creditable service

Section 1 establishes the definitions for all key terms used throughout Sections 1–28 of Chapter 32, the Massachusetts public employee retirement law. It defines over 60 terms including member classifications, types of deductions, compensation concepts, retirement allowance components, and system-specific vocabulary. Retirement board administrators rely on this section to correctly interpret and apply every other section in the chapter, as terms such as 'regular compensation,' 'creditable service,' and 'accumulated total deductions' appear throughout and carry precise statutory meanings.

Section 3 governs the conditions of membership in a Massachusetts contributory retirement system, covering both member-in-service and member-inactive status, how membership begins and ends, and special membership scenarios. It establishes the four group classifications (Group 1 through Group 4) that determine retirement age thresholds and benefit formulas, and specifies the criteria for assignment to each group. The section also addresses multiple-system membership, part-time and intermittent employment, leaves of absence, dual compensation situations, and the procedures for reinstatement or transfer of membership between systems.

Section 4 defines creditable service under Chapter 32 — the service credit that forms the basis of a member's retirement allowance calculation. It covers how current and prior service is credited, conditions for military service credit, leaves of absence, service with multiple governmental units, purchase of prior service, and service buybacks. The section also includes provisions for credited service during various types of leave, including unpaid leave, FMLA, and military duty, and establishes rules for members who transfer between systems or have gaps in service.

Section 5 governs superannuation (regular age-and-service) retirement under Chapter 32. It sets the eligibility conditions based on age and group classification, defines the benefit formula using a percentage-of-average-salary table multiplied by years of creditable service, and provides separate tables for employees hired before and after April 2, 2012. The section also establishes the alternative superannuation retirement benefit program for teachers (the 11% contribution tier), the 80% maximum benefit cap, special rules for veterans, and limitations imposed by Internal Revenue Code Section 415.

Section 10 governs the retirement rights of members whose public employment ends before they would otherwise reach full superannuation retirement age. It establishes eligibility for superannuation or termination retirement allowances for members who resign, are removed, fail of reappointment, or whose positions are abolished, based on years of creditable service and age. Pre-April 2, 2012 members with 20 or more years of creditable service may retire immediately; those with 10 or more years may defer their allowance to age 55. Post-April 2, 2012 members must have 10 years of service and wait until minimum retirement age. The section also addresses the right to defer receipt of an allowance and return of accumulated total deductions.

Section 14 addresses the interplay between Chapter 32 retirement rights and workers' compensation benefits under Chapter 152. Members receiving workers' compensation for total incapacity retain member-in-service status and accrue creditable service during that period. It also establishes an offset rule: workers' compensation payments for the same injury that gives rise to a disability pension are credited against the pension, so that a member does not receive full benefits from both sources simultaneously.

Section 28A provides that any state police officer appointed under Chapter 22C, Section 10, who has performed at least 20 years of service in the department, may retire at their own request. The retirement allowance is calculated under the same formula established in Section 26(3)(c) — the Group 3 service retirement provision.

Section 28I provides that a Commonwealth employee who is a retirement system member and is selected to serve with an interstate commission that Massachusetts participates in and funds shall continue as a retirement system member while on that assignment. The employee must continue making monthly contributions as if still on the state payroll, and retains all retirement system benefits and privileges during the interstate commission service.

Section 28K governs retirement system membership for Commonwealth or political subdivision employees who take a leave of absence (full-time or part-time) to serve as a representative of an employee organization. Such employees are treated as on unpaid leave, but continue to accrue creditable service as if in active service and must continue making monthly retirement contributions at the rate they would have paid if still working. The employee retains all retirement benefits and privileges except salary during the leave. The provision for crediting service back to January 1, 1975 requires majority board vote and acceptance by the appropriate legislative body, with a certificate of acceptance filed with PERAC.

Section 28M allows Group 4 Department of Correction employees whose major responsibilities include the care and custody of prisoners, and transportation officers within the department, to retire at their own request after 20 years of service. The base retirement allowance equals 50% of the average annual compensation during the final 12 months of creditable service, increased by one-twelfth of 1% for each full month of service beyond 20 years up to the mandatory retirement age. Veterans receive an additional allowance of $15 per year of creditable service, capped at $300.

