Yes. Membership in the Massachusetts Port Authority Employees’ Retirement System (MPAERS) is required by law for all regularly employed employees who work at least 21 hours per week.
MPAERS is governed by the provisions of Massachusetts General Laws (MGL) Chapter 32, as are most Massachusetts public pension systems. Any changes in the plan must be made through the legislative process.
For most Massport employees, your hire date is your membership date. Technically, it’s the date you first began making contributions from your regular compensation into the retirement system. If you have a period of employment with Massport in which you did not make retirement contributions, you may want to contact the Retirement Office to inquire about purchasing your prior employment as creditable service.
The amount each employee is required to contribute to the retirement system is set by statute. If you began employment on or after July 1, 1996, you must contribute 9% of your regular compensation to the retirement system. If you were hired any time between January 1, 1984 and July 1, 1996, your contribution rate is set at 8%. Members who joined the system any time between 1975 and 1983 contribute 7%. Those employees who became members prior to 1975 are contributing 5%.
The law also mandates that for members whose employment commenced on or after January 1, 1979, an additional 2% will be withheld on regular compensation over $30,000. This 2% is in addition to the 7%, 8%, or 9% that is already being deducted from total regular compensation.
Your contributions are placed in an individual annuity savings fund, which earns annual interest at a rate comparable to that of a passbook savings account. The interest rate is determined by the Public Employee Retirement Administration Commission and the Commissioner of Banks. This annual interest rate is independent of that earned on the retirement system’s investments.
No. Your future retirement allowance is not based on your annuity savings account balance. It is instead determined by a formula consisting of your age, service, and salary average at your date of retirement. The money in your account is used to fund a portion of this allowance, but the value of your account balance at retirement is not used in calculating your total retirement allowance.
No. Employee contributions are never used to fund administrative expenses. Operating expenses, including fees associated with actuarial and audit services, investment management, consultant, and custodial fees, are funded solely through the system’s investment income.
When you are vested, you have earned the right to a retirement allowance at a later date. You no longer have to remain in service to be eligible to collect it.
You must have 10 years of creditable service in order to be considered vested. If you transfer creditable service from another retirement system, or if you buy back prior or military service, such service is added to your Massport service to determine whether you are vested.
If your membership date is prior to April 2, 2012 and you are a member classified in Group 1 or Group 2, you are eligible to retire at age 55 or older if you have at least 10 years of creditable service. If you are a member classified in Group 4, you are eligible to retire at age 55 or older. If you have 20 years of service, you can retire at any age.
If your membership date is April 2, 2012 or later and your position is classified in Group 1, you are eligible to retire at age 60 or older if you have at least 10 years of creditable service. If your position is classified in Group 2, you are eligible to retire at age 55 or older if you have at least 10 years of service. Members classified in Group 4 are eligible to retire at age 55 or older with no service requirement.
Please note that if you are a member in Group 2 or Group 4 and your membership date is April 2, 2012 or later, the law requires that you must have performed the duties of the Group 2 or Group 4 position for at least 12 months immediately prior to your termination or retirement.
Please see Question 19 for a definition of group classifications.
Because our plan is a defined benefit pension plan, your retirement allowance is determined by a mathematical formula and is not based on the balance in your annuity savings account at your time of retirement. The factors used to determine your retirement allowance are your age, creditable service, group classification, and an average of your three highest consecutive years of regular compensation at your date of retirement.
If your hire date is April 2, 2012 or later, your retirement allowance will be based on a five-year salary average. Please call the Retirement Office for more information.
If you were a member of another retirement system subject to the provisions of MGL Chapter 32, and you withdrew your retirement funds, it is possible to buy back your prior creditable service. The Retirement Office will verify your prior service and calculate the amount of your buyback. You must repay the amount withdrawn, plus interest to the date of repayment. Please note that interest applied to prior service buybacks not initiated within one year of employment will increase by 100%. The current buyback interest rate is 3.375%. The rate after one year of employment will be 6.75%.
You have several payment options when completing a buyback. You may submit a lump-sum payment, contribute through payroll deduction over a period of five years or less, or choose to roll over funds from an IRA, 401(k), 403(b), or 457 plan such as Massport’s deferred compensation plan.
If you have retirement contributions from a previous public employer directly transferred to our system, you are entitled to maintain the level of contribution you were paying previously. Under current regulations, if you received a refund of retirement contributions from your previous retirement system and later became a member of Massport’s system, your contribution rate with Massport would be at the new member rate, regardless of what you were paying in your prior system. If you should later purchase your prior creditable service through a buyback, your contribution level would remain at the new member rate and would not be reduced to your previous rate.
If you were employed by Massport on a temporary basis prior to becoming regular full- or part-time, you may be entitled to purchase this service toward your retirement creditable service. If eligible, you must complete the buyback while you are employed at Massport. Please note that Massport student employment cannot be applied toward a service purchase.
If you had temporary service with another public agency in Massachusetts, you may be entitled to purchase that as well and apply it to your retirement creditable service at Massport. Each person’s situation is different and requires research. Please call the Retirement Office for more information.
You earn creditable service toward your retirement allowance for the period during which you are contributing to the retirement system. For most full-time employees, this service time starts accruing the day you begin work and continues until the day you separate from service. However, if there is a period of time when you are off the payroll, you should consult with the Retirement Office as to how this will affect your total creditable service.
