Retirement and survivor benefits are paid for time already accrued. In other words, the allowance that you receive at the end of January is the payment for January.

As a reminder, direct deposit statements are only mailed when…

• your first direct deposit made;
• there is a change in the amount of your direct deposit from the prior month (for instance, if you change the amount of your federal tax withholding or your insurance premium changes);
• the MTRS needs to inform retirees of new information and prints a special notice on the top portion of the direct deposit statement; and
• the MTRS provides you with your year-end statement in December, showing your complete year-to-date information for the calendar year.

Three notes to recent and soon-to-be retirees

1. While you are an active educator, your health insurance premiums may have been withheld on a pre-tax basis. Please note, however, that the IRS requires that retirees’ insurance premiums be withheld on an after-tax basis.
2. Regardless of the group insurance program you may be offered after your retirement, you should contact your local insurance coordinator approximately three months prior to your effective date of retirement in order to obtain the necessary forms for coverage. Likewise, please review our information on Medicare.
3. An important notice for charter school employees and inactive members: Be aware that school districts have different rules for providing insurance coverage to active members and retired members, and your district may or may not provide you with insurance benefits in retirement. Accordingly, if you are either an employee of a charter school, oryou are not employed by a school district, as soon as you start thinking about retiring, investigate your eligibility for retiree health coverage, as your district’s rules may affect your retirement decisions.

About your health insurance in retirement

Health insurance for retired members of the MTRS is not provided by the MTRS, but, rather, is a local contractual benefit. Most school districts offer continued health insurance to their retirees and either:

• participate in the Retired Municipal Teachers’ (RMT) Program (see list below) or
• offer their own group insurance plan (see Local district coverage below).

How this insurance will be administered depends upon which school system you are retiring from. Since health insurance coverage is a very important issue for you as you consider your retirement, you may want to investigate your options several years prior to your actual retirement.

As you probably know, Massachusetts is one of a handful of “non-Social Security” states. This means that you, as a member of a contributory retirement system, pay into our system instead of Social Security; you do not earn any Social Security “credits” or “quarters” for your MTRS contributions or service. However, you may have earned Social Security credits through other employment. If you are eligible for Social Security benefits, you may be subject to one of two Social Security “double-dipping” laws: the Windfall Elimination Provision and the Government Pension Offset.

IMPORTANT NOTE: All retirees should contact the Social Security Administration to determine their eligibility for social security benefits three months before retirement or three months before age 65, whichever comes first.

FAQs

When I retire, I will have 40 credits (or “quarters”) under Social Security. Will my Social Security pension be reduced because I will receive a pension from the MTRS?

If you have 40 credits (or “quarters”) under the Social Security system (in other words, you are eligible to receive Social Security benefits), then Social Security will use a “modified formula” to calculate your pension unless:

• you had 20 years of creditable service under the MTRS before January 1, 1986 or
• you were age 55 and had at least 10 years of creditable service before January 1, 1986 or
• you will have at least 30 years of “substantial earnings” under the Social Security system. For further information on “substantial earnings,” contact your local Social Security Administration Office or see our page on the Windfall Elimination Provision (WEP).

If you do not meet any of these requirements, you will receive a reduced Social Security pension. In order to determine the amount of the reduction that applies to you, please contact the Social Security Administration at 800-772-1213.

I am expecting to collect a spousal or widow’s benefit under Social Security. Will I receive a reduced benefit since I will be receiving a retirement allowance from the MTRS?

If you expect to collect a spousal or widow’s benefit under Social Security, these benefits may be reduced by two-thirds of the amount of your MTRS retirement allowance. You will be exempt from this “Government Pension Offset” if you meet all the requirements for Social Security spousal benefits in effect in 1977 and;

• you had 20 years of creditable service under the MTRS before December 1, 1982 or
• you were age 55 and had at least 10 years of creditable service before December 1, 1982 or
• you were age 55 or had 20 years of creditable service before July 1, 1983 and you received half support from your spouse.

In all cases, the Social Security Administration requires that male retirees of the MTRS must have received at least half support from their wives to apply for spousal benefits.

Will my Medicare coverage be affected by the Social Security “double-dipping” laws?

No; although your Social Security benefits may be reduced by these two provisions, your Medicare coverage will not be affected. If you believe that, based on your age and/or amount of creditable service with the MTRS, you are exempt from either the Windfall Elimination Provision or the Government Pension Offset, the Social Security Administration will require you to submit a letter from us that states the date on which you met the eligibility requirement. To request this letter, contact us.

IMPORTANT NOTE: The MTRS is not qualified to provide specific advice relative to the federal tax code. You should consult your personal accountant and/or obtain a copy of Internal Revenue Service (IRS) Publication 575, Pension and Annuity Income, to ensure that you are in compliance with all of the appropriate federal requirements.