Section 28N allows correction or jail officers employed by county sheriffs' offices who have performed at least 20 years of service to retire at their own request. The base retirement allowance equals 50% of the average annual compensation during the final 12 months of creditable service, increased by one-twelfth of 1% for each full month of service beyond 20 years up to the mandatory retirement age. Veterans receive an additional allowance of $15 per year of creditable service, capped at $300.

Section 45C provides an enhanced longevity formula for school janitor pensions in cities and towns that have accepted Sections 44 and 45A and also accept this section. For janitors with 20 years of service, the base pension equals one-half of the highest annual compensation in their grade at retirement. For each year of service beyond 20, the pension increases by an additional 1% of that compensation, subject to an overall cap of 65% of highest annual compensation. Acceptance requires a two-thirds city council vote (Plan D/E cities), regular city council vote (other cities), or annual town meeting majority.

Section 46 establishes a legacy non-contributory pension system for officers, instructors, and employees of Massachusetts correctional institutions who began their employment on or before June 7, 1911. Retirement requires a recommendation from the Commissioner of Correction (with additional approvals from sheriff and county commissioners or city officials for jail/house of correction officers) and one of: age 65 with 20 years of prison service and a good record; permanent disability from a duty injury without fault; or 30 years of faithful prison service. The term "officer" expressly includes prison officer, correction officer, and matron.

Section 47 governs the calculation of service credit for retirement eligibility under Section 46. Correctional officers, instructors, and employees may combine service from multiple qualifying institutions — including correctional institutions, the prison camp and hospital, and juvenile training schools — for purposes of meeting the service thresholds. Service credit is forfeited only for dismissals for misconduct that were not later reversed; a restoration to duty or reappointment serves as sufficient evidence of exoneration.

Section 57B allows police and fire department members retiring under sections 56–60 to count service as reserve police officer or call firefighter as creditable service for retirement purposes, subject to local acceptance by the appropriate governing body.

Section 58A credits wartime military service toward retirement eligibility for veterans who were in public employment before entering service and were reinstated or reemployed within two years after discharge, subject to limits on voluntary service beyond four years.

Section 60 makes sections 56–59 effective in any county, city, town, or district that accepted them before January 1, 1946, and bars veterans whose employment first began after June 30, 1939 from coverage, while also requiring eligible veterans to have creditable service at least equal to twice their time not in public employ since their service began.

Section 77C provides that in accepting cities and towns, a laborer who was employed before July 1, 1937 and was later promoted to a supervisory position in the same department does not forfeit any noncontributory pension rights under section 77 by reason of accepting that promotion.

Section 78A bars laborers first employed after June 30, 1937 from coverage under sections 77, 77D, or 78, and clarifies that years of service required under those sections need not be continuous.

Section 85G provides that police and fire department members retiring under sections 80–85F who were appointed as reserve police officers or reserve/call firefighters before July 1, 1937 shall receive credit for the actual service rendered each year in those capacities as part of their continuous service for retirement purposes.

Section 85I (an alternative to section 85G for accepting cities and towns) allows the retiring authority to determine how much service as a reserve police officer or reserve/call firefighter appointed before July 1, 1937 is credited toward continuous service for retirement purposes under sections 80–85F.

Section 105 allows members retired under sections 5 or 10 to be reinstated in a retirement system by repaying all retirement allowances received plus buyback interest; upon reinstatement they resume contributing and earn creditable service, but receive a refund of reinstatement payments (without service credit) if they separate with fewer than 5 years of reinstatement service.

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.

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.

PERAC distributes the 2025 repayment worksheets and cumulative interest factor sheets for calculating buybacks and make-ups under various Chapter 32 provisions. The packet includes three worksheets each for buyback interest and actuarial interest, and two pages of cumulative factors for each rate. Boards should consult PERAC Memo #23/2012 to determine whether buyback interest or actuarial interest applies for specific buyback categories under §§ 3(3), 3(4), 3(4A), 3(5), 3(6)(d), and 3(8)(b).

