The Marblehead Contributory Retirement System is one of 106 state retirement systems providing a defined benefit plan for public employees in Massachusetts. The Marblehead system has over 900 retired and active members. Members’ contributions, combined with employer contributions, are invested by the Massachusetts Pension Reserve Investment Management Board (PRIM).
The Board of Retirement meets once a month, unless additional meetings are needed.
The Marblehead Retirement System offers its retirees the option of Electronic Funds Transfer, a safe and convenient way to receive a retirement allowance.
Electronic Funds Transfer allows for the monthly retirement allowance to be electronically deposited into the retiree’s bank account, eliminating the possibility of the check being lost or stolen.
100% of the system’s retirees now receive their retirement allowance this way.
Most retirement benefits are subject to federal income taxes.
At the time of your retirement, you will be required to complete a W-4P Federal Tax Form, also known as Withholding Certificate for Pension or Annuity Payments.
This form will instruct us as your pension payer, how much federal tax to withhold from your monthly benefit.
You may change your federal tax withholding status at any time by completing a W-4P Form and filing it with the Retirement Office.
Military Service Prior to Public Employment
Members who have served in the United States Armed Forces, prior to their membership in the Marblehead Contributory Retirement System, may be entitled to purchase up to four years of that service towards their retirement benefits.
In order for us to determine your eligibility, members must complete the Notice of Potential Benefits Pursuant to G.L.ch 32 section 4(1)(h) and return to the Marblehead Retirement Office no later than 180 days from the date of becoming a member of the retirement system.
Military Service During Public Employment
If you serve in the armed forces of the United States while an active member of the Marblehead Contributory Retirement System, you may be entitled to receive creditable service during your leave of absence if the following applies:
- You return to your employment after your active duty is completed.
- You have served honorably.
To ensure that you receive proper creditable service for your active duty, please provide the Marblehead Retirement Office with an updated DD214 form upon your return.
For more information & forms, visit the official website of the Public Employee Retirement Administration Commission.
How Benefits are Determined
Your benefits are determined according to the following formula: Your Highest Three Year Average Annual Rate of Regular Compensation x Your Benefit Rate x Your Creditable Service.
“Regular Compensation” Description
Regular compensation consists of your salary, wages or other compensation, in whatever form, lawfully determined for the individual service of the employee. Regular compensation does not include bonuses, overtime, severance pay for any and all unused sick leave, early retirement incentives or any other payment received as a result of giving notice of your intention to retire.
“Benefit Rate” Determination
Your benefit rate is determined by your age at retirement (as of your last birthday) and your group classification.
“Group Classification” Determination
Your group classification is determined by the job you held.
- Group 1: Elected officials and general employees, including clerical, administrative, technical workers, laborers, mechanics and all others not otherwise classified.
- (Please refer to Group 1 Before April 2, 2012 Percentage Chart.)
- (Please refer to Group 1 After April 2, 2012 Percentage Chart.)
- Group 2: Certain employees with hazardous occupations such as ambulance attendants, electricians and mental health hospital attendants.
- Group 3: State police officers.
- Group 4: Public safety officials such as police officers, fire fighters and certain correction officers.
- (Please refer to Group 4 Retirement Percentage Chart.)
Benefit Rate Chart
Using your age and group classification, your benefit rate can be found on the Benefit Rate Chart below.
Benefit Rate Chart
Percentage of Average Annual Rate of Regular Compensation
The maximum benefit is 80% of the highest three years average rate of regular compensation. Your age factor times the number of years of service determines this percentage.