Taxes and your retirement allowance

The superannuation retirement allowance that you receive from the MTRS is exempt from taxation under the Massachusetts income tax laws. The federal government ( Internal Revenue Service (IRS) ), however, will tax a large portion of your retirement allowance immediately upon retirement. Approximately 95-98% will be taxable at the federal level, depending on how much after-tax money you have in your MTRS annuity account at the time of your retirement, as explained below.

Upon your retirement, you will be required to complete a W–4P Form to begin a monthly federal tax withholding. It is very important that you complete a tax withholding form in conjunction with your retirement. If no form is filed with your retirement board, the retirement board is required by federal law to withhold taxes, starting with your second retirement check, as if you were a married person with three exemptions. It is also possible to request that no taxes be withheld. However, if no taxes are withheld, you should submit estimated quarterly payments to the IRS. You may change your federal tax withholding amount at any time during your retirement simply by notifying us.

Your tax liability will be determined by using the Internal Revenue Service’s Simplified Method. The tax-free portion depends on the amount of your after-tax contributions to the retirement system, when your contributions were made, and your life expectancy at the time of your retirement.

Since January of 1988, all contributions to the retirement system are being made on a pre-tax basis. Consequently, only your contributions made prior to January of 1988 and any purchases of creditable service made with after-tax dollars will be eligible for exclusion from your federal taxes. Pre-tax contributions and all of the interest which your account has earned cannot be used when you figure the yearly tax-exempt portion of your retirement allowance.

Reference: PERAC memos, including an interactive earnings calculator

• Enforcement of Post-Retirement Limits on Retirees of a Public Retirement System who Take Employment with any Public Entity in Massachusetts (Memo 30; November 1, 2013)
• Frequently asked questions 
• Post Retirement Earnings Calculator 
• Instructions for Post-Retirement Earnings Worksheet 
• Restrictions on post-retirement employment in Massachusetts  (Memo 24; July 2, 2008)
• Post-retirement earnings limitations in G.L. c. 32, § 91  (Memo 20; May 19, 2004)
• Post-retirement earnings limitations in G.L. c. 32, § 91  (Memo 3; January 12, 2004)

Overview

Pursuant to Massachusetts General Laws c. 32, § 91, there are limitations on the amount of time that a rehired retiree may work and the amount of money that he or she may earn.

However, pursuant to M.G.L. c. 32, § 91(e), the earnings limitations on re-employment of retirees in Massachusetts public schools are eased in the event of a “critical shortage” in a position as determined by the Department of Elementary and Secondary Education (ESE). The ESE has adopted regulation 603 CMR 7.14(13)(b), allowing the Commissioner of Elementary and Secondary Education to deem that a district has a “critical shortage” upon the request of a superintendent and demonstration that the district has made a good-faith effort to hire non-retirees and has been unable to find them. The “critical shortage” application process is similar to that for requesting a waiver for certification. (School districts wishing to take advantage of the “critical shortage” provision of M.G.L. c. 32, § 91(e) are advised to consult with the Department of Elementary and Secondary Education for guidance on the certification requirements for re-employed retirees.)

In brief:

FAQs

The school district that wishes to rehire a retiree to work beyond his or her post-retirement time and earnings limitations has applied for a critical shortage waiver with the Department of Elementary and Secondary Education (ESE). How will the rehired retiree know whether the critical shortage waiver is approved?

Once the ESE completes their review of the critical shortage waiver application, they will send written notice of their decision to the school district and mail a copy of the decision to you. Please be advised that you should not assume that you are working under a critical shortage waiver unless you have received a copy of the approval from the ESE.

How does the MTRS calculate the amount that I can earn?

Until you have been retired for at least one full calendar year (meaning one full January-through-December year), the amount that you can earn is equal to the difference between the annual amount currently being paid for the position from which you retired, and your annual pension. After you have been retired for at least one full calendar year, this limit is increased by $15,000.

For example: Trudy Teacher retires on June 30, 2016, with an annual retirement allowance of $48,000. The position from which Trudy retires, based on her step and education level, will pay $65,000 per year in the fall of 2016, and will remain at that amount for the next several years. She will return to teaching on September 1, 2016, and continue to work for the next several years (without exceeding the limit of 960 hours per calendar year). Trudy’s earnings limitations for the next few years are as follows:

 

For the last four months of 2016 (September 1 through December 31, 2016), Trudy can earn $17,000

Current annual salary for position from which Trudy retired*	$65,000
– Trudy’s annual retirement allowance	– $48,000
Amount of Trudy’s allowable earnings** for remainder of 2016	$17,000

* “Salary” means, essentially, the type of payments that constitute the ‘regular compensation’ used in the calculation of your retirement allowance, including but not limited to your contractual salary, longevity, and eligible extra duty stipends, including stipends for athletic coaching.
** “Earnings” include compensation in any form including annuity/insurance premiums and other fringe benefits.