If you are an employee with periods of both part-time and full-time service, your part-time service will be prorated based on actual hours worked. This is also the case if your hire date is March 28, 2019 or later and you are a part-time employee for your entire career. Those employees with part-time service only whose hire date is prior to March 28, 2019 are entitled to receive full creditable service for retirement calculation purposes. Also, due to a State Supreme Court decision (Nancy Madden v. Contributory Retirement Appeal Board), if you worked part-time before MPAERS adopted its Supplementary Regulation on Creditable Service on April 26, 1993, you may be eligible to receive full-time credit for that service. If you are someone who may be affected by the Madden decision, please contact the Retirement Office for more information about how it will impact your total creditable service.
No. Regular compensation is the portion of your salary that is subject to retirement contributions. Overtime, bonus pay, severance pay, and any payments made for unused sick time are not considered regular compensation, are not subject to retirement contributions, and cannot be used toward your final average salary for the purpose of determining your retirement allowance.
Under a recent decision from the Contributory Retirement Appeal Board (CRAB), O’Leary v. Lexington Retirement Board and Public Employee Retirement Administration Commission, vacation buybacks are not to be considered regular compensation for retirement purposes. This ruling is not final, however, as an appeal has been filed in Suffolk Superior Court. Pending final judicial resolution, CRAB has issued an Order of Partial Stay requiring retirement boards to exclude vacation buybacks from any retirement calculation for any member retiring after November 5, 2018. Please contact retirement staff if you have specific questions regarding this issue.
The law determines your group classification based on your position. When you retire, your group number determines which age rate is used in calculating your retirement allowance. The MPAERS board assigns employees to one of four groups as set forth in MGL Chapter 32, Section 3:
- Group 1—General employees, including clerical, administrative and technical workers, laborers, and all others not otherwise classified. Most of Massport’s employees are classified as Group 1.
- Group 2— Logan gate guards and maritime port officers.
- Group 3—State Police officers and inspectors.
- Group 4—Firefighters, licensed electricians, first- and second-class stationary engineers, watch engineers, steam firemen, utility technicians, and other supervisors.
If you have periods of service in more than one group classification, new rules apply. Please contact retirement staff for more information.
No. Your Massport retirement benefit is separate from and not related to participation in the deferred compensation plan. The 457 plan is an optional savings vehicle that allows you to supplement your retirement savings on a tax-deferred basis. It is strongly recommended that this plan be considered as an additional savings option by members.
If you leave your job at Massport and are not going to work for another governmental agency under the provisions of MGL Chapter 32, you may be eligible to receive a refund of your contributions. If you are leaving to accept a position with a Massachusetts political subdivision subject to MGL Chapter 32, you must transfer your retirement contributions directly to your new retirement system.
The amount of interest you will receive depends on your length of service and the nature of your separation from service.
If you have less than 10 years of creditable service and voluntarily resign, you will receive 3% interest on your contributions for each year.
If you have 10 or more years of creditable service and voluntarily resign, you will receive 100% of the accrued “regular interest” for each year. Regular interest is determined annually by the Public Employee Retirement Administration Commission and the Commissioner of Banks and is comparable to that of a passbook savings account. The regular interest rate for 2023 was set at 0.1%. Please note that if you have more than 10 years of creditable service, you are vested and potentially eligible for a future retirement allowance. You should carefully consider any decision to withdraw your funds.
If you are involuntarily terminated, in most cases you will receive 100% of the accrued regular interest for each year regardless of your length of service. If you have over 10 years of creditable service, you could be eligible to receive a future retirement allowance. Contact retirement staff to discuss your options.
No. You may request a refund of your funds at any time after termination. If you leave your funds on deposit, however, and later seek a refund, your deductions will only earn interest for two years after termination. The previous question outlines the criteria used to determine which interest rate will apply.
Any member who leaves their job may be eligible to withdraw their retirement funds. If the member is vested and has earned the right to a retirement allowance at a later date, careful consideration should be given to the value of the retirement benefit they may be forfeiting in exchange for a refund.
If you are vested and leave your job at Massport, you can choose to “defer” your retirement by leaving your money in the system until you are ready to retire.
No. There is no loan provision in this plan. An active member cannot withdraw or borrow money from their annuity savings fund account under any circumstances.
Your contributions and all of the interest you receive from your account are subject to federal income tax. When processing a refund of retirement contributions, the Retirement Office is required to withhold 20% of the taxable portion of your refund for federal tax. This 20% tax payment is required only if the refund is made directly to you. If you are younger than 59½, you may be subject to an additional 10% IRS early withdrawal penalty.
To defer taxation, you must make a direct rollover of your retirement funds to an Individual Retirement Account or another type of qualifying retirement account with a financial institution. With a direct rollover, no tax is withheld and the entire taxable portion of your refund is transferred. If you have both taxable and nontaxable contributions, you may accept receipt of the nontaxable portion of your refund with no tax consequence, and the taxable portion may be rolled over.
If you are married and die before you retire, in most cases your surviving spouse will have the option of collecting a monthly benefit or receiving a lump-sum payment of your contributions.
If you are single, the person you designated on your retirement beneficiary form would be eligible to receive a lump-sum payment of your contributions. However, you may want to consider designating an “Option D” beneficiary that would allow you to provide a lifetime benefit for a child, parent, sibling, or former spouse who has not remarried in the event that you die prior to retirement. Please contact the Retirement Office for more information.
If you have questions about the plan, you should contact the retirement staff. To obtain a copy of either the Massachusetts Public Employee Retirement Guide, the Guide to Disability Retirement for Public Employees, or the Guide to Survivor Benefits for Public Employees, please contact the Retirement Office at 617-568-3951 or access the guides online.