Section 26 of Chapter 9 of the Acts of 2025 (the FY2026 Budget) amends the definition of 'wages' in G.L. c. 32, § 1 to clarify that accrued sick, personal, or vacation leave constitutes regular compensation when used — except when used as a supplement to Workers' Compensation under Chapter 152. This supersedes Memo #23/2023 and means that accrued leave used to supplement PFML payments is now regular compensation effective July 1, 2025, requiring retirement deductions to be withheld from such supplemental leave payments.

This memo sets the 2024 "regular interest" rate at 0.1% for regular and additional deductions made after January 1, 1984, as required by G.L. c. 32, § 22(6)(b). The rate is derived from the average rates paid on individual savings accounts at a representative sample of at least 10 financial institutions. Boards must apply this rate to accumulated total deductions for refunds, retirements, and year-end crediting on December 31, 2024.

PERAC distributes the updated 2024 worksheets and cumulative interest factor sheets for calculating buyback and make-up repayments under the various provisions of G.L. c. 32, §§ 3 and 4. Boards should use buyback interest for make-ups under § 4 provisions, while certain § 3 make-ups (covering prior service, military service, and similar situations) may use either buyback or actuarial interest depending on circumstances described in Memo #23/2012. The packet includes three repayment worksheets each for buyback and actuarial interest, plus separate cumulative interest factor pages for each method.

This memo provides the 2nd Quarter 2024 mandatory training schedule for retirement board members, who are required by Chapter 32 to earn 18 credits over a board term and at least 3 credits each year. Upcoming opportunities include live webinars on the Open Meeting Law and disability basics, the MACRS Spring Conference (June 1–5 in Hyannis, which can yield up to 9 credits), and several pre-approved on-demand courses. Board members must register under their full name and submit Training Affidavits in PROSPER for any training not automatically tracked by PERAC.

PERAC announces amendments to five regulations effective March 29, 2024. Notable changes include: updated travel rules (840 CMR 2.00) including IRS-rate mileage and prohibition on reimbursing personal accommodations; repeal of the now-obsolete $30,000 salary cap regulation (840 CMR 8.00), service-after-age-70 regulation (840 CMR 11.00), and most of the age-65-to-70 service regulation (840 CMR 12.00); and significant updates to the Miscellaneous regulation (840 CMR 15.00), including replacing notarized affidavits with signed attestations subject to 5% random audit, a new credit card usage subsection requiring PERAC-approved supplemental regulations, and a new non-disability hearing procedure. Boards must review their supplemental regulations and submit amendments to PERAC as needed.

This memo provides the 3rd Quarter 2024 mandatory training schedule for retirement board members, who must earn 18 credits over their term and at least 3 per year. Key offerings include July and August webinars on open meeting law, fiduciary duty, and procurement, plus the PERAC Emerging Issues Forum on September 18 in Westborough (3 credits). PERAC is also launching a new New Administrator Training series, with the first session on August 21 in Northampton, designed for staff with fewer than five years of experience. All non-live-PERAC training requires a Training Affidavit submitted through PROSPER.

PERAC releases an updated Application for Reinstatement to Service form under G.L. c. 32 § 105, effective July 1, 2024 through June 30, 2025. This form is used when a superannuation or termination retiree wishes to return to active public employment; signing it converts the individual from retiree status back to member-in-service status. Because reinstatement may require repayment of large sums and mandates at least five years of subsequent full-time employment, boards are urged to counsel members carefully before they proceed.

The HERO Act (Chapter 178 of the Acts of 2024), signed August 8, 2024, makes substantial changes to veterans' creditable service buybacks under Chapter 32. It replaces the old 180-day window with a new deadline of within one year of vesting (effectively 11 years of creditable service), and creates a one-year grace period — until August 8, 2025 — for active members who missed their original opportunity. Most urgently, boards must send written notice to all active members by November 6, 2024, using the sample notice attached, and must begin providing veterans' buyback information to all new members at enrollment.

