The Retirement Board is responsible for providing City employees and retirees with information regarding retirement benefits and regulations.
To provide accurate, timely, and consistent guidance and benefits to members and their beneficiaries in a courteous and professional manner.
To ensure that the investment portfolio is adequately diversified at an acceptable risk level to provide sufficient assets to fund the benefits when due.
To become a retirement benefits leader in member counseling and benefits delivery by embracing technology, supporting staff development, and focusing on member needs.
The Holyoke Contributory Retirement System is one of 105 contributory retirement systems within the Commonwealth of Massachusetts. Chapter 32 of the Massachusetts General Laws defines the benefits, contribution requirements, accounting procedures and funding for all 105 systems. The Public Employee Retirement Administration Commission (PERAC) oversees the systems and ensures that all boards are in compliance with Chapter 32.
The retirement system is funded by an annual appropriation from City departments and from employee contributions. These funds are invested in fixed income, domestic and international equities, commodities, private equity and real estate.
The Holyoke Retirement Board is responsible for providing all city employees with information regarding benefits and regulations pertaining to retirement, in addition to overseeing the administration of the office. The Board is made up of 5 members; an Ex-Officio member, 2 elected members, 1 member appointed by the Mayor, and 1 member appointed by the other 4 members.
No posts found.
John T. McCarthy, Chairman, Elected Member – term expires June, 2016
Daniel R. Owens, Elected Member - term expires June, 2017
Michele Aubrey, Appointed Member - term expires February, 2018
Bellamy H. Schmidt, Appointed Member - term expires January, 2017
Click below to access 2015 Direct Deposit Calendar. Your benefit will be deposited into your account on the BLUE dates.
Click below for Direct Deposit Authorization Form.
For a quick estimate of your retirement allowance, click on the appropriate chart below:
For Membership after 4/2/2012:
IS MEMBERSHIP REQUIRED FOR ALL NEW EMPLOYEES?
Membership is mandatory by state law for nearly all public employees who are regularly and permanently employed on a full-time basis. Part-time (less than 20 hours per week), seasonal and temporary employees who are ineligible for membership are required to contribute to a deferred compensation plan.
FOR WHOM IS MEMBERSHIP OPTIONAL?
Elected officials may elect to become members within 90 days of commencement of service.
WHAT ARE GROUP CLASSIFICATIONS?
- Group 1 members are officials and general employees included clerical, administrative and technical workers, laborers, mechanics and all others not otherwise classified.
- Group 2 includes ambulance attendants and fire alarm operators
- Group 4 consists of public safety officers, such as policemen and firefighters, and certain employees with hazardous occupations.
HOW MUCH DO MEMBERS CONTRIBUTE?
Contribution rate is determined by your most recent entry into the system. Members who re-enter with funds on deposit or who transfer from another contributory retirement system within Massachusetts maintain their former contribution rate.
Before January 1, 1975 5%
After January 1, 1975 7%
After January 1, 1984 8%
After July 1, 1996 9%
**Employees hired after January 1, 1979 will pay their regular contribution rate plus an additional 2% on any compensation over $30,000.
WHAT IS THE INTEREST RATE CREDITED TO MY ACCOUNT?
The interest rate is statutorily set by PERAC by averaging pass book savings account rates as of January 1st of the year in question.
HOW IS CREDITABLE SERVICE ACHIEVED?
In general, you earn creditable service toward your retirement allowance for the period during which you made contributions to your annuity savings account in the retirement system. It is prorated based on the hours worked versus full-time.
WHAT EFFECT DOES TRANSFERRING HAVE ON MY CREDITABLE SERVICE AND ACCUMULATED DEDUCTIONS?
Career changes of public employees may entail a transfer from a job presently held to a new job in a different governmental unit with a different retirement system. The accumulated total deductions (or annuity savings account) and corresponding creditable service of members involved in such a change will be transferred to the new retirement system.
ARE ALL FORMS OF COMPENSATION FROM MY EMPLOYER SUBJECT TO RETIREMENT WITHHOLDINGS?
