retirement options

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 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 6 governs ordinary (non-work-related) disability retirement under Chapter 32. It allows a member who is permanently unable to perform the essential duties of their job to retire for ordinary disability after 15 years of creditable service (or 10 years for veterans or in systems accepting the 10-year option). Benefit amounts are calculated as though the member retired for superannuation at age 55 (or 60 for post-April 2, 2012 Group 1 members), with no less than the superannuation benefit if the member has already reached that age. The section also establishes the Regional Medical Panel process, which requires a three-physician panel to certify incapacity, and sets a 180-day deadline for final board determinations.

Section 7 governs accidental (work-related) disability retirement under Chapter 32. It applies when a member is permanently unable to perform job duties due to a personal injury or hazard sustained in the performance of their duties. The benefit equals 72% of the member's regular compensation (subject to a 75% total cap), plus an annuity based on accumulated deductions and an additional allowance for dependent children. The section includes strict timelines for filing notice of injury, requires Regional Medical Panel certification, provides for proration when injury occurred in a different governmental unit, and includes provisions for mutual aid situations where members are injured while assisting another jurisdiction.

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 12 governs the retirement option elections available to members at the time of retirement. Members may choose from three options: Option (a) — a full life annuity with no survivor benefit; Option (b) — a slightly reduced cash-refund life annuity that guarantees return of accumulated deductions to beneficiaries; and Option (c) — a reduced joint-and-last-survivor allowance that continues two-thirds of the payment to an eligible named beneficiary after the member's death. The section also establishes Option (d), the member-survivor allowance that provides an Option (c)-equivalent benefit to a qualifying spouse or eligible beneficiary if the member dies before retirement. Spousal consent requirements and detailed rules for beneficiary designation and option changes are also included.

Section 12D requires all Massachusetts Chapter 32 retirement systems to pay benefits in compliance with the required minimum distribution rules of Section 401(a)(9) of the Internal Revenue Code and its applicable regulations, as they apply to governmental plans under IRC Section 414(d). This provision, enacted in 2009, ensures that inactive members who are not yet receiving a retirement allowance and are no longer employed must begin taking required minimum distributions by the applicable federal deadline (currently April 1 of the year following the year they reach age 73), keeping the systems in federal tax compliance.

Section 13 governs when and how retirement allowances, annuities, and pensions are paid under Chapter 32. It establishes monthly payment schedules, pro rata rules for partial months, and authorizes direct deposit requirements. It also provides that members entitled to very small allowances (under $360/year) receive a lump-sum refund of accumulated deductions in lieu of ongoing payments, with an optional lump-sum available for allowances under $600/year upon written request.

Section 16 establishes the procedures for involuntary retirement initiated by a department head, including the member's right to a hearing before the retirement board. Members meeting minimum age and service thresholds (generally age 55 with 15 years, or 20 years of service regardless of age) may petition the district court to review adverse board decisions. All other aggrieved members may appeal to the Contributory Retirement Appeal Board, which assigns matters to the Division of Administrative Law Appeals for hearing, with final and binding decisions subject to limited further review.

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 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 44B provides school janitors eligible for retirement under Sections 44 or 44A with two pension options at retirement. Option A pays the full pension for life. Option B pays a reduced pension for life with a provision that two-thirds of that lesser amount continues to a surviving spouse (who was the spouse at retirement), with the surviving spouse receiving at least two-thirds of what the janitor was receiving at death. If a janitor who has served 20 or more years dies before retirement, the widow is entitled to two-thirds of the Option B allowance the janitor would have received, conditioned on at least 10 years of marriage, cohabitation at death, and surviving unmarried. Actuarial equivalence computations are supervised by the PERAC actuary at city or town expense. Acceptance requires a two-thirds city council vote (Plan D/E cities), regular city council vote (other cities), or annual town meeting majority vote.

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 58 provides that a veteran with thirty years of aggregate public service may retire at his own request (with retiring authority approval) at 72% of the highest applicable annual compensation for the grade held at retirement.

Section 58B allows veterans eligible to retire under section 58 to elect a reduced pension that, upon their death, provides two-thirds of that lesser amount to a surviving spouse or eligible beneficiary (child, parent, sibling) for life, with actuarial equivalency calculations supervised by PERAC.

Section 65A establishes pension rights for justices of the Supreme Judicial Court, Appeals Court, and Trial Court appointed before January 2, 1975: retirement under constitutional mandate entitles them to 75% of salary for life; justices with 15+ continuous years of service who retire between ages 65 and 70 also receive 75%; those who don't meet those thresholds receive a prorated pension of 10% of 75% of salary per year of service (up to ten years).

Section 65B provides pension rights for special justices of district courts and juvenile courts, and special judges of probate, upon mandatory retirement at age 70 or resignation at 65 after 10+ years of service, based on their average yearly earnings in the highest three years of service.

Section 65C allows retired judges to elect a reduced lifetime retirement allowance so that upon their death, their surviving spouse receives two-thirds of that lesser allowance for life; it also provides surviving spouse benefits when judges die before resigning, and sets rules for when these benefits apply or terminate.