This memo provides the 4th Quarter 2024 mandatory training schedule for retirement board members, who must earn 18 credits over their term and at least 3 per year. Key offerings include a PERAC Legislative Update webinar on October 23, the New Administrator Training in Danvers on November 19, and the Fall MACRS Conference in Springfield December 8–11 (potentially up to 9 credits). New on-demand resources include a PERAC webinar on the HERO Act/Veterans' Buyback changes. Board members must submit Training Affidavits in PROSPER for all non-PERAC-live training.

The SJC's September 2024 ruling in Hartnett v. CRAB overturned PERAC's longstanding interpretation of the G.L. c. 32, § 5(2)(a) anti-spiking provision, holding that "2 consecutive years" means consecutive calendar years — not consecutive years of creditable service. As a result, members who had anti-spiking applied based on salary differences between non-consecutive calendar years (e.g., a break in service followed by a return just before retirement) were improperly penalized. Boards must identify affected retirees, recalculate their allowances to remove any improper downward adjustment, and pay the underpayment plus correction-of-errors interest, offsetting any contributions previously refunded.

The FY25 budget (Chapter 140 of the Acts of 2024) expands the return-to-service options for disability retirees under G.L. c. 32, § 8. A disability retiree may now request evaluation for a different, specifically identified position — even with a different employer or in a different retirement system — rather than being limited to the position from which they retired. If found medically able, the member may return to active service, the original disability pension ceases, and upon eventual superannuation retirement both systems will share the pension cost under the existing multi-system rules. The CME and RTS processes remain unchanged; boards should direct all related inquiries to PERAC, which is updating its forms.

This memo provides the 1st Quarter 2025 mandatory training schedule for retirement board members, issued at the close of 2024. Key upcoming sessions include a PERAC "Preparing the Annual Statement" webinar on January 22, a "Recent Cases of Interest" webinar on February 20, a PERAC Cybersecurity webinar on March 19, and the final New Administrator Training in this series on March 26 in Norwood. Board members must earn at least 3 credits per year and 18 credits per term; all non-PERAC-live training requires a Training Affidavit submitted through PROSPER.

This memo transmits the 2023 buyback and make-up repayment worksheets and cumulative interest factor sheets for use in calculating buyback and make-up payments under the various creditable service provisions of G.L. c. 32. Boards should use these updated worksheets for all buyback and make-up calculations in calendar year 2023, noting that some provisions use buyback interest exclusively while others allow either buyback or actuarial interest depending on circumstances described in Memo #23/2012. Three repayment worksheets and corresponding cumulative interest factor sheets are provided for each interest type due to varying investment return assumptions.

This memo sets the "regular interest" rate for calendar year 2023 at 0.1%, as determined by PERAC in consultation with the Commissioner of Banks based on the average rates paid on individual savings accounts at a representative sample of at least ten financial institutions, pursuant to G.L. c. 32, § 22(6)(b). This rate applies to accumulated total deductions and accrued interest for refunds and retirements credited during 2023, and to outstanding balances as of December 31, 2022 credited on that date. No action is required of boards beyond applying this rate in their calculations.

This memo transmits the updated Application for Reinstatement to Service from Superannuation/Termination Retirement under G.L. c. 32, § 105, which is effective July 1, 2023 through June 30, 2024. Boards are instructed to complete the first section of the form and provide it to any interested retirees, who upon signing are converted from retiree to member-in-service status; boards should carefully counsel members about the requirements, including repayment of large amounts and the requirement to work at least five years of full-time employment before the reinstatement fully takes effect. Boards with investment return assumptions not shown on the form should contact PERAC's actuarial unit for custom factors.