No, not all payments are considered regular compensation. Examples of payments not considered to be regular compensation:
- commissions bonuses, other than cost of living bonuses
- amounts derived from salary enhancements or salary augmentation plans
- indirect, in-kind or other payments for such items as housing or lodging, travel, clothing allowances, and annuities
- welfare benefits
- lump sum buyouts for Workers’ Compensation
- job-related expense payments
- automobile usage
- insurance premiums
- dependent care assistance
- one-time lump sum payments in lieu of or for unused vacation or sick leave
- payment for termination, severance, dismissal
- any amounts payable as premiums for working holidays (certain employees excepted)
- early retirement incentives
- any other payment made as a result of the employer having knowledge of the member’s retirement
- payments in kind
- all payments other than payment received by an individual from his employing unit for services rendered to such employing unit, regardless of taxability
WHAT IF ABSENCE IS CAUSED BY A WORK RELATED INJURY OR HAZARD?
Any member-in-service who sustains an injury or undergoes a hazard in the course of employment which results in total incapacitation for which workers’ compensation benefits are received, is awarded full creditable service during the period of absence. The member receives the creditable service without having to contribute to the retirement system.
WHAT ABOUT LEAVES OF ABSENCE FOR OTHER REASONS?
For absences other than work related, the member’s creditable service will be prorated.
CAN I BORROW MONEY FROM MY RETIREMENT ACCOUNT?
NO! Under state law, your retirement account has no provisions for withdrawal under any circumstances.
WHAT HAPPENS IF I QUIT MY JOB?
At the time of termination, you must file for a refund of your annuity savings account. You may come to the Retirement Board office or download the application form, (http://www.mass.gov/perac/forms/1003ApplicationforWithdrawal.pdf) complete and mail in. However mailed in forms must be NOTARIZED.
If you voluntarily terminate your public service with at least ten years of creditable service, or if you are involuntarily terminated, you will receive 100% of the regular interest that has accrued to your Annuity Savings Account.
If you voluntarily terminate your public service with less than ten years of service, you will receive interest on your Annuity Savings Account at the annual rate of 3%.
WILL I BE TAXED ON THIS REFUND?
There will be 20% deducted for federal tax if you take a direct refund of your deductions rather than directly rolling them over into another qualified retirement plan; i.e. an IRA. If you are under age 59 ½ the IRS will also impose an additional 10% penalty.
MAY ANY AGENCY INTERCEPT MY REFUND?
An individual’s ability to obtain a refund may be affected by a Department of Revenue Child Support Enforcement Order.
IS ANYONE INELIGIBLE TO APPLY FOR A REFUND?
You may not request a refund if:
- You continue to be a member-in-service;
- You are on an official leave of absence;
- You have a Workers’ Compensation claim pending or if you are receiving Workers’ Compensation benefits for total incapacity;
- You have been charged with, or convicted of, misappropriation of funds or property of the governmental unit by which you were employed;
- You are appealing a dismissal or you have otherwise expressed your intent to continue in public employment.
MAY I BUY BACK CREDITABLE SERVICE?
If you terminate your public service and take a refund of your accumulated total deductions and later return to public service, you may re-establish your prior creditable service by buying it back. But, you will begin as a new member, making contributions at the current rate. Of note, if a person who is a member of a retirement system as of February 16, 2012 fails to buy back certain prior service before April 2, 2013, such a member will have to pay actuarial assumed interest instead of buy back interest on the purchase. Those who re-enter or re-establish service on or after February 16, 2012 will also have until April 2, 2013 to buy back certain prior service, or they must pay actuarial assumed interest instead of buy back interest on the purchase.
WHEN MAY I COLLECT MY RETIREMENT?
If you membership began prior to April 2, 2012, you are eligible for a retirement allowance when you have at least 10 years of creditable service and are 55 years old, or if you have 20 years of service at any age. If your membership began after April 2, 2012, you are eligible with 10 years of service at age 60.
WHAT IS SUPERANNUATION?
“Superannuation” is the term which is used to describe the process of being retired upon reaching a certain age and meeting other requirements, such as length of service.
WHEN CAN I FILE FOR RETIREMENT?
You may receive retirement counseling at any time. However, retirement papers may not be accepted any sooner than 120 days before you plan to retire. You can also file for retirement up to 60 days after you leave employment. You can file after 60 days, but your benefits will not be retroactive to your termination date.