Section 65D establishes the contributory retirement system for judges appointed on or after January 2, 1975, requiring salary deductions of 7–10% into a judges' retirement fund, providing 75% of salary upon retirement at age 65 after 15 continuous years or mandatory retirement at 70, with a judges' retirement fund to pay benefits and refunds.

Section 65H provides an optional early retirement allowance for judges who have made required contributions, calculated based on salary at retirement multiplied by years of continuous service and a percentage factor that varies with age, capped at 75% of salary, with a minimum of 10 continuous years of judicial service required.

Section 77A gives laborers eligible for retirement under section 77 the option to take either a full pension (Option A) or a reduced lifetime pension with a survivor benefit that pays half the lesser amount to a surviving widow (Option B); also provides a widow's benefit when a qualifying laborer dies before retirement, subject to local acceptance.

Section 85J gives police officers and firefighters eligible for noncontributory retirement under sections 80–85 or 85E the option at retirement of taking a full pension (Option A) or a reduced lifetime pension with a survivor benefit paying two-thirds of the lesser amount to a surviving widow (Option B), subject to local acceptance.

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.

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.

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.

This memo clarifies that the required minimum distribution (RMD) age remains 73 for 2025 notifications, consistent with the SECURE 2.0 Act's rules for members born on or after January 1, 1951. Members who turned 73 during calendar year 2024 must take their first distribution by April 1, 2025, so boards should send notices promptly. A sample notification letter is attached for boards to use.

PERAC has updated the Application for Reinstatement to Service form under G.L. c. 32 § 105, effective July 1, 2025 through June 30, 2026. Section 105 allows a retired member to return to active member-in-service status, but requires repayment of all retirement allowances received and at least five years of full-time employment after reinstatement. Boards should carefully counsel interested members about the financial implications and complete the first portion of the form before providing it to the member for signature.

Chapter 149 of the Acts of 2024 (effective October 29, 2024) creates a new enhanced accidental disability benefit under G.L. c. 32, § 7 for firefighters, police officers, EMTs, and licensed health care professionals who suffer a catastrophic, life-threatening or life-altering permanent physical injury as the direct result of an intentional violent attack with a dangerous weapon. Qualifying members receive 100% of their regular compensation (reduced to 80% upon reaching mandatory retirement age), rather than the standard 72% pension, with prescribed survivor benefits for spouses and children. Boards must include Findings of Fact with every Violent Act Injury application submitted to PERAC for the required 30-day review.

This memo transmits an updated list of all public employees who have forfeited eligibility to join a Chapter 32 retirement system under G.L. c. 32, § 15 due to misappropriation of funds or conviction of enumerated crimes. Boards are asked to review the attached alphabetical lists and notify PERAC of any discrepancies; if any forfeited member appears active in a board's system, boards must contact Doreen Duane with the last four digits of the member's Social Security number to confirm the individual's identity.

This memo notifies retirement boards that the FY23 budget signed by Governor Baker on July 28, 2022 included a 5% COLA for eligible State and Mass Teachers' Retirement System retirees, which triggers an increase in the supplemental dependent allowances under G.L. c. 32, §§ 7(2)(a)(iii) and 9(2)(d)(ii). Effective July 1, 2022, retirement systems that have accepted these provisions must pay an annual amount of $1,060.80 per eligible child to qualifying accidental disability retirees and accidental death survivors. Contact PERAC Actuary John Boorack with questions.

This comprehensive memo addresses the regular compensation status of vacation buyback payments following the enactment of G.L. c. 32, § 106 (Chapter 147 of the Acts of 2022) and the SJC's August 2022 decision in O'Leary v. CRAB. Under the new law, existing retirees whose allowances included vacation buyback payments are protected and their allowances will not be reduced; active members who were participating in such programs as of May 1, 2018, and whose retirement systems accepted contributions on those programs, may continue to have qualifying payments treated as regular compensation going forward. Boards are given detailed implementation instructions covering retirees, active members, and the interaction with CRAB's November 2018 partial stay order, which is now superseded.

This memo explains Chapter 269 of the Acts of 2022, signed November 16, 2022, which gives local retirement systems a one-time option to increase the FY2023 COLA to up to 5% on the applicable base amount under G.L. c. 32, § 103, retroactive to July 1, 2022. The approval process differs by municipality type — cities require city council action on the mayor's or city manager's recommendation, towns require select board approval, and regional/county systems require approval by two-thirds of member cities and towns. PERAC Actuary John Boorack provides a formula for estimating the full cost of the enhanced COLA.

This memo explains that the FY2021 budget (Chapter 227 of the Acts of 2020, Section 68), signed December 11, 2020, extends the waiver of G.L. c. 32, § 91 post-retirement earnings and hours restrictions for superannuation public retirees working in the public sector through calendar year 2021 (or the end of the Governor's State of Emergency, whichever comes first). The waiver applies regardless of whether employment is COVID-19 related and does not apply to disability retirees; PERAC will issue a memo when the State of Emergency ends.

