Mass State Retirement
The State Employee Retirement Plan (SERS)
The State Employee Retirement Plan (SERS) is a mandatory defined benefit plan in which 9% of the employee’s salary plus an additional 2% of any earnings over $30,000 will be deducted on a pre-tax basis each pay period and invested the plan. Annually, employees will receive a statement of their account which includes contributions, interest earned and balance. Vesting is 10 years after credible service. For more detailed information on SERS, please visit the Massachusetts State Board of Retirement, select Retirement Information, For Current Employee, then New Employees - Understanding Your Retirement Benefits. Non-Unit Professionals, Unit Professionals, and Faculty may choose one retirement plan between the two mandatory retirement plans offered.
Participation in the Optional Retirement Program (ORP) is limited to employees who are otherwise eligible for membership in the State Retirement Plan, but who are not vested under the State Employees Retirement System (SERS), provided they are Non-Unit Professionals, Unit Professionals, or Faculty.
Eligible employees have a choice between SERS and ORP. Both plans have the same mandatory pre-tax contribution based on most recent entry date into the state retirement system (see chart under the SERS section above). Eligible employees must elect coverage under the ORP within 180 days of becoming an eligible employee, or the default is SERS. The election is irrevocable.
The ORP is a defined contribution plan. An employee’s retirement benefit would be based on the total amount contributed and allocated to ORP investment funds and the investment experience of those funds. An employee is vested immediately for the employee's own contribution plus the Commonwealth's contribution. The Commonwealth’s gross contribution is 5% of regular salary. Up to 1% of the Commonwealth’s contribution may go to statutorily required expenditures. The Commonwealth’s net contribution is currently 4.300%.
|Commonwealth’s Gross Contribution||5.000%|
|Minus Cost of Administrative Overhead||0.318%|
|Minus Cost of Long-Term Disability Insurance||0.198%|
|Minus Cost of Life Insurance||0.184%|
|Commonwealth’s Net Contribution||4.300%|
The Commonwealth’s net contribution is the amount credited to a participant’s ORP account. These employer contributions are calculated with each payroll cycle (26 per year), and are remitted to the ORP Provider as soon as is administratively feasible after the calculation is completed. There are four ORP Providers to receive and invest ORP contributions: LINCOLN, TIAA-CREF and VALIC, FIDELITY. The ORP provides a life insurance benefit and long-term disability insurance for active contributing participant upon joining the ORP. The carrier is the Standard Insurance Company. For more detailed information on ORP and a comparison of the ORP and SERS, please visit the Massachusetts Board of Higher Education, then select Optional Retirement Program.