WHAT IS MY RETIREMENT ALLOWANCE?
Your retirement benefit is made up of 2 parts. The ANNUITY portion is based on the total amount of your annuity savings or accumulated deductions and your age on the date of your retirement. The City of Holyoke makes up the difference between the retirement benefit provided by law and what is provided by your annuity. That difference is called the PENSION.
ANNUITY + PENSION = RETIREMENT ALLOWANCE
WHAT FACTORS AFFECT THE AMOUNT OF MY RETIREMENT ALLOWANCE?
The amount of your retirement allowance depends on:
- Your age;
- Your length of service;
- Your group classification;
- Your salary.
If your membership began prior to April 2, 2012, an average of the 3 highest consecutive years of regular compensation is used in the calculation. If you became a member after April 2, 2012, an average of 5 years is used.
HOW IS MY BENEFIT CALCULATED?
Under the provisions of M.G.L. Chapter 32, the basic formula for calculating a superannuation retirement is:
Benefit Rate X Avg. of Highest 3 (or 5) Years Salary X Cred. Service = Retirement Allowance
WHAT IS MY BENEFIT RATE?
Your age at retirement and your group classification determine your benefit rate. The benefit rate is a specific percentage of the amount of your average annual rate of regular compensation. Click to see the percentages used in the formula which are specified in Chapter 32.
Benefit Rate for membership prior to April 2, 2012 Click Here
Benefit Rate for membership on or after April 2, 2012 Click Here
WHAT ARE MY OPTIONS?
“Options” is the term used to describe how your retirement allowance is allotted. Your benefit must be paid to you in lifetime monthly payments, but the apportionment of those payments will differ depending on your option selection. Option choice also determines what benefits, if any, will be paid to survivors after a retiree’s death.
Election of Option A means that you will receive the full retirement allowance in monthly payments as long as you live. All allowance payments will cease upon your death and no benefits will be provided to your survivors.
Option B provides you with a lifetime allowance which is 1-3% less per month than Option A. The annuity portion of your allowance is reduced to allow a lump sum benefit for your beneficiary. Upon your death, your surviving beneficiary(ies) of record will be paid the unexpended balance of your annuity savings account. Although your retirement allowance is not reduced because of a depletion of your annuity savings, generally your accumulated deductions will be used up within 8 to 12 years.
Option C is also known as the joint or last survivor allowance. Selecting this option means that the allowance payments which you will receive during your lifetime will be 10-12% lower than those you would receive under Option A. Upon your death, your designated beneficiary will be paid a monthly allowance for the remainder of his or her lifetime. The allowance will be equal to 2/3 the allowance which was being paid to you at the time of your death.
DOES OPTION B LIMIT MY CHOICE OF BENEFICIARY?
You may designate any person(s) or charity or institution as your beneficiary. You may at any time after retirement change your Option B beneficiary.
WHO MAY I NAME AS BENEFICIARY UNDER OPTION C?
Eligibility is determined at the time of retirement. Only one beneficiary may be named under Option C and is limited to your spouse, your former spouse who has not remarried at the time you designated him/her as your beneficiary, your child, parent or sibling.
MAY I CHANGE MY OPTION C BENEFICIARY?
You may NOT change your Option C beneficiary once your retirement becomes effective.
WHAT IF MY OPTION C BENEFICIARY DIES BEFORE I DO?
If your Option C beneficiary dies before you do, you will thereafter be paid the full retirement allowance you would have received had you selected Option A at the time of your retirement. This conversion is commonly referred to as the Option C “Pop-Up.” All payments cease upon your death.
DOES DIVORCE FOLLOWING RETIREMENT ALTER THE STATUS OF MY SPOUSE AS MY OPTION C BENEFICIARY?
No, spouses who are the designated beneficiaries of Option C retirees and who become divorced from the member following the member’s retirement do not lose their eligibility as beneficiary.
WHEN MUST I MAKE MY OPTION SELECTION?
You must make your selection on or before the date your retirement allowance becomes effective. If you refuse or fail to select an option before the effective date, the law provides that you shall be retired under Option B.
WHAT ABOUT WORKING AFTER RETIREMENT?