This memo addresses a change in Massachusetts Paid Family and Medical Leave (PFML) law — effective November 1, 2023 under Chapter 55 of the Acts of 2023 — which now allows employees on PFML to supplement their benefits with accrued paid leave (sick, vacation, PTO, etc.), up to the employee's Individual Average Weekly Wage. Despite this change, PERAC clarifies that neither PFML benefits nor supplemental accrued leave payments constitute "regular compensation" under Chapter 32, relying on SJC precedent from Vernava I and Vernava II, because the employee is not performing services during leave; therefore, the period of PFML with supplemental pay does not generate creditable service. No board action is required beyond ensuring that retirement benefits are not enhanced based on income received while on PFML leave.

This memo explains the implementation of Section 82 of Chapter 28 of the Acts of 2023, which gives active members who elected to stop retirement contributions at age 70 under the repealed G.L. c. 32, § 90G 3/4 a one-time opportunity to rescind that election and receive creditable service for years worked after age 70. To be eligible, members must have maintained continuous service since their election, be active as of November 29, 2023, and elect to restart contributions and make up all missed contributions plus buyback interest by January 29, 2024 (60 days from PERAC's IRS clearance date). Boards must immediately identify any qualifying active members and provide them with the necessary information and the attached application form.

This memo distributes the 2022 buyback and make-up repayment worksheets and cumulative interest factor sheets for use in calculating service purchases under various provisions of G.L. c. 32. Boards must use the buyback interest or actuarial interest worksheet depending on the specific statutory subsection involved, with three repayment worksheets provided for each rate type along with cumulative interest factor sheets. Questions should be directed to John Boorack at PERAC.

Following the SJC's February 4, 2022 decision in Vernava II (Worcester Regional Retirement Board v. PERAC), this memo provides comprehensive, action-required guidance directing all retirement boards to immediately implement the ruling that supplemental payments of any kind made concurrently with Workers' Compensation benefits do not constitute "regular compensation" under any section of Chapter 32. Boards must identify all active members, inactive members, and retirees who received such supplemental payments, remove previously awarded regular compensation and creditable service for periods of concurrent Section 35 Workers' Compensation receipt, recalculate allowances, and return all deductions taken on those supplemental payments. The memo includes detailed step-by-step instructions for active members, retired members, and their beneficiaries, and notes that PERAC is pursuing legislative relief for affected retirees.

This memo announces the 3rd Quarter 2022 mandatory training schedule for retirement board members, who are required by Chapter 32 to earn at least 3 credits per year of service and 18 credits over each full term. The schedule includes webinars, in-person sessions, and conferences from July through October 2022, highlighted by the return of the in-person Emerging Issues Forum on September 15, 2022 at the College of the Holy Cross in Worcester. Board members must register for live events through PROSPER and submit Training Affidavits for pre-recorded or independently attended sessions.

This memo announces an updated version of the PERAC Application for Reinstatement to Service from Superannuation/Termination Retirement under G.L. c. 32, § 105, effective July 1, 2022 through June 30, 2023. Boards are directed to carefully counsel members interested in reinstatement, as applicants must repay retirement allowances received and work at least five years of full-time employment after reinstatement. Upon signing the form, the member transitions from retiree status back to member-in-service status.

This memo notifies boards that PERAC has filed proposed amendments to 840 CMR 3.00 (IRS Code Compliance Provisions) and 840 CMR 13.00 (Service Purchases and Buybacks) to ensure Chapter 32 plans meet IRS requirements under G.L. c. 32, § 12D. Two public hearings are scheduled via Zoom on December 15 and December 19, 2022, with written comments accepted through December 21, 2022; boards are invited to review the attached proposed amendments and submit comments to PERAC Associate General Counsel Felicia McGinniss.

This memo answers frequently asked questions from retirement boards following the SJC's December 2019 decision in Plymouth Retirement Board v. CRAB & PERAC (Gomes), which required members to pay for up to five years of creditable service under G.L. c. 32, § 4(2)(b) for prior reserve, permanent-intermittent, or call firefighter/police service. PERAC clarifies that detail pay counts as compensation toward the $5,000 annual threshold, that the "same department" requirement applies only to firefighters (not police officers), and that a member ineligible for § 4(2)(b) service may still purchase prior service on a day-for-day prorated basis under other statutory mechanisms such as § 3(5).