 

For all of calendar year 2017 (January 1 through December 31, 2017), Trudy can still earn a total of $17,000

Current annual salary for position from which Trudy retired*	$65,000
– Trudy’s annual retirement allowance***	– $48,000
Amount of Trudy’s allowable earnings** for calendar year 2017	$17,000

 

Beginning January 1, 2018, after she has been retired for one full calendar year, Trudy can now earn an additional $15,000 for calendar year 2018 and every calendar year thereafter

Current annual salary for position from which Trudy retired*	$65,000
– Trudy’s annual retirement allowance***	–  $48,000
Standard earnings limitation for calendar year 2018	$17,000
+ $15,000 (per pension reform legislation of 2011)	+ $15,000
Amount of Trudy’s allowable earnings** for 2018	$32,000

*** Because cost-of-living adjustments must be granted by the Massachusetts Legislature on an annual basis, we have not included any COLA amounts in Trudy’s annual retirement allowance figures in these examples. If, however, the Legislature approves a 3% COLA for fiscal years 2018 and 2019, and the COLA base remains $13,000, then Trudy’s annual retirement allowance for calendar year 2017 would be $48,195 (an additional $32.50 per month for the six months of July through December, for a total increase of $195), and her allowable earnings for calendar year 2017 would decrease by $195, to $16,805. Likewise, for calendar year 2018, her annual retirement allowance would increase to $48,585 (an additional $32.50 per month for January through June, and an additional $65.00 per month for July through December, for a total increase of $585), and her allowable earnings for calendar year 2018 would decrease by $585, to $31,415.

For an interactive worksheet that both the employer and the rehired retiree can use to determine the earning limitations, please see the Public Employee Retirement Administration Commission’s Post Retirement Earnings Calculator .

I am a disability retiree. Am I subject to any additional post-retirement earnings limitations?

Yes—whereas non-disability retirees are subject to limitations on their post-retirement Massachusetts public sector earnings only, disability retirees are subject to a limit on the total amount of their post-employment earnings, from both public and private sectors.

Pursuant to M.G.L. c. 91A, a disability retiree’s annual post-retirement earnings—from both the private and public sectors—when added to his or her disability retirement allowance, cannot exceed the amount of salary that would have been payable to the retiree had he or she remained in service in the grade held at the time of retirement, plus $15,000. If this earnings limitation is exceeded, the retiree’s allowance will be withheld until the overpayment is recovered by the MTRS.

“Salary” means, essentially, the type of payments that constitute the ‘regular compensation’ used in the calculation of your retirement allowance, including but not limited to your contractual salary, longevity, and eligible extra duty stipends, including stipends for athletic coaching. “Earnings” include compensation in any form, including annuity/insurance premiums and other fringe benefits, and implies some labor, management or supervision in production of the income and not income derived merely from ownership of property.

It is the retiree’s responsibility to advise the person responsible for paying his or her compensation that he or she is a public retiree and, as a result, his or her post-retirement earnings in the public sector are limited.

How is the “salary being paid” for the position from which the rehired retiree retired determined?

If, in the position from which the retiree retired, he or she:

• was covered by a collective bargaining agreement in the position from which you retired, the “salary being paid” is the current annual contract rate for the retiree’s step and education level on the salary schedule.
• was not covered by a collective bargaining agreement (e.g., the retiree was an administrator or other educator covered by an individual contract), then the “salary being paid” is your last annual salary prior to retirement, plus an inflation factor equal to the Consumer Price Index (CPI-W) as certified by the Commissioner of Social Security, unless the retiree can provide sufficient evidence for the MTRS to reliably determine what you would have earned in a year after his or her retirement. An example of sufficient evidence would be a written, contemporaneous policy showing that the class of employees of which you would have been a member had he or she not retired, would all receive the same raise in a given year.

For example, if an administrator retired in 2015 with a final salary of $125,000 and the district wished to rehire her in 2016, for the purposes of determine the “salary being paid” for that position, the MTRS would apply the following formula:

Salary at retirement + inflation factor = “salary being paid”

$125,000 + 0.0% (the January 2016 COLA factor) = $125,000

NOTE: “Salary” means, essentially, the type of payments that constitute the ‘regular compensation’ used in the calculation of your retirement allowance, including but not limited to your contractual salary, longevity, and eligible extra duty stipends, including stipends for athletic coaching.

If the amount earned or the number of hours worked will exceed the limitations, what are my options?

