About Retirement

The Somerville Retirement System (“the System”) is a contributory defined benefit plan covering all employees deemed eligible by the Retirement Board, with the exception of school department employees who serve in a teaching capacity. The pensions of such school employees are administered by the Massachusetts Teachers’ Retirement Board.

Instituted in 1945, the System is a member of the Massachusetts Association of Contributory Retirement Systems (MACRS), governed by Chapter 32 of the Massachusetts General Laws, and is regulated by the Public Employee Retirement Administration Commission (PERAC). Membership in the plan is mandatory immediately upon the commencement of employment for all permanent, full-time employees.

  • Retirement System & Board

  • Retirees

  • Active Members

  • Forms & Information

  • Frequently Asked Questions

Staff Members

  • Michael Pasquariello, Executive Director
  • Dave Castellarin, Deputy Director (x4604)
  • Karen Marchant, Admin Assistant (x4600)

Retirement Board Members

  • Edward F. Bean, Chairman
  • Tom Ross, Vice Chairman
  • Alex Nosnik, Mayoral Appointee
  • Robert Massie, 5th Board Member
  • John M. Memory, Elected Member
  • Thomas Ross, Elected Member

Investments

Budgets

Meeting Agendas & Minutes
 

Reports

Retirement Board Member Elections PERAC Guidelines
 

Massachusetts Association of Contributory Retirement Systems (MACRS)
 

Public Employee Retirement Administration Commission (PERAC)

 

Q: Is membership mandatory for employees?

A: Yes. Membership in the Somerville Retirement System is required by law immediately upon the commencement of employment for all permanent, full-time employees who work at least twenty (20) hours per week, with the exception of school teachers. The pensions of such school employees are administered by the Massachusetts Teachers’ Retirement Board. Para-Professionals are Members of the City Somerville Retirement System.

Please contact the Retirement Office in order to inquire about eligibility to purchase any previous non-contributing, non-member employment service.

Q: How much do Members contribute to the Retirement System?

A: The amount each Member is required to contribute to the Somerville Retirement System is established by MA G.L. Chapter 32 statute. If you joined the System on or after July 1, 1996, you must contribute nine percent (9%) of your regular compensation. If you joined any time between January 1, 1984 and June 30, 1996, your contribution rate is set at eight percent (8%). Members who joined the system between January 1, 1975 and December 31, 1983 contribute seven percent (7%). Those employees who became members prior to January 1, 1975 contribute five percent (5%). The law also mandates that for members whose membership commenced on or after January 1, 1979, an additional two percent (2%) of regular compensation will be withheld on annual compensation in excess of $30,000. This two percent (2%) is in addition to the seven (7%), eight (8%) or nine (9%) percent standard contribution/deduction from your total regular compensation.

Q: Does a Member’s contribution to the Retirement System earn interest? If so, how is the interest calculated?

A: Yes, your contributions/deductions are placed in an individual annuity savings account where it earns annual interest at a statutory rate comparable to that of an individual savings account. The interest rate is determined by the Public Employee Retirement Administration Commission (PERAC) in consultation with the Commissioner of Banks on an annual basis in accordance with the provisions of MA G.L. Chapter 32, Section 22(6)(b). This annual interest rate is independent of that earned on the Retirement System’s investments.

Q: Are Member contributions used to fund the administrative expenses of the Retirement System?

A: NO, Member contributions are never used to fund administrative expenses. The System’s operating expenses, including all fees associated with actuarial and audit services, investment management, consultant and custodial fees, are funded solely through the system’s investment income.

Q: What are the group classifications within the Retirement System?

A:

Group 1 - General employees and officials, including clerical, administrative and technical workers, laborers mechanics and all other not otherwise classified.

Group 2 - Fire or police signal operators or signal maintenance repairmen; ambulance attendants of municipal departments who are required to respond to fires and perform duties assigned to them; employees of a city or town who are employed as licensed electricians.

Group 4 – public safety officers such as Firefighters and Police Officers.

Q: What does it mean to be 'vested'?

A: Vested, is the term commonly used to signify the establishment of the right (or entitlement/eligibility) to a retirement allowance. Members no longer have to remain in service to be eligible to collect benefits.

Q: When does vesting occur?

A: You must have ten years of creditable service in order to be considered vested. If you transfer creditable service from another MA Chapter 32 retirement system or if you buy back prior service, such service is added to your Somerville service to determine when you are vested.

Q: What is the definition of Superannuation?