PERAC transmits the 2019 worksheets for calculating buybacks/make-ups and cumulative interest factor sheets. Calculations under G.L. c. 32, §§ 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. Calculations under §§ 3(3), 3(4), 3(4A), 3(5), 3(6)(c), 3(6)(d), and 3(8)(b) are subject to Chapter 176 of the Acts of 2011 and may use either buyback or actuarial interest (see PERAC Memo #23/2012). Two repayment worksheets exist for each interest type due to differing investment return assumptions.

PERAC has set the regular interest rate for 2019 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 2019, and will also be credited on December 31, 2019 for outstanding balances as of December 31, 2018.

This memo distributes the 2018 worksheets for calculating buybacks and make-ups under G.L. c. 32, §§ 3 and 4, along with cumulative interest factor sheets. Boards must use these worksheets for all covered buyback and make-up calculations, and should refer to Memo #23/2012 to determine whether to apply buyback interest or actuarial interest for §§ 3(3), 3(4), 3(4A), 3(5), 3(6)(c), 3(6)(d), and 3(8)(b) transactions.

This memo comprehensively clarifies when retirement boards must pay interest to members/beneficiaries and when members owe interest to boards, superseding portions of Memos #43/1999 and #29/2016. Key rules: boards pay interest at the "correction of errors" rate when an error reduces a benefit (per Herrick); boards do not pay interest on refunds of excess deductions that do not affect the pension amount (per Hollstein); members who were erroneously excluded from membership must now pay the "correction of errors" interest rate on service purchases (reversing prior PERAC guidance, following DALA/CRAB decisions); and members do not pay interest on under-withheld deductions. The memo also addresses Section 4(2)(b) refunds, the Needham Bill waiver provision (§ 20(5)(c)(3)), and includes a detailed scenario chart.

This memo announces an updated PERAC form for reinstatement to service from superannuation or termination retirement under G.L. c. 32, § 105, effective July 1, 2018 through June 30, 2019. Boards must counsel interested members carefully, as reinstatement requires at least five years of full-time employment and potentially large repayments; boards complete the first portion of the form and upon the member's signature the individual reverts from retiree to member-in-service status.

This memo addresses the SJC decision in Retirement Board of Stoneham v. CRAB (December 22, 2016), which held that once a member is admitted to a retirement system, their membership continues as long as they remain employed regardless of subsequent changes in hours or pay. Boards that have erroneously removed members from membership must re-enroll them, deduct missing contributions, and allow payment on an installment plan. The memo also clarifies the interaction with the Under $5,000 Rule added by Chapter 21 of the Acts of 2009.

This memo distributes the 2017 buyback and make-up repayment worksheets and cumulative interest factor sheets for use in calculating creditable service purchases under the various subsections of G.L. c. 32, §§ 3 and 4. The memo notes that two sets of worksheets are provided for both buyback and actuarial interest due to differing investment return assumptions, and directs boards to PERAC Memo #23/2012 for guidance on when each rate applies.

This memo informs retirement boards of PERAC Calculation Policy 15-001, developed internally in 2015 to address requests for G.L. c. 32, § 3(8)(c) reimbursement letters for members who retired many years ago. Due to a recent increase in such requests—some involving retirements over 30 years old—PERAC is distributing the policy to all boards. The policy and its application to specific cases should be directed to PERAC's Actuarial Unit.

840 CMR 13.00 implements the expanded tax-deferred rollover opportunities created by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), allowing public employees to purchase creditable service using assets held in other tax-deferred retirement plans. Retirement boards may accept Eligible Rollover Distributions paid directly to the system (Direct Rollovers) from qualifying plans including IRAs, qualified plans under IRC § 401(a), eligible 457(b) plans, and annuity contracts under IRC § 403(b). The regulation defines key terms including Direct Rollover, Eligible Retirement Plan, and Eligible Rollover Distribution, and clarifies the types of distributions that do not qualify for rollover treatment.