In either case, the retiree has two options. If the retiree wishes to work in a position that will exceed either the time or the earnings limitation, and he or she has not been approved for a critical shortage waiver, he or she may:

a) Request a temporary cessation of pension payments by notifying the MTRS in writing to waive his or her retirement allowance for the period of employment. A retiree who has waived his or her retirement benefits is not subject to the time and earnings limitations and is not required to make contributions to the pension system. Stopping a retiree’s pension payments can affect the administration of his or her health insurance benefit, however, so it is a good idea for the retiree to discuss the impact of waiving the retirement benefit with his or her local insurance coordinator before making this decision.

Upon completion of the employment, the retiree may resume receiving his or her retirement allowance at the same level of benefits he or she had before waiving the allowance, plus any cost-of-living adjustments passed by the Massachusetts Legislature. (In other words, the retiree cannot recoup his or her retirement benefits for the period during which he or she waived them.)

b) Return to active membership in the MTRS and, in effect, “unretire,” if he or she agrees to certain terms and conditions. Pursuant to M.G.L. c. 32, § 105, in order to “unretire,” the retiree must pay back to the retirement system the total pension benefits received while retired, plus interest at the buy-back rate (currently, 3.75%). Moreover, the retiree must be employed in a full-time position subject to membership in the MTRS, for at least five full years from his reinstatement date in order to accrue additional retirement benefits. For more information, please see:

• Reinstatement to Service under G.L. c. 32 § 105 (July 14, 2011, PERAC memo 22 of 2011)
• Application for Reinstatement to Service  (pdf, 3 pages)

Is it true that retired teachers can “unretire”?

Yes, a member may be reinstated, provided he or she agrees to certain terms and conditions. Please see Question 5(b) directly above.

Can a retired teacher or administrator who waives retirement benefits and then accepts a full-time, paid position, later have his or her retirement allowance reinstated for 960 hours during any calendar year?

No. The law does not permit retirees who waive their retirement benefits and then accept public employment to supplement their incomes by the device of reinstating their retirement allowances for the 960-hour period during each calendar year. Opinion of the Attorney General, February 2, 1979.

Whose responsibility is it to keep track of the number of hours worked and money earned by the retirees?

It is the responsibility of the rehired retiree to provide his or her employer and the treasurer of the city or town (or the source responsible for paying the retiree) with a certification of the length of time worked and the amount of income earned in a given calendar year. If either the period worked or the income earned exceeds the allowable amount, the rehired retiree can no longer be employed and the excess earnings must be returned to the appropriate treasurer or entity responsible for paying the retiree. In the case of excess or improper retirement payments, the MTRS has the authority either to require repayment or to offset the amount received against future retirement payments.

If a teacher or administrator is rehired as a “consultant,” do the restrictions on post-retirement employment still apply?

Yes. The restrictions set forth above apply to both employees and non-employees; except for services performed for the general court as a non-employee, the law makes no distinction between employees and non-employees. Accordingly, the restrictions on hours and earnings apply if a teacher or administrator is receiving a retirement allowance and is being paid as a “consultant,” independent contractor, or someone whose regular duties require their time to be devoted to the service of the Commonwealth.

Are “leased employees” subject to these restrictions?

Yes. M.G.L. c. 32, § 91(a) prohibits all retirees from “render[ing] service” to any public employer, including school districts. Section 91(b) provides a general exception to this prohibition, allowing post-retirement employment for up to 960 hours in any calendar year, and limiting annual earnings to the difference between the retiree’s retirement allowance and the salary being paid for the position from which he/she retired. The Massachusetts Teachers’ Retirement System (MTRS) interprets “render[ing] service” to include work under an employee leasing arrangement, and thus such arrangements are subject to the restrictions of section 91.

What is an employee leasing arrangement?

An employee leasing arrangement is one where one company (the “Leasing Company”) loans or hires out its employee to another (the “Client Company”). The “leased” employee is paid by the Leasing Company and may report occasionally to the Leasing Company. While working for the Client Company, however, the employee and his/her work are directed and controlled by the Client Company and the employee typically uses the Client Company’s work space and equipment to accomplish his/her work. A common example is a “temp” agency that supplies temporary workers. Since the law has often regarded “leased” employees as employed by both the Leasing Company and Client Company, it is clear that a “leased” employee “renders service” to the Client Company.

In the education context, some companies supply interim school administrators under “leasing” arrangements, and these administrators are directed in their day-to-day activities by the school district. Of course, superintendents, assistant superintendents and principals are by law appointed, employed and directed by their respective superiors (ultimately, the school committee). General Laws c. 71, §§ 59 and 59B. Thus, the System regards “leased” employees in such positions to be “render[ing] service” to the district and thus subject to the limitations of section 91(b).

