This email is to remind you of an important change to retirement-eligible pay (“regular compensation”) for members receiving workers’ compensation that we first notified you about in April 2023. It should be shared with employees who process payroll and your affected MTRS members.
After a lengthy appeal process, the Massachusetts Supreme Judicial Court made a final ruling that supplemental payments, such as sick or vacation pay, made in conjunction with workers’ compensation payments are not “regular compensation” under Massachusetts public retirement law.
Therefore, if you have an employee who is out on workers’ compensation (not working) and is receiving any form of supplemental pay, you cannot take retirement deductions from the supplemental compensation. Deductions taken from supplemental pay should have ceased last Spring, but we are still seeing deductions being taken on this type of pay.
Please note that you should continue to take deductions from sick, vacation or personal leave not associated with workers’ compensation supplemental pay. You should also continue to take deductions from sick, vacation or personal leave when a member is working part-time and simultaneously receiving workers’ compensation under Section 35 for partial incapacity.
Since July 2022 we have asked employers to provide information about workers’ compensation on Part 2 of the retirement application and have been using this information to correct our records. MTRS is still in the process of developing a plan of action regarding active employees. In the meantime, when you have an employee receiving workers’ compensation benefits please complete and return this form to your assigned Employer Reporting Analyst.
The MTRS has filed legislation to restore the practice of allowing members to use supplemental pay while receiving workers’ compensation payments. As you know, the legislative process is unpredictable and therefore, we are unable to predict whether the legislature will make any changes regarding the issue in the future.
Questions?
Please contact your assigned Employer Reporting Analyst.