A: "Superannuation" is the term that is used to describe the process of being retired upon reaching a certain age and meeting other requirements, including length of creditable service.

Q: When am I considered eligible to retire on the basis of Superannuation?

A: Groups 1, 2, and 4 (For those who became Members prior to April 2, 2012)

  • If your membership began prior to January 1, 1978, upon attaining age 55 you are eligible to retire. There are no minimum service (vesting) requirements for members in this category.
  • If your membership began on or after January 1, 1978 and you are a Member of Group 1 or Group 2, you must have at least ten years of creditable service, and be age 55 or older to be eligible to receive a retirement allowance. If such a member terminates their employment prior to completing ten years of creditable service, eligibility for benefits is limited to a refund of accumulated deductions. A superannuation retirement allowance would not be payable. However, a member may always leave their money in the retirement system and achieve ten years of service via later public employment.

In general, you are eligible to retire at any age if you have twenty years of creditable service.

For those who became Members on or after April 2, 2012:

Group 1: If your position is classified in Group 1, you have at least ten years of creditable service, and are age 60 or older you are eligible to receive a superannuation retirement allowance. If you terminate your employment prior to completing ten years of creditable service, eligibility for benefits is limited to a refund of your accumulated deductions plus regular interest established by statute. A superannuation retirement allowance would not be payable. You may choose to leave your account in the Retirement System to retain your rights in the event you again become a public employee and a member of a retirement system.

Group 2: If your position is classified in Group 2, you have at least ten years of creditable service and are age 55 or older, you are eligible to receive a superannuation retirement allowance. Please note that you must have performed the duties of the Group 2 position for at least 12 months immediately prior to termination or retirement. If you terminate your employment prior to completing ten years of creditable service, eligibility for benefits is limited to a refund of your accumulated deductions, plus interest established by statute. You may choose to leave your account in the Retirement System to retain your rights in the event you again become a public employee and a member of a retirement system.

Group 4: If your position is classified in Group 4 and you are age 55 or older, you are eligible to receive a superannuation retirement allowance. Please note that you must have performed the duties of the Group 4 position for at least 12 months immediately prior to termination or retirement. You may choose to leave your account in the Retirement System to retain your rights in the event you again become a public employee and a member of a retirement system.

Q: How is a retirement allowance calculated?

A: The Somerville Retirement System is a defined benefit plan. The retirement allowance is determined by a formula, it is not affected by the amount of money in your annuity account at the time of retirement. The factors used to determine your retirement allowance are; your age at the time of retirement, your length of creditable service (years and months), your group classification and the average of your three highest consecutive years of regular compensation for those who became Members prior to April 2, 2012 (the average of your five highest consecutive years would be used for those who became Members on or after April 2, 2012).

Q: Can I purchase creditable service earned in another Massachusetts Chapter 32 public retirement system?

A: If you were a member of another MA retirement system subject to the provisions of Chapter 32 of the General Laws, and you withdrew your retirement funds from that system, it is possible to buy back that prior creditable service. The Retirement Office will verify your prior service and calculate the amount of your buyback/re-deposit. You must repay the amount that was withdrawn, plus interest up to the date of the repayment. You may complete a buy back as a lump sum payment or in an installment payment plan up to a maximum 5 years.

Q: Will prior creditable service affect my membership date or contribution rate in the Somerville Retirement System?

A: If you have retirement contributions from a previous MA Chapter 32 retirement system /public employer that directly transferred to our system, you are entitled to maintain the level of contribution % you were paying in your previous employment. If you received a refund of retirement contributions from your previous retirement system and later became a Member of the Somerville System, your contribution rate with Somerville will be at the new current Member rate, regardless of what you were paying in the prior system. If you should later purchase your prior creditable service through a buyback/redeposit, your contribution level will remain at the new Member rate and will not be reduced to your previous rate.

Q: If I was a temporary employee, may I apply that time towards my creditable service?

A: If you were employed on a temporary, non-Member basis prior to becoming permanently employed and a retirement system Member, you may be entitled to purchase this service time towards your retirement creditable service. If you have temporary service with another Chapter 32/public agency in Massachusetts, you may also be entitled to purchase that service time as well and apply it to your retirement creditable service. These rules are very complex and each request is unique and will require documentation and research. Please contact the Retirement Office for more information.

Q: How is creditable service achieved?