Will I be subject to Social Security deductions? MTRS retirement deductions?

No, you will not be subject to either Social Security or MTRS contribution deductions. If a retired teacher or administrator returns to work in a Massachusetts public school, he or she is considered a “rehired annuitant” by the Internal Revenue Service, and therefore exempt from mandatory Social Security coverage. For more information, see the IRS web page on Rehired Annuitants as well as the Social Security Administration’s web page on Rehired Annuitants .

Where can educators get information on maintaining their teaching certification?

See the Department of Elementary and Secondary Education’s website for information on renewing your license.

Overview

What types of retiree survivor benefits does the MTRS provide?

A survivor of a retired member may receive no benefit, a single lump-sum payment or a monthly member-survivor benefit. Whether a survivor will receive a benefit and, if so, what type, depends upon:

• the particular retirement allowance option—Option A, Option B or Option C—that the member chose upon his or her retirement,
• the survivor’s relationship to the member,
• the type of beneficiary the member specified and who the member named as a beneficiary on his or her MTRS Beneficiary Designation form, and
• if the member retired under accidental disability, whether he or she applied for accidental disability benefits before or after November 7, 1996.

When the member retired, he or she chose one of three retirement benefit options. These options are different with regard to the amount paid to the member during his or her retirement and whether any benefits will be paid to someone else after the member’s death. In other words, the member determined whether and how we pay any survivor benefits.

What are the three retirement benefit options and what survivor benefits, if any, do they provide?

The three retirement benefit options are:

• Option A: This option gives the retiree the highest possible retirement allowance; it does not, however, provide for any survivor benefit. If there are any benefits that were earned by the retiree in the month of his or her death, but that were not issued to the retiree, they will be pro-rated based on the number of days in the month that the retiree lived, and paid in a lump sum to either the retiree’s designated month-of-death-benefits beneficiary or estate.
• Option B: This option provides a retiree with an allowance that is generally 1% less than an Option A allowance. It also provides for a survivor benefit in the form of a lump-sum payment of the balance, if any, remaining in the member’s annuity savings account. In most cases, the member’s annuity account will be depleted 10 to 12 years after his or her retirement date.
• Option C: While this option pays a retirement allowance that is generally 9–11% less than an Option A allowance to the member during his or her retirement, it provides a survivor with a monthly benefit for the rest of his or her life. The amount of the survivor’s benefit is equal to 2/3 of the amount of the retiree’s benefit at the time of his or her death.

How do I know which option the member retired under?

The MTRS has this information on file. It is also included on the Option Selection form that the member should have submitted to us at the time of his or her retirement; the member may have kept a copy of this form.

I am the survivor of a retired member. How do I know whether I am eligible to receive a survivor benefit?

You may be eligible to receive a survivor benefit if the member:

• retired under Option B or Option C, and
• named you as a beneficiary in his or her Beneficiary Designation form on file in our office.

If the member is an accidental disability retiree who applied for benefits prior to November 7, 1996, and you are the surviving spouse who was married to the retiree on the date of his or her retirement, you may be eligible to receive the minimum monthly spousal survivor benefit, currently $1,000 per month.

The member’s regular retirement allowance payment arrived after he or she died. What should I do with this money?

The member is entitled to a retirement allowance through the date of his or her death; a designated Option B or Option C beneficiary is entitled to the survivor benefit, if any, from the day after the member’s death. For example, if the member died on the 9th of a 31-day month, he or she is entitled to 9/31 of the monthly retirement allowance. If the member retired under Option C, the member-survivor benefit is then pro-rated from the 10th of the month.

Retirement benefits are paid for time already accrued. For instance, the allowance that the member receives at the end of January is the payment for January. Depending on the date of the member’s death and when we are notified, however, it is possible that we might continue to send payments that the member is not entitled to. These payments must be returned to the MTRS.

If the member’s retirement allowance is paid by:

• a monthly check mailed to the member, any check(s) received after the date of death must not be cashed but must be returned directly to the MTRS. We will determine which portion of the payment represents benefits earned by the member from the beginning of the month through the date of death; this pro rata share of the member’s retirement benefit will be paid to the member’s beneficiary or to his or her estate.
• direct deposit (electronic transfer) to the member’s bank account, we will discontinue the automatic transfer as soon as we learn of the member’s death and recover as much of the overpayment as allowable directly from the bank. We will determine the amount of any overpayment to the account and require reimbursement from the member’s estate.

Please note that if any retirement allowance was paid to the member after his or her death, the MTRS must recover the overpayment before paying a survivor benefit. If necessary, such overpayment will be deducted from the lump-sum payment, if any, or the member-survivor monthly payment(s).

