Retirement

Updated 8/2/2019

The Somerville Retirement Board is seeking proposals from qualified investment managers to provide Fixed Income Investment Management Services.

A copy of the Request for Proposal (RFP) is available at the Somerville Retirement Board, 323 Broadway, Somerville, MA 02145. The RFP is also available electronically at this link.

Responses to this Request for Proposal will be accepted until Tuesday, September 24, 2019 prior to 4:00 p.m. EST. Proposals should be submitted to:

Michael Pasquariello, Executive Director
Somerville Retirement Board
323 Broadway
Somerville, MA 02145

A contract will be awarded and stated in accordance with the provisions of M.G.L. Chapter 32 Section 23B and Chapter 176 of the Acts of 2011.

The Somerville Retirement Board reserves the right to reject any and all bids. Late proposals will be rejected.

Any questions related to this proposal, please call the Retirement Office at (617) 764-3811 or email at [email protected]

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Updated 7/2/2019

In accordance with Massachusetts General Law Chapter 32, Section 23B the Somerville Retirement Board voted to cancel the Emerging Markets Request for Proposals (RFP) at the June 27, 2019 Somerville Retirement Board meeting. The cancellation of the Emerging Market RFP serves the best interest of the Somerville Retirement System. (View Notice)

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Updated 11/7/2018

Somerville Retirement Board Now in New Office Location

Somerville Retirement Board
323 Broadway
Somerville, MA 02145

Main Phone: (617) 764-3811.

Direct Dial Phone Numbers:

• Michael Pasquariello (617) 764-3807 
• Juanita Escobar (617) 764-3806 
• Karen Marchant (617) 764-3808 

Fax: (617) 591-3211 

Staff Members

• Michael Pasquariello, Executive Director – (617) 764-3807
• Juanita Escobar, Deputy Director – (617) 764-3806
• Karen Marchant, Admin Assistant – (617) 764-3808

Retirement Board Members

• Edward F. Bean, Chairman
• Tom Ross, Vice Chairman
• Alex Nosnik, Mayoral Appointee
• John M. Memory, Elected Member
• Thomas Ross, Elected Member
• (Vacancy)

Investments

• Portfolio Investment Charts
• Investment Return History

Budgets

• Retirement Board Budget - 2019

Meeting Agendas & Minutes
 

Reports

• Actuarial Valuation Report - 2017
• Quarterly Budget vs. Actual Report
• Annual Statement - 2018

Retirement Board Member Elections PERAC Guidelines
 

Massachusetts Association of Contributory Retirement Systems (MACRS)
 

Public Employee Retirement Administration Commission (PERAC)
 

Key Retirement Addresses and Phone Numbers

NOTICE (3/8/2018): The Somerville Retirement Board has decided to issue and require the Affidavit of Retired Members and Beneficiaries every other year, effective immediately. The Affidavit of Retired Members and Beneficiaries will NOT be mailed to retirees and required in 2018. The next time the Affidavit of Retired Members and Beneficiaries will be mailed will be in the Spring of 2019. 

 

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The Somerville Retirement plan is a Contributory Defined Benefit (DB) Plan, governed by Massachusetts General Law Chapter 32 and regulated by the Public Employee Retirement Administration Commission (PERAC). PERAC conducts independent audits of the retirement system every 2-3 years and also reviews all final retirement calculations.

Important Links

• Employee Self-Service
• Forms and Guides
• Pension Payment Schedule
• Mass Retirees Association
• Fossil Fuel Divestment Information
• Windfall Elimination Provision
  • Overview (via the Social Security Administration)
  • MassRetirees Article
• Government Pension Offset
• Social Security
  • SocialSecurity.gov
  • Understanding Social Security Benefits
  • How to Apply Online for Social Security Benefits
  • How to Create a Social Security Account Online
  • How Your Retirement Benefit is Figured

Vesting

Vesting is the establishment of the right to a retirement allowance. It enables a member who becomes inactive to leave his or her retirement deductions/contributions on deposit with the retirement system in order to qualify for a retirement allowance upon attaining age fifty-five (55) or greater. Members become vested after 10 years of creditable service.