A: Members earn creditable service towards their retirement allowance for the period during which they are contributing to the City of Somerville Retirement System. For Members of the System who work twenty (20) or more hours per week, this service time starts accruing the day you begin work and continues until the day you separate from service. However, if there is a period of time when you are unpaid and not on the payroll, you should consult with the Retirement Office as to how this will impact your amount of creditable service.

Q: What is Regular Compensation ? Is Regular Compensation the same as total compensation?

A: No. Regular compensation is compensation received exclusively as wages by an employee for services performed in the course of employment for his/her employer; the portion of your salary that is subject to retirement contributions. Overtime, bonus pay, severance pay, housing, clothing, payments made for unused sick and vacation time, and certain other payments are not considered regular compensation, are not subject to retirement deductions and cannot be used towards your average for the purpose of determining your retirement allowance.

Q: Does my participation in a 457 deferred compensation plan affect my Somerville retirement benefit?

A: No. Your Somerville retirement benefit is completely separate and independent from and not related to participation in any deferred compensation plan. The 457 plan is an optional retirement savings vehicle, which allows you to supplement your retirement on a tax-deferred basis. It is strongly recommended that voluntarily participating in this 457 plan be considered.

Q: If I leave my job and decide to withdraw my contributions will I receive all my interest?

A: It depends on the length of service and whether or not the Member voluntarily withdrew from service. No interest shall be included in the accumulated total deductions paid to the Member for any period after the expiration of two (2) years from the end of the month preceding the date of termination of service. When the Member 1- has less than ten (10) years of creditable service and has voluntarily withdrawn from service the Member will receive 3% interest on accumulated total deductions; 2- has more than ten (10) years of creditable service and has voluntarily withdrawn from service the Member will receive all of the regular interest on accumulated total deductions; 3- was involuntarily terminated from service the Member will receive all of the regular interest on accumulated total deductions, regardless of creditable service.

Q: Is there any time limit after your termination for requesting a refund of your contributions?

A: No. You may request a refund of your funds at any time after termination of service. If you leave your funds on deposit, however, and later seek a refund, your deductions will only earn interest for two years after termination. The prior answer above outlines the criteria used to determine your interest eligibility.

Q: Can a Member who is vested and who terminates employment still be eligible for a refund?

A: Any Member who terminates employment may be eligible to withdraw their retirement contributions/funds in their annuity account. If the member is vested and has earned the right to a retirement allowance at a later date, careful and strong consideration should be given to the value of the retirement benefit he or she may be forfeiting in exchange for a refund.

Q: If I terminate my employment and leave my money in the retirement system, can I retire at a later date?

A: Yes, if a vested Member terminates employment, he or she may choose to “defer” retirement by leaving their money in the system until you decide to retire and begin receiving retirement benefits.

Q: Can a current Member withdraw or borrow money from his or her annuity account in the retirement system?

A: No. There is no loan provision in this plan. An active member cannot withdraw or borrow any contributions from their annuity account under any circumstances.

Q: If I leave my job, what happens to my contributions?

A: If you leave your job and are not going to work for another governmental unit which comes under the provisions of MA Chapter 32, you may be eligible to receive a refund of your Accumulated Total Deductions/contributions in your annuity account. Please carefully review the Special Tax Notice prior to considering a refund. If you leave to accept a position with a Massachusetts political subdivision subject to MA Chapter 32, your retirement contributions in your annuity account must be transferred directly to your new Retirement System.

Q: What are the tax consequences if I take a refund of my retirement contributions/annuity account?

A: Your contributions and all the interest you receive from your account are subject to federal income tax (with exception of any contributions made prior to January 12, 1988). When processing a refund of retirement contributions, the Retirement Office is required to withhold 20% of the taxable portion of your refund for federal tax purposes. The 20% tax payment is required only if the refund is made directly to the Member. To defer tax payments, you may make a direct rollover of your retirement funds to an Individual Retirement Account (IRA), a 401(a) qualified plan, a 403(b) annuity contract, or an eligible governmental 457(b) deferred compensation plan. There is no federal tax is withheld with a direct rollover and the entire taxable portion of your refund is transferred. If you have both taxable and non-taxable contributions, you may accept receipt of the non-taxable portion of your refund without tax consequence and the taxable portion may be rolled over. 

Q: If I die before retirement, what happens to my money?

A: If you are married and die before you retire, your surviving spouse will have the option of collecting a monthly benefit, including a monthly allowance for children under the age of 18 or if a student in an accredited institution until age 22, or receiving a lump sum payment of your contributions (annuity account). Contact the Retirement Office for more information. Completing a Beneficiary form is strongly recommended.