For the surviving spouse

I am the surviving spouse of a member who retired under a disability allowance. Is my benefit any different from that of the survivor of a “regular” retiree?

With two exceptions, no. Whether you are eligible to receive a survivor benefit and what type, if any, are determined according to the same criteria as for a survivor of a member who retired under a “regular” allowance. The two exceptions concern members who retire under accidental disability retirement.

1. If the member dies as a result of the injury or condition that precipitated his or her accidental disability retirement, you may be entitled to accidental death benefits.
2. If the member applied for accidental disability retirement prior to November 7, 1996, and you were married to the member on the date of his or her retirement, you may receive the minimum monthly spousal benefit, currently $1,000/month. Prior to November 7, 1996, accidental disability retirees could not select Option C; legislation that later allowed for the selection of Option C also provided a minimum monthly spousal benefit for surviving spouses of members who applied for benefits prior to November 7, 1996.

Will I be eligible to receive group health insurance coverage?

As the surviving spouse of a retired member, you may be eligible for group health insurance benefits. Any health insurance benefit that you may be entitled to will be administered under the insurance program that your spouse was eligible to join upon his or her retirement.

The group health insurance of our retired members is administered in two ways: by the Commonwealth’s Retired Municipal Teachers’ (RMT) Program and by the member’s former employer. If the member’s former school district is included in the list of school districts participating in the RMT Insurance Program, your health insurance will be administered by the RMT Program. If not, it will be administered by the member’s former employer.

• The Retired Municipal Teachers’ Program: If the member retired from one of the school districts that has opted to join the Commonwealth’s Retired Municipal Teachers’ Program, his or her health insurance benefits were administered by the Massachusetts Group Insurance Commission after retirement. If your spouse retired from one of these districts, you should contact the Group Insurance Commission at 617-727-2310,
  • ext. 804: to report your spouse’s death and to request an application form for survivor health and life insurance benefits;
  • ext. 806: to request general information regarding eligibility and benefits.

If you are eligible for group health insurance benefits under the RMT Program and you:

• •  will be receiving a monthly survivor benefit from the MTRS, your insurance premium will be deducted by the MTRS from your monthly survivor allowance.
  • will not be receiving a monthly survivor benefit from the MTRS, you will pay your insurance premium directly to the Group Insurance Commission.
  • Member’s Former Employer: If your spouse’s school district is not included in the list of school districts participating in the RMT Program, you should contact the local insurance administrator for this school district for information concerning your benefits.
    If you are eligible to receive your health insurance from this school district and you will be receiving a monthly survivor benefit from the MTRS, you have the option of having your premium deducted from your monthly allowance. If, however, you choose not to have this deduction taken from your survivor allowance, or you will not be receiving a monthly benefit from the MTRS, you must pay your premium directly to the school district insurance administrator.

For the survivor of an Option A retiree

I am the surviving spouse of a member who retired under Option A, which does not provide for any survivor benefits. Are there any circumstances under which I could still receive a survivor benefit?

Yes. If your spouse retired under Option A and died within 30 days of his or her effective date of retirement, you may be eligible to receive a monthly survivor benefit. The amount of the monthly survivor benefit is equal to the allowance that the member would have received if he or she had retired under Option C.

I am the survivor of a member who retired under Option A; there is no surviving spouse or dependent children. Are there any circumstances under which I could still receive a survivor benefit?

No. Option A provides the maximum amount payable during the member’s retirement; it does not provide for any survivor benefits.

For the survivor of an Option B retiree

What is a lump-sum benefit?

A lump-sum benefit is a single, one-time payment to the survivor beneficiary or beneficiaries and constitutes the entire benefit. The amount of the benefit is the total balance, if any, remaining in the member’s annuity savings account, which contains all of the contributions and interest credited as of the member’s date of death. There are no restrictions on who may be named a lump-sum beneficiary and a member may name more than one individual to receive a percentage of his or her account.

How is the amount of my lump-sum benefit determined?

Under Option B, the lump-sum benefit is equal to the balance remaining in the member’s annuity savings account, if any, at the time of his or her death.

As you may know, each member of the Massachusetts Teachers’ Retirement System contributes a percentage of his or her salary to the system while he or she is employed. These contributions, plus any interest which may accumulate on these contributions, are deposited into an annuity savings account established in the member’s name and maintained by the MTRS.

When a member chooses to receive an Option B retirement allowance, he or she is selecting an allowance that is approximately 1% less than the maximum amount he or she could have received under Option A—but he or she is also providing a potential benefit payable to a survivor or survivors after death.