Superannuation is the process of being retired upon reaching a certain age and meeting other requirements, including the length of creditable service. (This applies to non-disability retirement.)

The Retirement Allowance in the DB plan is based on a members’ age at retirement, years of creditable service, the average dollar amount of regular compensation, and group classification. The maximum benefit rate is 80%.

Regular Compensation does not include Overtime, detail pay, housing, clothing, commissions, automobile usage, travel or severance.

The Retirement Allowance is comprised of 2 components: Annuity and Pension.

• Annuity: Represents the return of your weekly retirement contributions/deductions and interest during your years of creditable service/career. (The monthly annuity portion of allowance is based upon an annuity factor from an IRS actuarial table.)
• Pension: The difference between total retirement allowance defined and the annuity portion.

Eligibility

Membership Prior to 4/2/2012: At any age with 20 years of creditable service.

Membership Prior to 1/1/1978: Upon reaching age 55, no minimum service (vesting) requirements.

Groups 1 and 2: Membership on or after 1/1/1978, 10 years of creditable service, and be age 55 or older.

There is no minimum service requirement for individuals in Group 4 retiring under Section 5, Superannuation. The law requires that a member of Group 4 be at least 55 years old and be a Member in service in order to retire pursuant to Section 5 (Superannuation) of Chapter 32.

The average of the highest 3 consecutive years of Regular Compensation is used in calculating the retirement allowance.

Membership after 4/2/2012:

• Group 1: 10 years of creditable service and age 60 or older.
• Group 2: 10 years of creditable service and age 55 or older.
• Group 4 (Public Safety, Police & Fire): age 55 or older (performed the duties of group 4 position for at least 12 months immediately prior to termination or retirement).

The average of the highest 5 consecutive years of Regular Compensation is used in calculating the retirement allowance.

3 Lifetime Retirement Allowance Options (Referred to as Options:  A, B, and C:

• A – Retiree receives a full retirement allowance as long as you live. No beneficiary.
• B – Select a beneficiary (anyone/charity/institution); receive lifetime retirement allowance which is approximately 1-5% less than Option A. Upon death, your surviving beneficiary receives the remaining balance in the annuity account. (after approximately 12 - 13 years $0 balance)
• C – Select only ONE (1) beneficiary. The beneficiary must be a Family member (spouse, parent, child or sibling) and cannot be changed. You receive lifetime retirement allowance which is approximately 7-15% less than Option A. Upon death, your designated surviving beneficiary receives 2/3 of the allowance that was being paid at the time of death for the remainder of the beneficiaries’ lifetime. Pop up to Option A if beneficiary passes first.

Superannuation post retirement earnings are limited if you return to the Public Sector;  you can NOT exceed either 960 hours or the difference between the salary currently being paid for the position from which you retired and your retirement allowance In a Calendar Year. After you have been retired for 1 full calendar year, add $15,000. to the calculation.
There are NO limitations if you work in the Private sector.

Superannuation retirees working in the public sector in Massachusetts (state, county, municipal, city, town, district or authority) are limited to how much they can earn and how many hours they can work in a calendar year. If you are receiving a public pension or retirement allowance you can work up to 960 hours per year and earn the difference between the current salary of the position you retired from and your pension. After you have been retired a full calendar year (January - December), you can earn an additional $15,000 per calendar year. It is your responsibility to inform your employer that you are receiving a pension. You are also responsible for monitoring the hours you work and your earnings. This limitation does not apply to survivor benefits. This limitation also does not apply if you are a superannuation retiree working in the private sector. 