PERAC notifies retirement boards that the Social Security Administration has announced a 2.8% Cost of Living Adjustment (COLA) for the prior year, based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Under G.L. c. 32, §103(c), any COLA granted by a retirement system effective July 1, 2019 may be up to 2.8%. Per §103(i), a board may elect to increase this to a maximum of 3.0% with proper legislative notice, but the process must be completed prior to June 30, 2019. Each board deciding whether or not to grant a COLA must notify PERAC within 30 days.

PERAC announces an updated Application for Reinstatement to Service from Superannuation/Termination Retirement Pursuant to G.L. c. 32 §105, effective July 1, 2019 through June 30, 2020. Because reinstating members may need to repay large amounts and must work at least five years of full-time employment (though not necessarily five years of creditable service), boards should carefully counsel interested members about requirements and benefits. Boards complete the first portion of the form and provide it to the member; upon signing, the member transitions from retiree status back to member-in-service status.

PERAC announces the 2019 supplemental dependent allowance amount for retirement systems that have accepted the provisions of G.L. c. 32, §7(2)(a)(iii) or §22D. Effective July 1, 2019, the annual allowance for each eligible child is $952.32. The same amount applies to additional pensions for dependent children under G.L. c. 32, §9(2)(d)(ii), also effective July 1, 2019.

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 supersedes Memo #26/2018 and Memo #39/2012 in light of CRAB's November 6, 2018 partial stay in O'Leary v. Lexington Retirement Board. Under the partial stay: retirees who retired on or before November 6, 2018 are unaffected; active members must no longer have contributions withheld on unused vacation pay going forward (but no refunds of prior contributions pending judicial review); and members retiring on or after November 6, 2018 must have vacation buyback payments excluded from their benefit calculation, with any contributions taken on such payments refunded at retirement. PERAC confirms the Order applies to all 104 retirement boards, not just Lexington.

This memo announces the federal compensation and benefit limits applicable to Massachusetts retirement systems for 2017 under Chapter 46 of the Acts of 2002, which brought state law into compliance with IRS requirements. For 2017, the Section 401(a)(17) compensation limit is $270,000 and the Section 415 annual benefit limit is $215,000 for members retiring at age 65. These limits affect only the highest-paid employees and boards should contact PERAC's actuary with questions.

This memo clarifies the respective responsibilities of retirement boards and PERAC in handling Domestic Relations Orders (DROs). Effective July 1, 2017, PERAC will no longer routinely review DROs for compliance with Chapter 32 or calculate the initial allocation between Participant and Alternate Payee—these are board responsibilities. PERAC will still assist with complex or unusual cases upon specific request. Training sessions on DROs will be offered in the first half of 2017.

This memo clarifies the specific documents boards must include when submitting calculations to PERAC for approval, organized by retirement type: Superannuation/Option D, Accidental Disability, Ordinary Disability, Accidental Death (active member), Accidental Death (retiree), and Section 101. Boards are asked not to include extra materials beyond what is listed, as unnecessary paperwork creates filing problems; additional documents will be requested only if needed after PERAC's initial review.

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 9.00 requires all retirement board decisions granting retirement applications to be approved by PERAC before being communicated to members or beneficiaries. Disability retirement decisions must be submitted to PERAC for approval within 30 days, while all other retirement decisions require approval within 90 days. The regulation specifies the documentation that must accompany each type of retirement decision—superannuation, disability, accidental death, and veteran's benefits. Boards may use PERAC-approved automated benefit calculation systems, which are deemed pre-approved and do not require individual submission to PERAC for each calculation.

840 CMR 11.00, which governed the rules for continued service after age 70 for public employees, was repealed effective March 29, 2024. The regulation had established the procedures and requirements for retirement boards to follow when members sought to continue employment past age 70. Questions about service after age 70 are now addressed under 840 CMR 12.00 (Service Between Age 65) and applicable provisions of M.G.L. c. 32. Boards should consult current PERAC guidance on this topic.

840 CMR 12.00 governs the rules for public employees who continue working after age 65, setting out which occupations require mandatory retirement at that age and which do not. Certain positions—including uniformed firefighters, uniformed police officers, members of the department of fisheries and wildlife, correctional officers, and certain airport personnel—are subject to mandatory retirement at age 65 unless the personnel administrator determines by regulation that age is not a bona fide occupational qualification. Retirement boards that determine a member is in a mandatory-retirement occupation must notify the member at least 120 days before the required retirement date.

840 CMR 15.00 is an omnibus regulation covering several administrative requirements for retirement boards. Boards must require all members and beneficiaries receiving benefits to file attestations of continued eligibility at least every two years, and must withhold benefits from those who fail to comply. The regulation also governs the purchase of creditable service, both prior membership service and non-membership service, including the order in which multiple purchase types must be completed. Additional sections address regular compensation definitions, benefit calculation factors, and the use of board credit and debit cards. Boards may satisfy the attestation requirement through semi-annual third-party data matching in lieu of individual attestations.