Choice 1: Leave your funds on account (runtime: 3:00)
Choice 2: If eligible, receive a retirement benefit (runtime: 0:24)
Choice 3: Take a refund (runtime: 5:45)
If you leave teaching before retiring from the MTRS, you will need to decide what you want to do with your annuity savings account:
If you leave your funds on account…
- You do not need to notify us that this is what you are doing. We will simply keep your funds on account and continue to send you annual statements that show your balance and any activity, such as the addition of interest. Please note, however, that although your statement will reflect interest each year, you may not be eligible to receive all of the accrued interest if and when you later apply for a refund (see below). To comply with IRS rules, however, the MTRS must send you a refund of your account no later than April 1 of the year after the year in which you turn age 72. You will be subject to taxes on the money you receive.
(Please note: The age requirement was changed from 70-1/2 to 72 under the SECURE Act of 2019, effective January 1, 2020. If you were previously required to begin taking a minimum distribution because you reached the previous age requirement of 70-1/2 prior to January 1, 2020, you must still continue taking that distribution.)
- If you have at least 10 years of creditable service at the time you leave service, you may be eligible to leave your funds on account until you attain a certain age. If, at the time you leave service, you have at least 10 years of creditable service, and your Membership Tier is:
- Tier 1 (you established membership before April 2, 2012), and you are under age 55, you may leave your funds on account until you attain age 55, at which time you may then apply for a retirement allowance.
- Tier 2 (you established membership on or after April 2, 2012), and you are under age 60, you may leave your funds on account until you attain age 60, at which time you may then apply for a retirement allowance.
- If you later return to a position which requires membership in a Massachusetts contributory retirement system, all interest reported on your statements will be credited. Additionally, since you left your money on account, you will be entitled to your “old” contribution rate (the contribution rate in effect at the time you left service) in your new position.
- Under certain circumstances, your account will not earn interest and you will not be entitled to receive all of the accumulated interest. Provided you are not subject to any forfeiture provisions due to criminal conviction, the amount of interest you are entitled to receive is based on three factors: whether your leaving service was voluntary or involuntary, how much creditable service you have, and your effective membership date.
- If your effective membership date is on or after January 1, 1984, and you leave (or left) service by:
- RESIGNING VOLUNTARILY, and you have:
- less than ten years of creditable service, you will receive interest at the rate of 3% on your accumulated total deductions.
- ten or more years of creditable service, you will receive interest at the regular rate at which it has been credited to your account (in other words, the actual amount of interest you have accrued)
- BEING INVOLUNTARILY TERMINATED, you will receive interest at the regular rate at which it has been credited to your account (in other words, the actual amount of interest you have accrued).
- RESIGNING VOLUNTARILY, and you have:
If your effective membership date is before January 1, 1984, you will receive interest at the regular rate at which it has been credited to your account (in other words, the actual amount of interest you have accrued).
In addition to the above situations, and regardless of the amount of creditable service you have, if you apply for a refund more than two years after the date of your termination of service, you are eligible to receive the interest accumulated only for the two years immediately following that date.