Disability retirees have additional limitations and reporting requirements. All disability retirees, including those retired under accidental disability, are required by law (M.G.L. c. 32, § 91A) to submit a statement of their annual earnings. PERAC mails disability retirees an Annual Statement of Earned Income every January which they must complete on or before April 15th of each year. All pertinent W-2 forms, 1099 forms, other requested tax forms and proof of income, and any other documentation requested by PERAC must be included with the statement. 

If you are receiving a disability public pension or retirement allowance you can earn the difference between the current salary of the position you retired from and your pension plus an additional $15,000 per calendar year. It is your responsibility to inform your employer that you are receiving a pension. You are also responsible for monitoring the hours you work and your earnings. 

• PERAC Disability Retiree Earned Income Worksheet

If you exceed your allowable earnings amount, you must refund the excess amount to the Somerville Retirement Board.

In addition to the compensation limits calculation, retirees are also limited in public sector post retirement employment by total hours in a calendar year. No retiree is allowed to work in excess of 960 hours, in the aggregate, from all such public sector employment, during a calendar year. Any such employment beyond this hourly limit would be considered excess earnings.

Superannuation retirement allowance is Taxable Federally, but NOT taxable to the State of MA.

Please visit the Employee Self Service Portal in order to review contact, beneficiary, 1099-R, and monthly paycheck information.

On an annual basis, the Board will vote on a Cost of Living Adjustment (COLA), effective each July 1st. The Maximum per law is 3% of the first $14,000. ($420. Pere year). Retirees become eligible for the COLA after being retired for 1 year.

Retirees are paid monthly on the 2nd to last business day of each month. View the Pension Payment Schedule for a list of payment dates.

• Employee Self-Service
• Retirement Guides for Public Employees...
  • Who Became Members On/After 4/2/2012
  • Who Became Members Before 4/2/2012
• ​​Forms and Guides
• Disability
  • Disability Retirement Overview
  • Disability Retirement Application
  • Treating Physician's Statement on Disability
  • PERAC Disability Forms
• Social Security
  • SocialSecurity.gov
  • Understanding Social Security Benefits
  • How to Apply Online for Social Security Benefits
  • How to Create a Social Security Account Online
  • How Your Retirement Benefit is Figured
  • Windfall Elimination Provision
    • 2018 Article
  • MassRetirees Article on Windfall Elimination Provision 
  • Overview (via the Social Security Administration)
  • MassRetirees Article on Social Security
• Fossil Fuel Divestment Information
• Retirement Group Charts (Download XLS)

The Somerville Retirement plan is a Contributory Defined Benefit Plan, governed by Massachusetts General Law Chapter 32 and regulated by the Public Employee Retirement Administration Commission (PERAC). PERAC conducts independent audits of the retirement system every 2-3 years and also reviews all final retirement calculations.

Membership in the City Somerville Retirement plan is mandatory immediately upon the commencement of employment for all permanent, full-time employees (working a minimum of 20 hours per week), with the exception of school teachers. The pensions of school teachers are administered by the Massachusetts Teachers’ Retirement Board. Para-Professionals are in the City of Somerville Retirement System.

All new Employees/Members must complete and return to the Retirement Office a New Member Enrollment Form and a Beneficiary Selection Form and provide a copy of their birth certificate.

Any individual who is transferring from another Massachusetts Chapter 32 retirement system, please ensure that you list your previous Massachusetts public retirement system membership on page 1 of your New Member Enrollment Form in order for Somerville Retirement Office to request the transfer of your funds and creditable service from the previous municipality.

Members make retirement contributions, through payroll deductions, at 9% (since 7/1996), plus 2% in excess of $30,000.00 ($576.93 weekly) of their Regular Compensation into their Annuity Account on a pre-tax basis. Regular Compensation does NOTinclude overtime, housing, clothing, commissions, detail pay, automobile usage, travel and severance.

Group Classification

Members are classified as follows:

• Group 1: officials and general employees including clerical, administrative and technical workers, laborers, mechanics and all others not otherwise classified.
• Group 2: certain employees with hazardous occupations such as ambulance attendants, mental health hospital attendants, and licensed electricians.
• Group 4: public safety officers, officials and employees such as police officers, fire fighters and certain correction officers.

