Advance preparation before you retire from the University is imperative to ensure 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 three or more full calendar months.
While the first payment will be retroactive to your retirement date, it is recommended
that you have three or more 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) c account vendor to discuss retirement income from that/those account(s).
Additional helpful resources:
- SERS Retirement Application. If early retirement legislation is passed, the MA State Board of Retirement will typically issue a application specific to that purpose.
- MSERS Retirement Handout
- 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 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. If you file your retirement application directly with the SBR remember to also file the MA Group Insurance Commission (GIC) Employment Status Change Form (Form 1A 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 Representative to ensure smooth transition of your GIC insurance and University retirement benefits. Remember to also file the MA Group Insurance Commission (GIC) Employment Status Change Form (Form 1A) with the HRESC to secure continued health insurance coverage at the retiree rate.
Impact of Retirement on Key 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: if 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. With proof of ineligibility for Medicare the GIC offers continuation of a health insurance that is not a Medicare supplement. The GIC Retiree Benefits Decision Guide provides an overview of plan coverages and premiums.
- 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 & ensure you have spent at least as much as you have contributed to the HCSA by your retirement date.
- Payroll-deducted Home / Auto Insurances: benefit ends. Some providers will continue to provide a discount through the end of your current contract 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.
- 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 MA Health Connector, 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.
- Other: you may choose to purchase dental insurance through the Commonwealth Connector, another organization...or not to purchase dental insurance. You are not required to purchase dental insurance.
- 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.
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.