During the member’s retirement, the balance in the annuity savings account decreases each month by an amount equal to the monthly annuity portion of the member’s retirement allowance. In most cases the annuity account will be depleted within 9 to 11 years after the member’s date of retirement. For all intents and purposes, this recordkeeping is “invisible” to the member and the reductions do not affect the member’s monthly retirement payments. Upon the member’s death, the balance remaining in the account is paid in a lump sum to the beneficiary or the estate.

If the annuity account is depleted while the member is receiving his or her retirement allowance,

• the member will still continue to receive his or her full Option B pension amount for life but
• the beneficiary will not receive any payment upon the member’s death.

How long does it take before I receive my lump-sum benefit?

In order for the MTRS to begin to process your claim for benefits, you must complete an application form that we will provide to you. This form, along with a copy of the member’s death certificate, must be submitted to us. You can expect your lump-sum payment approximately 60 to 90 days after we receive your complete documentation.

I am the surviving spouse of a member who retired under Option B, which provides only for the lump-sum payment of the balance, if any, remaining in the member’s annuity savings account. Are there any circumstances under which I could receive a monthly survivor benefit instead?

Yes. If your spouse retired under Option B and died within 30 days of his or her effective date of retirement, you may be eligible to receive a monthly survivor benefit. The amount of the monthly survivor benefit is equal to the allowance that the member would have received if he or she had retired under Option C.

What happens if the Option B retiree failed to designate a beneficiary or if the individual designated by the member on his or her MTRS Beneficiary Designation form is deceased?

If the member failed to designate a beneficiary for his or her survivor benefit, or if the individual designated by the member is deceased, then any amount that remains in the member’s annuity savings account at the time of his or her death will be paid in a lump sum to the administrator or executor of the deceased member’s estate. In order for the MTRS to process a payment to an estate, we must have a copy of both the member’s death certificate and the administrator’s or executor’s official Letter of Appointment from the Probate Court. If an administrator or executor has not been appointed by the Probate Court, the member’s heirs must sign a Release of Claim form which designates the individual who will receive the lump-sum payment.

For the survivor of a Option C retiree

What is a member-survivor benefit?

A member-survivor benefit is a monthly payment made to a survivor for life. Upon the retiree’s death, the individual named as a member-survivor beneficiary will receive a monthly survivor benefit for the rest of his or her life. A member may name only one person as a member-survivor beneficiary and this person must be the member’s parent, spouse, sibling, child or former spouse who has not remarried.

How is the amount of my member-survivor benefit determined?

Under Option C, the member-survivor benefit is equal to two-thirds of the amount of the retirement allowance that the member was receiving at the time of his or her death.

How long does it take before I receive my first member-survivor payment?

In order for the MTRS to begin to process your claim for benefits, you must complete both the application form that we will provide, and the Internal Revenue Service’s form W–4P. These forms, along with a copy of the member’s death certificate must be submitted to us before we can issue your first payment. If these forms are returned in a timely fashion, we will make every effort to ensure that you receive your first member-survivor benefit payment by the last day of the month following the month of the member’s death.

I am the beneficiary of a member who retired under Option C, which provides only for the payment of a monthly allowance. Are there any circumstances under which I could receive a single lump-sum benefit instead?

No. If you are designated as the member’s Option C beneficiary, you must receive a monthly member-survivor benefit.

What happens if the individual designated as the beneficiary by the member on his or her MTRS Beneficiary Designation form is deceased?

If the individual designated as the Option C beneficiary by the member is deceased, no survivor benefits will be paid after the member’s death. The Option C survivor benefit can only be paid to the individual designated by the member as the Option C beneficiary, and the member has only one opportunity—at the time of his or her retirement—to designate this individual. If the original Option C beneficiary dies before the member, the member is precluded from naming another person as the Option C beneficiary.

If the member’s beneficiary predeceased him or her, the member would have been eligible to “pop up” to the higher Option A benefit amount for the remainder of his or her retirement.

I am the surviving spouse. If I remarry, will the amount of my monthly member-survivor benefit be adjusted?

No. Remarriage has no effect on the amount of the Option C survivor allowance that you receive. You will receive your monthly benefit for life.

Will I have to pay federal taxes on my member-survivor benefit?

Yes. How you calculate your tax liability depends on the retirement date of the deceased member. Different methods of calculation apply to different dates of retirement. The Form 1099–R that you receive from the MTRS in January of each year will set forth the amount of your benefit that is taxable according to the method that is applicable to you.

For information on which method of calculation applies to you, contact your local IRS office, visit the IRS online at www.irs.gov, refer to IRS Publication 575 or discuss this with your accountant or other expert in the area of federal taxation.

Can I have federal income taxes deducted from my member-survivor benefit?