Your Annuity Account is portable. Upon termination from service with the City of Somerville you may withdraw, rollover to an IRA or transfer (with creditable service) your funds to another Massachusetts Chapter 32 Retirement System. Individuals that withdraw their funds will be subject to 20% Federal tax withholding and may be subject to an additional 10% Federal tax if you are under age 59 1/2.

• Application for Withdrawal of Accumulated Total Deductions

Vesting

Vesting is the establishment of the right to a retirement allowance. Vesting enables a member who becomes inactive to leave his or her retirement deductions/contributions on deposit with the retirement system in order to qualify for a retirement allowance upon attaining age fifty-five (55) or greater. Members become vested after 10 years of credible service.

Eligibility

Membership Prior to 4/2/2012: At any age with 20 years of creditable service.

Membership Prior to 1/1/1978: Upon reaching age 55, no minimum service (vesting) requirements.

Groups 1 and 2: Membership on or after 1/1/1978, 10 years of creditable service, and be age 55 or older.

There is no minimum service requirement for individuals in Group 4 retiring under Section 5, Superannuation. The law requires that a member of Group 4 be at least 55 years old and be a Member in service in order to retire pursuant to Section 5 (Superannuation) of Chapter 32.

The average of the highest 3 consecutive years of Regular Compensation is used in calculating the retirement allowance.

Membership after 4/2/2012:

• Group 1: 10 years of creditable service and age 60 or older.
• Group 2: 10 years of creditable service and age 55 or older.
• Group 4 (Public Safety, Police & Fire): age 55 or older (performed the duties of group 4 position for at least 12 months immediately prior to termination or retirement).

The average of the highest 5 consecutive years of Regular Compensation is used in calculating the retirement allowance.

Superannuation is the process of being retired upon reaching a certain age and meeting other requirements, including length of creditable service. (This applies to non-disability retirement.)

A members’ monthly Defined Benefit (DB) retirement allowance is calculated based on a formula which includes the member’s age at retirement, years of creditable service and average annual rate of regular compensation. The maximum benefit allowable cannot exceed 80% of the average of regular compensation. The monthly benefit consists of annuity and pension.

Options Upon Retirement

Upon applying for Superannuation Retirement benefits, the member will select one of following three lifetime retirement allowance options:

• Option A provides the highest payment to the retiree for their lifetime, with no payments after the retiree’s death to a survivor.
• Option B provides a reduced lifetime allowance (approx. 1-3% less than Option A), terminating at the death of the retiree, with the balance of the amount contributed to the system by the retiree (Annuity Account) paid to the retiree’s beneficiary or beneficiaries of record in a one-time lump sum payment.
• Option C provides a reduced payment (approximately 8% - 13% less than Option A) during the retiree’s lifetime. A survivor benefit equal to 2/3 of the allowance of the allowance would be paid upon the retirees passing. The beneficiary must be an immediate family member, spouse, child, mother, father, sister, brother, or un-married ex-spouse. Should the beneficiary pre-decease the retiree, then the retiree would Pop-up to Option A.

Application Process

If you are a member in service or on an authorized leave of absence, you can apply to the Retirement Board no earlier than four months before your intended effective date of retirement.

The Board may ask you to submit birth certificates for you and your spouse, a marriage certificate, veteran discharge papers (DD 214), affidavit of marital status and any divorce decrees.

Once the application is submitted, the Retirement Board must await the final payroll from the member’s department to be processed. The initial monthly retirement payment may be up to 8 weeks from the date of retirement (retroactive to the effective date of retirement). Retirement allowance checks are payable on the second to last business day of each month.

Please visit the Employee Self Service Portal in order to review contact, beneficiary, service history and retirement deduction information and generate Superannuation retirement estimates.

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.