying COLAs to Section 100 benefits must correct this error immediately, recalculate any unpaid COLA amounts owed to beneficiaries, and remit payment with corrections-of-errors interest going forward.

PERAC's annual pension fraud awareness campaign is underway with the theme "See Something Fishy?" Boards are asked to display the enclosed posters and brochures prominently in their offices. The PERAC fraud hotline is 1-800-445-3266 and the email is pensionfraud@mass.gov; digital materials for social media use will be emailed separately. County and regional systems will receive additional materials to distribute to associated governmental units.

This memo supplements Memo #28/2025 on Section 100 benefits and COLAs. It clarifies two key points: first, COLAs are not "benefits" themselves but enhancements to an existing pension, so the Section 100 "alternative benefit" language does not bar COLA eligibility. Second, when calculating back COLA payments owed to Section 100 beneficiaries, boards need only go back to July 1, 1998 — prior to that date, the pre-1997 version of Section 102(a) provided for the greater of a COLA or a Section 100 increase but not both, so COLAs would have been the smaller amount.

PERAC has issued updated lists of public employees ineligible to join a Chapter 32 retirement system due to forfeiture under G.L. c. 32, § 15 — typically resulting from misappropriation of funds or conviction of certain crimes. Boards must review the attached alphabetical and board-sorted lists against their active membership. Any match must be reported to PERAC's Doreen Duane with the member's full name and last four digits of SSN for confirmation before any action is taken.

Free cybersecurity awareness training is again available in 2026 for retirement board administrators and staff through EOTSS's Cybersecurity Awareness Program. Boards must designate a local coordinator, and participants must have an email tied to the board's domain (not Gmail or Yahoo). Two informational webinars are scheduled: November 18 at 10 a.m. and December 15 at 2 p.m. Applications are reviewed on a rolling basis until licenses are exhausted — boards should apply promptly.

Chapter 73 of the Acts of 2025, effective November 25, 2025, made two significant changes to the Violent Act Injury disability benefit: it revised the definition of "Violent Act Injury" in G.L. c. 32, § 1 (removing the alternative "life altering" standard and narrowing weapon language), and it extended eligibility to Massachusetts State Police officers via new G.L. c. 32, § 26(2½). The new provisions apply to any member not yet approved for disability as of November 25, 2025. PERAC is updating affected disability forms and will issue a new memo superseding Memo #15/2025 once complete.

PERAC is proposing a new subsection to 840 CMR 28.00 (Electronic Signatures) that would waive the witness signature requirement for forms submitted electronically, provided a security procedure as defined in 840 CMR 28.02 is in place. This directly affects forms such as the Beneficiary Selection Form for Refund of Accumulated Deductions. A public hearing is scheduled for January 7, 2026 at 10 a.m. via remote access; written comments are accepted through January 9, 2026 at 5 p.m.

PERAC's Q1 2026 training memo outlines live webinars, on-demand training, and conferences available January through March 2026 for retirement board members to meet their Chapter 32 educational credit requirements (18 over a term, minimum 3 per year). The next New Administrator Training is March 3, 2026 in Norwood, MA. Board members must use PROSPER to register and submit Training Affidavits for non-PERAC sessions; Conflict of Interest training certificates are now required every two years through the State Ethics Commission online portal.

PERAC has issued the updated Tobacco Company List effective January 2026, replacing all prior versions. Under Chapter 119 of the Acts of 1997, retirement systems are prohibited from making new investments in companies that derive more than 15% of revenue from tobacco sales. Boards must forward this list to their investment advisors immediately, noting it is for Massachusetts public fund clients only. PERAC will audit portfolios for compliance; non-compliant holdings must be divested prudently after consulting with PERAC.

PERAC announces the 2019 federal limits applicable to Massachusetts retirement system members under Chapter 46 of the Acts of 2002, which brought state law into compliance with IRC requirements. The 2019 Section 401(a)(17) compensation limit is $280,000, and the Section 415 benefit limit is $225,000 per year for members retiring at age 65 (generally reduced for retirement before age 62). These limits are indexed annually and affect only the highest-paid employees; most members are unaffected.

PERAC announces the 2019 regular compensation limit for members who joined a retirement system after January 1, 2011. Under Section 23 of Chapter 131 of the Acts of 2010, regular compensation for these members is capped at 64% of the federal 401(a)(17) limit. Since the 2019 federal limit is $280,000 (per PERAC Memo #3/2019), the 2019 limit for post-2011 members is $179,200.

PERAC issues expanded administrative reminders covering asset management and a wide variety of retirement board activities. Key topics include: Section 23B contract expiration (April 2019 marks the seven-year term limit for many existing service provider relationships, requiring new searches); cash book submission requirements (complete packages including Trial Balances and Adjusting Journal Entries due within four weeks of month-end); monthly financial reporting to the board; vendor selection and RFP compliance under Section 23B; child support enforcement obligations before releasing accumulated deductions; management fee disclosure and accounting on Schedule 7; board meeting minutes requirements under the Open Meeting Law; executive session minutes handling; and the correct interest rate to use for refunds involving members who transferred from another system.

PERAC and the Department of Industrial Accidents (DIA) conduct an annual data match of the PERAC disability retiree database against the DIA database. Retirement boards will now receive their members' results from this match through PROSPER under Members/DIA. The report will be generated annually; boards without matches will not receive a report. Boards should follow up with their employer's Workers' Compensation Agent for any matched members whose workers' compensation status is unknown, to ensure that offsets required by G.L. c. 32, §14 are implemented promptly.

PERAC provides an updated list of public employees who are no longer statutorily eligible to join a Chapter 32 retirement system, pursuant to G.L. c. 32, §15. Under that section, members charged with misappropriation of funds, convicted of offenses related to governmental funds, or convicted of certain enumerated crimes may lose their right to a retirement allowance and/or accumulated total deductions. Newly added individuals appear in bold on the attached list. Boards with any of the forfeited members still active in their system should contact Kim Boisvert at 617-666-4446, ext. 906 with the last four digits of the member's Social Security number for verification.

PERAC announces that Chapter 439 of the Acts of 2018, enacted January 10, 2019, amended G.L. c. 32, §20(7) to allow retirement board members to petition PERAC for a waiver of annual training credit requirements due to extenuating circumstances, provided they complete the required 18 total credits during their term. The Commission's Application for a Waiver of Education Restrictions form is enclosed and available on the PERAC website at the Compliance & Investments Forms page.

PERAC announces a revised audit approach approved by the Commission on April 10, 2019, targeting high-risk areas and avoiding duplication with private audits. Following national trends, PERAC will tailor audits based on each system's risk level and will increasingly accept private audit work in lieu of segments of the PERAC audit — a practice authorized by law and regulation but previously underutilized. Risk factors include staff stability, prior audit findings, asset management practices, ongoing compliance, and timely filing of accounting information. Retirement boards are encouraged to retain private auditors for annual reviews. PERAC anticipates the revised approach will produce more frequent, targeted evaluations with less burden on boards.

PERAC distributes new fraud prevention materials as part of its statutory obligation to maintain a toll-free hotline (1-800-445-3266) for reporting suspected fraudulent public pension claims. The 2019 campaign slogan is "Blow the Whistle on Pension Fraud." Each board receives three copies each of the poster, a brochure describing the PERAC Fraud Prevention Unit, and "Referral Report of Potential Fraud" forms. County and regional retirement systems will separately receive materials to distribute to local governmental units. Suspected pension fraud may also be reported by email at PensionFraud@per.state.ma.us or via the online form at mass.gov/forms/online-fraud-referral-form.