Yes. The MTRS is required by federal law to withhold federal taxes from all survivor allowances unless a survivor notifies us in writing that he or she does not wish to have taxes withheld. As part of our processing of your claim, we will send you our Substitute Form W–4P. This form asks you to indicate the amount of tax that you wish to have withheld. Before you receive your first payment, you must complete and return this form to us. If we do not receive your form W–4P, we are required to withhold taxes as if you are a married person with three exemptions.

Will I have to pay state income tax on my member-survivor benefit?

Not in Massachusetts. Member-survivor benefits are exempt from taxation by the Commonwealth of Massachusetts; however, if you live in another state, you may be required to pay income tax on your benefit (see Massachusetts Department of Revenue’s information on how other states treat out-of-state government pensions for tax purposes).

Will the MTRS contact me to see if I continue to be eligible to receive a member-survivor benefit?

Yes. Massachusetts retirement law requires that all individuals receiving retirement, disability or survivor benefits file an affidavit verifying their eligibility to receive a benefit. Periodically, the MTRS will contact you and ask you to sign a Benefit Verification form, under the penalties of perjury, declaring your continued eligibility to receive your member-survivor benefit.

Are there any situations in which the MTRS would reduce or suspend my member-survivor benefit?

In most cases, no; the monthly benefit that you receive from the MTRS is a lifetime benefit. Some exceptions may apply to spouses and dependent children of an accidental disability retiree.

Are there any situations in which the MTRS would increase my member-survivor benefit?

Yes. Cost-of-living adjustments are granted to retirees and survivors on an ad hoc basis by a vote of the Massachusetts Legislature. A retiree is eligible to receive a cost of living adjustment, if any, in the second fiscal year following his or her retirement date; if the retiree has already completed this eligibility period, then the survivor is eligible for any cost of living adjustments immediately upon their being granted by the Legislature.

How is my member-survivor benefit actually paid to me?

You must receive your monthly member-survivor benefit payments by electronic transfer (also known as “direct deposit”) to your bank checking or savings account. You may change the bank account to which payments are deposited at any time by submitting a new Direct Deposit Authorization form.

Will my member-survivor benefit continue to be paid to someone else after I die?

Possibly. In most instances, your member-survivor benefit may be paid only to you and ends upon your death. However, if:

• you are the surviving spouse of an Option C retiree and
• you have been receiving Option C benefits and
• you and the deceased member leave children under the age of 18,

then your member-survivor benefit will continue to be paid, in equal shares, to your minor child until he or she reaches age 18. Payment will be made to the guardian of each child for his or her benefit.

For the survivor of an Accidental Disability retiree

If my spouse was receiving an accidental disability retirement and died as a result of a work-related injury, does the MTRS provide any type of accidental death benefits?

If your spouse died as a result of the injury or condition that was the basis for his or her accidental disability retirement, you may be eligible to receive accidental death benefits. If the Board grants you accidental death benefits, you will receive a monthly accidental death survivor benefit. The amount of your monthly accidental death survivor benefit will equal the pension portion of your spouse’s accidental disability benefit. You will receive this benefit for the rest of your life. In addition, you will receive:

• a refund of the amount of the member’s contributions, if any, remaining in his or her MTRS annuity savings account, and
• an annual benefit per unmarried child under age 18, or age 22 if a full-time student. As of July 1, 2017, the annual benefit for eligible children was $897.72. Children who are physically or mentally incapacitated and unable to be financially self-supporting on the member’s date of death will receive a lifetime benefit.

If your spouse died but not as a result of the injury or condition that was the basis for the accidental disability retirement, your survivor benefits, if any, will be governed by the survivor option selected by your spouse at the time of his/her retirement. (Exception: If your spouse applied for accidental disability benefits before November 7, 1996, you may be eligible to receive the minimum monthly spousal benefit, currently $1,000/month.)

How do I apply for accidental death benefits?

If you wish to apply for accidental death benefits, please contact the Retiree Services Unit of the MTRS’s main office. Because this is a complex process, we ask that you first speak to one of the representatives from this unit to ensure that you are aware of the issues involved and that your case is handled in the most appropriate way.

Upon request, we will send you an Application for Accidental Death Benefits, which you must complete and return to our office to initiate the claim process. Along with your application you will be required to supply additional materials that support your claim that your spouse died of work-related injuries.

How to apply for survivor benefits

What must I do in order to apply for survivor benefits?

You must first report the death of a benefit recipient to the MTRS. In order for the MTRS to begin to process your claim for benefits, you must complete and submit an application that we will provide to you. After we have received your completed application form and the required documents, we will review your claim and let you know what the next steps are and whether you must complete any other forms. Please be aware that, along with your application, you must submit a copy of the retired member’s death certificate (this does not need to be a certified copy).