For example, if a group 4 member retires at age 54 with 25 years of creditable service, the calculation would be: 2.4% x 25 = 60% of the three year average rate of compensation.
| Retirement Age | Group 1 | Group 2 | Group 4 |
|---|---|---|---|
| 65 or over | 2.5 | 2.5 | 2.5 |
| 64 | 2.4 | 2.5 | 2.5 |
| 63 | 2.3 | 2.5 | 2.5 |
| 62 | 2.2 | 2.5 | 2.5 |
| 61 | 2.1 | 2.5 | 2.5 |
| 60 | 2.0 | 2.5 | 2.5 |
| 59 | 1.9 | 2.4 | 2.5 |
| 58 | 1.8 | 2.3 | 2.5 |
| 57 | 1.7 | 2.2 | 2.5 |
| 56 | 1.6 | 2.1 | 2.5 |
| 55 | 1.5 | 2.0 | 2.5 |
| 54 | 1.4 | 1.4 | 2.4 |
| 53 | 1.3 | 1.3 | 2.3 |
| 52 | 1.2 | 1.2 | 2.2 |
| 51 | 1.1 | 1.1 | 2.1 |
Government Pension Offset (GPO) & Windfall Elimination Provision (WEP)
Benefits paid under the provisions of Chapter 32 may offset your Social Security benefits. For additional details, please refer to the Government Pension Offset and the Windfall Elimination Provision pages on the Social Security Administration website below.
A law that affects spouses and widows or widowers.
If you receive a retirement or disability pension from a federal, state, or local government based on your own work for which you didn’t pay Social Security taxes, we may reduce your Social Security spouses or widows or widowers benefits. This fact sheet provides answers to questions you may have about the reduction.
Your Social Security retirement or disability benefits can be reduced.
The Windfall Elimination Provision can affect how we calculate your retirement or disability benefit. If you work for an employer who doesn’t withhold Social Security taxes from your salary, such as a government agency or an employer in another country, any pension you get from that work can reduce your Social Security benefits.
Return of Accumulated Deductions
When an individual becomes a member of the Marblehead Retirement System, he or she is asked to designate a beneficiary who will receive the member’s accumulated retirement deductions in one sum if he or she dies as a member-in-service. This designation is generally effective unless the member leaves survivors whose rights are superior by law.
There is no limitation on who members may choose as their beneficiary(ies). The member may change his/her designation at any time by completing a Beneficiary Change Form.
Lifetime Allowance to a Surviving Family Member
Members also have the right to choose an option D beneficiary upon becoming a member of the Marblehead Retirement System. If a member dies as a member-in-service, an Option D benefit will provide the member’s designated beneficiary with an allowance for their lifetime. However, if the member does not designate an Option D beneficiary and if his/her eligible spouse does not elect to receive the Option D benefit, the member’s accumulated deductions will be paid in a lump sum to his/her surviving beneficiary of record and no lifetime allowance can be paid.
Members may designate only one Option D beneficiary. The eligible beneficiaries are limited to a member’s spouse, the member’s former spouse (provided he or she has not remarried at the time of being designated, the member’s child, parent or sibling. A member may change his /her Option D beneficiary designation at any time by completing a Beneficiary Change Form. It is important to remember whom one’s Option D beneficiary is because changes in personal circumstances will not automatically alter the designation. The Option D beneficiary will remain the same until a new Beneficiary Change Form is received by the Marblehead Retirement Board.
An Option D designation has a serious and lasting legal impact unless a member cancels it, a member’s designated beneficiary predeceases the member, a member retires, a member’s surviving beneficiaries are eligible to receive an accidental death benefit or a member’s eligible surviving spouse supersedes the member’s designation.
Visit the official website of the Public Employee Retirement Administration Commission for more information & forms.
Frequently Asked Questions
Pension benefits are mailed on the second to the last day of each month. If the last day of the month is a Saturday or Sunday, the benefits will be mailed on the previous Thursday. If you have registered for direct deposit, your benefits will be electronically transferred to your bank account on the last day of each month. If the last day of the month is a Saturday or Sunday, your benefits will be credited to your account on the previous Friday.
The term “vesting” is used to signify the employees right to a retirement allowance at a later date. “Vested” benefits are those benefits to which a member is entitled to today.
A member must have ten years of creditable service and be age 55 or have at least twenty years of creditable service to retire at any age.
Your benefits are determined according to the following formula: Your Highest Three Year Average Annual Rate of Regular Compensation X Your Benefit Rate X Your Creditable Service.
Social Security Offsets