Advance preparation before you retire from the University is imperative to insure that the transition occurs smoothly & you know what to expect/prepare for in terms of income and benefits. There are a number of resources you may wish to take advantage of during this process.
Thinking About Retirement
- Make important contacts to obtain an estimate of your retirement income:
- Estimate your monthly expenses and consider having at least three full months of income available prior to retiring
One key consideration: the GIC will invoice you at home for your health and life insurance
premiums until they can coordinate deducting those premiums from your monthly
MA State Employees’ Retirement System (MSERS) pension or Optional Retirement Program
(ORP) payment. Prompt payment of these invoices is necessary to secure
continued coverage. If you lose coverage due to untimely (or non-) payment of premiums
you may not be able to re-enroll for coverage until the next GIC open enrollment period
(end of April/beginning of May with coverage effective July 1.)
- If you are a member of MSERS and your pension is not the maximum 80% income replacement, consider if you have service you may be able to “buy” as creditable service toward retirement.
You may be eligible for income in retirement from a number of sources including, but not limited to:
- If you are a member of MSERS, the MA State Board of Retirement can provide you an estimate of your pension from the Massachusetts State Employees’ Retirement System (MSERS). You may also estimate your pension on-line.
**Remember that your first pension payment may take up to three full calendar months.
While the first payment will be retroactive to your retirement date, it is recommended
that you have at least three months of liquid income available when you retire.
We encourage you to contact the State Board of Retirement for a formal projection at
least one year prior to your anticipated retirement date.
MSERS pensions rarely keep up with the cost of living over time (the pension is
subject to a Cost-of-Living Adjustment after you have been retired one full fiscal year,
July 1-June 30. If the legislature passes a COLA that increase applies to the first $13,000
of your annual pension, not to your entire pension).
- If you are a member of the ORP, please work with your ORP vendor to evaluate and initiate your ORP income options. it is important to begin this process at least five (5) months prior to your anticipated retirement date if you intend to secure health insurance benefits through the MA Group Insurance Commission (see below) and in order for your University benefits (payment of unused sick time, continuation of University e-mail address, etc) to transition without interruption.
- Social Security Administration: remember to inform your Social Security contact that you will be subject to the Windfall Elimination Provision and Government Pension Offset. These two federal provisions may impact your Social Security income while drawing your MSERS pension.
- If you have a voluntary pre-tax retirement account (eg, a University 403b and/or Massachusetts 457/SMART plan account vendor to discuss retirement income from that/those account(s).
Additional helpful resources:
- MA State Employees’ Retirement System Presentation
- MSERS Retirement Application
- MA Department of Higher Education information for ORP Retirees
- MA Group Insurance Commission information for retirees
Applying to Retire from MSERS
You may file an application to retire from MSERS directly with the SBR or by scheduling an appointment with a Human Resources Resources Representative. This application may be filed up to, but no more than, 120 calendar days prior to your retirement date. Information on what is required to complete your retirement application is available here (LJH’s pdf of process/docs)
If you file your retirement application directly with the SBR remember to also file the MA Group Insurance Commission (GIC) Enrollment/Change Form (Form 1) with the HRESC to secure continued health insurance coverage at the retiree rate.
Applying to Retire from the ORP
The MA Department of Higher Education has developed an ORP Retiree Checklist to guide you through the retirement process. The University encourages you to begin this process at least five (5) months prior to your anticipated retirement date, and to work with a University Human Resources Resources Representative to insure smooth transition of your GIC insurance and University retirement benefits. Remember to also file the MA Group Insurance Commission (GIC) Enrollment/Change Form (Form 1) with the HRESC to secure continued health insurance coverage at the retiree rate.
Impact of Retirement on Key Benefits
- GIC Health and Basic Life Insurances: If you are retired and you are eligible for Medicare you must enroll in Medicare Parts A & B if you wish to continue any health insurance through the MA Group Insurance Commission . At that time Medicare Parts A & B become your primary coverage and the GIC will offer you a Medicare supplement plan (inclusive of prescription coverage). This same process applies to any Medicare-eligible dependent(s) you are providing GIC health insurance coverage when you are retired.
Contact the Social Security Administration to confirm if you or your dependent(s)
will be eligible for Medicare.
- GIC Optional Life Insurance (OLI): you may continue your GIC term OLI insurance for as long as you wish, or cancel or reduce that coverage effective the first day of any future month. For most retirees (based on age at retirement) the GIC OLI premiums increase significantly upon retirement (for premiums please reference the GIC Retiree Benefits Decision Guide). Premiums just about double when you turn 70 years of age and every five years thereafter.
- GIC Long Term Disability (LTD) Insurance: your GIC LTD insurance coverage ends upon retirement. If you became disabled prior to retirement and are drawing GIC LTD payments upon retirement, those payments will be reduced in the amount of your MSERS pension (minimum monthly payments may continue.)
- HCSA: You may not incur GIC HCSA eligible expenses after your retirement (unless you continue coverage under COBRA by making post-tax contributions to that account, undermining your tax-savings for participating). If you enroll in the GIC HCSA for the calendar year in which you retire, please take this into account when estimating your annual election amount & insure you have spent at least as much as you have contributed to the HCSA by your retirement date.
- Met Home / Auto Insurances: MetLife extends the employee home and auto insurance discounts to University retirees. These premiums cannot be deducted from your monthly MSERS pension payments, so you must pro-actively contact MetLife (link to contacts) to make alternative payment arrangements.
- Met/Hyatt Legal Insurance: your Met/Hyatt Legal insurance coverage ends upon retirement.
- Dental Insurance: your dental insurance coverage ends at the end of the month following your retirement (eg, if you retire January 3 your dental coverage will end the last day of February).You have two options for dental insurance based on your former University employment. If dental insurance coverage is important to you, explore these and other dental coverage options (eg, through the MA Health Connector – link, the AARP and other)
- COBRA: you may continue your employee dental insurance plan for up to 18 months (up to 36 months if you are 65 years of age or older upon retirement) by paying 102% of the premium. Your dental plan administrator will send a COBRA notice to your home. If you wish to continue your current coverage under COBRA, return the COBRA enrollment form to that administrator. COBRA dental premiums are not deducted from your monthly MSERS pension; you will need to make direct premium payments to the plan administrator.
- GIC Retiree Dental Plan: you may enroll in the GIC Retiree Dental Plan upon retirement, upon loss of coverage under another plan (for instance expiration of coverage under COBRA, above) or during the GIC open enrollment (end of April/beginning of May each year with coverage effective July 1) any year. Please note that if you enroll in the GIC Retiree Dental Plan and later cancel your coverage, you will not be eligible to re-enroll in the future.
- University Paid Leave Accruals & Compensatory time: non-MSP members are paid for unused vacation leave, 20% of unused sick leave and compensatory time after retirement. MSP members receive a longevity payment (1.5 days of pay for each full year of service to the University). These payments are typically issued:
- one-to-two payperiods following your last payment for time worked
- in the form of a check mailed to your home
This payment will be net federal income taxes (25%) and MA state income taxes.
You may elect to tax-defer some or all of sick/vacation payments into a University 403b or Massachusetts 457/SMART account, within IRS limits. If you wish to do this you must make these arrangements in the calendar month prior to payment.