Retiring and Thinking About Retirement
Advance preparation before you retire from the University is imperative to ensure that the transition occurs smoothly and that you know what to expect and 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.
In doing this, keep in mind that the Massachusetts Group Insurance Commission (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 payment (retirees of the Optional Retirement Program (ORP) are always directly billed for GIC insurance premiums). 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 "purchase" as creditable service toward retirement.
- UMass Amherst Human Resources assists individuals considering retirement from MSERS via group Zoom workshop. In these meetings we discuss how MSERS pensions are calculated, the impact of retirement on benefits and review the retirement application process.
You may be eligible for income in retirement from a number of sources including, but not limited to:
If you are a member of the:
- Massachusetts State Employees Retirement System (MSERS, defined benefit plan, pension system), we encourage you to consider requesting a Pension Benefit Estimate from the MA State Retirement Board for financial planning purposes. In completing the pension estimate request form linked above, note that all UMass Amherst employees are members of group classification 1 except for university police officers, sergeants, lieutenants, and the police chief (who are members of group classification 2). You may also estimate your pension online.
Consider your MSERS pension Option election carefully. You cannot change your pension option after retirement and, if you elect pension option C, you cannot change your option C beneficiary after retirement.
- Your first pension payment may take three or more full calendar months. While the first payment will be retroactive to your retirement date, it is recommended that you have three-to-five months of liquid income available when you retire.
- 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).
- Massachusetts Optional Retirement Program (ORP, defined contribution plan): 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 (GIC; please reference impact on benefits on this webpage) and in order for your University benefits (eg, continuation of University e-mail address) to transition without interruption.
- Social Security Administration: if you are drawing (or apply to draw) income from the Social Security System, remember to inform the Social Security Administration that you may 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 or if you are eligible for retirement funds under the ORP.
- If you have a voluntary pre-tax retirement account (eg, a University 403b and/or Massachusetts 457/SMART plan) contact your vendor (Fidelity, TIAA and/or Empower Retirement) to discuss retirement income from that/those account(s).
Additional helpful resources:
Applying to Retire from MA State Employees' Retirement System (MSERS)
To initiate your retirement application process, you must:
- Arrange for retirement income. Members of the:
MA State Employees Retirement System/MSERS/pension plan: we encourage you to attend a "Retiring from the State Employees' Retirement System" workshop through Workplace Learning and Development. These workshops provide an overview of retirement income, the impact of retirement on benefits and corresponding retirement forms. The slides used in these workshops may also prove a useful reference.
To retire from MSERS, you must file an MSERS retirement application with the MA State Retirement Board within the 120 calendar days immediately preceding your retirement date, providing the supporting documentation referenced on the form.
MA Optional Retirement Program/ORP: work with your ORP vendor (Fidelity or TIAA), completing the paperwork to draw income from the ORP. If you wish to purchase health insurance through the MA Group Insurance Commission/GIC in retirement be certain your ORP income will meet levels required by the GIC. The Department of Higher Education ORP website contains information about retiree status for GIC purposes and retirement income.
- Complete and submit a MA Group Insurance Commission (GIC) Status/Change Form hard copy with UMass Amherst Human Resources.
If you wish to continue purchasing health insurance through the GIC and anyone covered under your GIC health plan is eligible for Medicare Part A at no cost, the GIC will require those individuals to enroll in Medicare Parts A&B. Following your retirement the GIC will write to those individuals via post offering them a Medicare supplement plan (please reference the Retirement and GIC benefits webpage for more information). In order to process the Medicare Part B enrollment form the Social Security Administration often requires proof these individuals have had "qualified health insurance coverage" between age 65 and your retirement date. Please contact UMass Human Resources if you require that documentation/the Social Security CMS-L564 form to be completed.
Applying to Retire from the Optional Retirement Program (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 5 months prior to your anticipated retirement date to ensure smooth transition of your GIC insurance and retirement benefits. Remember to also file a hard copy of the MA Group Insurance Commission (GIC) Employment Status Change Form (Form 1A) with UMass Amherst Human Resources to secure continued health insurance coverage at the retiree rate.
Impact of Retirement on Benefits
If you are retired (drawing a retirement income from the MA State Employees' Retirement System or the MA Optional Retirement program):
- GIC Health and Basic Life Insurances: the GIC will continue to offer a non-Medicare health insurance plan to you (and your eligible dependent/s) at the retiree rate so long as you are not eligible for Medicare Part A at no cost. The GIC Retiree Benefit Decision Guide provides an overview of retiree insurance plan coverages and premiums.
If you (or anyone covered under your GIC health insurance plan) is eligible for Medicare Part A at no cost, 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 (with prescription coverage).
Contact the Social Security Administration to confirm if you or your dependent(s) will be eligible for Medicare Part A at no cost. If ineligible for Medicare Part A at no cost the GIC offers continuation of a health insurance that is not a Medicare supplement.
- 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 approximately double when you turn 70 years of age and again each 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 & ensure you have spent at least as much as you have contributed to the HCSA by your retirement date.
- Payroll-deducted Home / Auto Insurances: these premiums will not be deducted from your retirement income. Some providers will continue to provide a discount if you pay premiums via a transfer from a bank account. Please contact your insurance company directly to explore options.
- Met/Hyatt Legal Insurance: your Met/Hyatt Legal insurance coverage ends upon retirement. You may continue the coverage for one year thereafter by prepaying the premium. Contact Met/Hyatt Legal directly to make arrangements.
- Dental Insurance: the dental insurance you have as an employee ends following your retirement. 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 Massachusetts Health Care / Commonwealth Connector, the AARP and other).
- COBRA: you may continue your employee dental insurance plan for up to 18 months (up to 36 months through MA Public Employees Fund for members of AFSCME Unit A and PSU/MTA Units A&B) 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 or ORP payments; 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 (plan information in the GIC Retiree Benefit Decision Guide) upon retirement, upon involuntary 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 are not eligible to re-enroll in the future.
- Other: you may choose to purchase dental insurance through the Massachusetts Health Care / Commonwealth Connector, another organization...or not to purchase dental insurance. You are not required to purchase dental insurance.
- University Paid Leave Accruals & Overtime Compensatory time: non-MSP members are paid for unused vacation leave, 20% of unused sick leave and overtime 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.
This payment will be the net of federal income taxes (22%) and MA state taxes (income and Paid Family Medical Leave [PFML]). 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.