Employees of the Commonwealth of Massachusetts do not contribute to the federal Social Security retirement system. In lieu of that system, if employed while not enrolled in a full-time course of study, employees are required to contribute to an alternate retirement system that is based on benefits status.
Employees Hired in a Position with Benefits
Benefited University employees contribute to the Benefit Guide for the Massachusetts State Employee's Retirement System (MSERS), a defined benefit or pension plan. MSERS pensions are calculated based on the age at which you retire, years of service contributing to the pension system and your highest five consecutive years of salary averaged together. If the position held is exempt from overtime, the employee may elect membership in the Optional Retirement Program (ORP, a defined contribution plan) in lieu of membership in MSERS. Eligible employees are provided 180 days from employment in an eligible position to elect membership in the ORP. Members may invest their contributions, and the Commonwealth's 4.3% matching contributions, with TIAA/CREF, Fidelity or VALIC. Enrollment in the ORP is irrevocable. Useful tools comparing MSERS and the ORP are provided to assist ORP-eligible employees in making this important decision. Thinking about retirement - items for your consideration here!
New employees contribute 9% of salary up to $30,000 and 11% of annual salary above $30,000 to MSERS (or, if elected in lieu of MSERS, to the ORP). Contribution and benefits related to these plans is limited to 64% of the IRS salary limit for members effective on or after January 1, 2011. Mandatory retirement contributions for earnings above this salary limit are made to the University GAP plan. GAP plan members may elect to invest their contributions, and the University’s 5% percent match, with Fidelity.
Voluntary Pre-Tax Retirement Plans
You may invest additional funds into one or more pre-tax retirement accounts in addition to participation in SERS or the ORP:
- UMass 403(b) plan. Read more: University of Massachusetts 403(b) Elective Deferral Savings Plan , UMass 403(b) Enrollment Guide. Instructions on how to change your bi-weekly payroll-deducted 403(b) contribution are available here. Fidelity representatives can also take a change to your contribution via telephone at (800) 343-0860
- 457/SMART plan with Empower Retirement. Read more: 457 SMART Plan.
Voluntary Post-Tax Retirement Plan
Effective July 1, 2014 the Commonwealth of Massachusetts’ 457 SMART Plan is offering a voluntary Roth retirement savings plan. Your contributions to this plan are made on a post-tax basis and distributions from the account are income-tax free within certain guidelines. Compare your options for voluntary pre-tax and post-tax 457 retirement accounts to determine which is right for you: The Roth 457 Option: Is It Right for You?
Employees Hired in a Position without Benefits
While employed in a non-benefited position you will contribute 7.5% of your pay into the Massachusetts OBRA retirement plan. Former employees may withdraw OBRA funds or roll them into another pre-tax retirement account after Commonwealth employment ends by contacting Empower Retirement directly at (877) 457-1900. Non-benefited employees hired into a benefited University should contact Empower Retirement to explore options regarding their existing OBRA funds. Except in very specific situations, funds may not be withdrawn or rolled out of an OBRA retirement account when an individual remains employed by the Commonwealth or expects to be re-employed by the Commonwealth.