There are no limitations if you work in the private sector. However, if you are re-employed in the service of the Commonwealth or any of its counties, cities or towns, there are 2 strict limitations on further public employment. Your earnings in the first year of retirement when added to your retirement allowance cannot be greater than the salary currently being paid for the position for which you retired. After the first year of retirement, $15,000 may be added to this figure. You cannot work more than 960 hours in a calendar year. Your employment must cease when either limitation is reached, or your retirement allowance must be waived.
Under the provisions of Chapter 32, Section 91, you are limited in the amount of income you earn or receive from other sources after retirement for superannuation only if you are re-employed in the service of the Commonwealth or any of its counties, cities, towns, districts or authorities. Employment in the private sector has no restrictions.
Your earnings for the period of post-retirement employment in any calendar year, when added to your retirement allowance, cannot be greater than the salary currently being paid for the position from which you retired plus $15,000. The additional $15,000 is not utilized in the calculation in the first year following retirement.
- Your post-retirement employment is also limited to a period of up to 960 hours, in the aggregate, in any calendar year.
- Your employment must cease when either limitation is reached.
- A retiree can waive his or her retirement allowance and these limitations would not apply.
- Section 91 applies to both superannuation and disability retirees and to any public employment, regardless of whether or not it occurs in the same governmental unit from which the employee retired.
- It is irrelevant whether an employee-retiree chooses to classify him or herself as a “consultant” or “independent contractor”— the § 91 earnings limitations still apply if in fact the nature of the relationship is as an employee.
- For persons who retire after July 1, 2009, earnings as a consultant or an independent contractor are limited.
- A retiree may not avoid the limitations in §91 by forming a company if the primary reason for the formation is to avoid the limitations.
- Earnings for “details” which are paid by city or town payroll are included in the § 91 limitations, regardless of whether the city or town ultimately bills a private entity for the work.
- The § 91 limitations apply only to retirees, not survivors or beneficiaries.
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The Holyoke Retirement Board is providing this information to assist active members when completing the member’s Beneficiary Selection Form. The public employee retirement statute, Chapter 32 of the Massachusetts General Laws, is notoriously complex, and the information contained herein is not a substitute for competent legal advice. Various sections of Chapter 32 will come into play depending upon whether a member dies as a result of an on-duty injury, or leaves a spouse and minor children.
The member’s Beneficiary Selection Form instructs the Holyoke Retirement Board on the disposition of your retirement benefits in the event that you should die prior to retirement. You have the right at any time prior to retiring to change your beneficiaries.
I. CHOICE OF BENEFICIARY TO RECEIVE A RETURN OF ACCUMULATED DEDUCTIONS AT MEMBER’S DEATH
The first part of the Beneficiary Selection form asks you to name a beneficiary or beneficiaries who, upon your death, will be entitled to receive a one-time payment of your accumulated retirement deductions which have been withheld from your compensation and credited to your account. This is paid in accordance with G.L. c. 32, § 11(2). You can name any person as your beneficiary to receive this benefit. The Board will pay the amount owed to the beneficiary or beneficiaries named on the Beneficiary Selection Form, unless another section of the retirement statute supercedes, as discussed below. This is a lump sum payment without an allowance. The Board cannot return the deceased member’s accumulated deductions to the § 11(2) beneficiary if there is an eligible beneficiary nominated under another section of the law,
§ 12(2)(d), or if there is an eligible spouse, or if there are minor or dependent children.
II. CHOICE OF OPTION D BENEFICIARY
The second page of the form asks you to name a § 12(2)(d) or “Option D” beneficiary. You can name only one Option D beneficiary, and it must be your spouse, child, a former spouse who has not remarried, mother, father, brother or sister. The Option D beneficiary will receive a Member Survivor Allowance for life. There would be no return of the accumulated deductions made to the § 11(2) beneficiary, because the Option D beneficiary’s rights are superior. Some members select a minor child as their Option D beneficiary in order to maximize the retirement benefit.
III. RIGHT OF AN ELIGIBLE SPOUSE
Irrespective of what is stated on the Beneficiary Selection Form, if an active member dies having worked for at least two years and having been married for at least one year, and if the member and spouse were living together, the surviving spouse may elect to receive the Member Survivor Allowance provided in § 12(2)(d). The surviving spouse’s right trumps the right of any other beneficiary named by the member. Thus, a member is entitled to name a young child as the Option D beneficiary, knowing that the surviving spouse can always elect to receive the allowance instead of the child.
