2008 Benefit Payment Schedule.

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 Working After Retirement 

Working in the Public Sector

The retirement laws limit the earnings of all retired public employees who work in the public sector after retirement.  The “public sector” is broadly defined as the Commonwealth and all of its political subdivisions, including cities, towns, authorities, and districts of the Commonwealth.  There are no restricitions when working in the Federal Government or in the public sector in another state.  This law is contained in General Laws Chapter 32, section 91.

The law limits a retiree who is receiving a retirement allowance to 960 hours of employment within the public sector in any calendar year.  A second limitation is the salary which can be paid for such public sector employment.  When added to the retiree’s retirement allowance, the salary cannot exceed the salary that is currently being paid for the position from which the member was retired.  The law places the obligation of enforcing these restrictions upon the Treasurers of the governmental units hiring public sector retirees.

        ·      Section 91 applies to both superannuation and disability retirees.

·      Section 91 applies to any public employment, regardless of whether or not it occurs with the same governmental unit from which the employee retired.

·      It is irrelevant whether an employee-retiree chooses to classify him or herself as a “consultant” or “independent contractor.”  The Section 91 earnings limitations will apply.

·       A retiree may not avoid the limitations in Section 91 by forming a company if the primary reason for the formation is to avoid the limitations.

·      Earnings for “details” which are paid by city or town payroll are included in the Section 91 limitations, regardless of whether the city or town ultimately bills a private entity for the work.

·      The Section 91 limitations apply solely to retirees, not to survivors or beneficiaries.

·      Earnings from elective office, jury service and emergency employment with a public entity are unrestricted.

Example:  Current Salary:  $42,000 - Retirement Allowance: $30,400 = Allowable Public Sector Income: $11,600.  

Working in the Private Sector

A non-disability retiree can earn unlimited salary in the private sector with no impact upon the retiree’s public employee retirement allowance.  A disability retiree, however, is limited to earning the difference between the current salary for the retiree’s former position, minus the current retirement allowance, plus $5,000.  General Laws Chapter 32, section 91A.

Example:  Current Salary:  $54,000 – Disability Retirement Allowance: $38,000 = Allowable Private Sector Income:  $16, 000 + $5,000 = $21,000.  Excess earnings must be refunded to the Middlesex Retirement Board.

Cost of Living Adjustments

After being retired for one year, a retiree is eligible to receive a COLA on July 1st of each following year.  At present, the COLA is set by law at no more than 3% of the first $12,000 of a retiree´s allowance, and requires an affirmative vote of the retirement board.  Since the COLA law became effective in 1999, the Middlesex Retirement Board has granted the maximum COLA each year for its retirees.  Legislation has been filed which would increase the COLA base to 16,000.

Communicating With Your Retirement Board

Retirees should be mindful of the need to stay in touch with the Middlesex Retirement Board before, during and after the occurrence of certain life events such as Divorce, Change of Residence, Nursing Home Care, and Death of a Member or Spouse.  The Middlesex Retirement Board and its capable staff can provide valuable assistance in ensuring that retirement benefits continue unimpeded, in advising whether a power of attorney or guardianship may be required, in reviewing beneficiary designations, and in generally protecting a retiree´s retirement security.

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