IV. COMPLETE BOTH SECTIONS OF THE BENEFICIARY SELECTION FORM
Members should make sure to designate both § 11(2) beneficiary or beneficiaries and a § 12(2)(d) beneficiary. If the member should die as the result of an on-duty injury, the accidental death benefit in § 9 provides that accumulated total deductions shall be paid in a lump sum to the named § 11(2) beneficiary. In addition to the lump sum payment, the Board will pay a lifetime allowance to the surviving spouse or other eligible beneficiary. Thus, accumulated deductions can be paid to one person and an allowance paid to a different person, as long as the member has designated a § 11(2) beneficiary. The member can name a spouse or other eligible beneficiary as both the § 11(2) and § 12(2)(d) beneficiary.
MEMBERS SHOULD BE AWARE OF SOCIAL SECURITY’S OFFSET RULES
If you are entitled to both Social Security and a Massachusetts public pension your Social Security benefit may be reduced.
There are two rules that may reduce your Social Security benefit. One, called the “Government Pension Offset” (GPO) applies only if you receive a government pension from a job not covered by Social Security and are eligible for Social Security benefits as a spouse or widow(er). This offset will reduce the amount of your Social Security spouse’s or widow(er)’s benefit by two-thirds of the amount of your government pension. Here is an example of the GPO: if you receive a monthly pension from the Holyoke Retirement System of $600, two-thirds of that, or $400, must be used to offset your Social Security spouse’s or widow(er)’s benefit. If you are eligible for a Social Security spouse’s or widow(er)’s benefit of $500 monthly, you will receive $100 per month from Social Security after the offset has been applied ($500 – $400 = $100). Depending on the amounts of the two benefits, it is entirely possible that your Social Security spouse’s or widow(er)’s benefit could be completely wiped out by GPO.
The second rule, called the “Windfall Elimination Provision” (WEP) affects the way your own Social Security retirement benefits are calculated when you receive your Massachusetts public pension. This rule affects a worker who spent most of his/her career in Massachusetts public service, but who also worked at other jobs where the worker paid Social Security taxes long enough to qualify for Social Security retirement benefits.
Prior to 1983, employees who spent time in jobs not covered by Social Security received the advantage of a formula under which lower-paid workers received larger benefits in relation to their earnings than higher paid workers. Because of this formula, those who worked only part of their lives in jobs covered by Social Security had their benefits figured as if they were long-term, low-wage workers. These workers received the advantage of the higher percentage Social Security benefits in addition to their public pension. The benefit formula was modified in 1983 to eliminate this inequity.
Here’s how the WEP formula works: Social Security benefits are based on the worker’s average monthly earnings adjusted for inflation. When Social Security computes your benefits, it separates your average earnings into three amounts and multiplies the figures using three factors. For example, for a worker who became 65 in 1995, the first $387 of average monthly earnings is multiplied by 90%; the next $1946 is multiplied by 32%; and the remainder by 15%. In the modified WEP formula, the 90% factor is reduced. For those who reached 62 or become disabled in 1990 or later, the 90% factor is reduced to 40%.
There are some exceptions to this rule. For example, the 90% factor is not reduced if you have 30 or more years of “substantial” earnings where you paid Social Security taxes. If you have 21 to 29 years of “substantial” earnings, the 90% factor is reduced to somewhere between 45 and 85 percent. “Substantial” earnings are a certain amount of yearly earnings required for a year of coverage for this provision.
A guarantee is provided to protect workers with relatively low pension. It provides that the reduction in the Social Security benefit under the modified WEP formula cannot be more than one-half of “that part of the pension attributable to earnings after 1956 not covered by Social Security.”
Members should visit www.socialsecurity.gov to learn more about GPO and WEP. You can also apply for benefits, open a my Social Security account, find publications, and get answers to questions.
Moving outside Massachusetts after Retirement?
Click this link to find out whether or not your retirement allowance is taxable in other states:
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Posted on December 10, 2012 by Cheryl