Retirement and Death Benefits for Teachers in Massachusetts
Public school teachers in Massachusetts contribute part of their pay to a retirement system, not to Social Security. It provides pensions when they retire, as well as disability and death benefits. A state commission oversees more than 100 separate retirement systems for public employees. Except for teachers in the Boston schools, the Massachusetts Teachers' Retirement System covers public and charter school teachers. Boston teachers are members of the city's retirement system.
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Retirement
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The retirement system bases pensions on age, years of service and a salary average. The system calculates average salary for the three highest paid consecutive years or for the last three years as of 2011. It applies factors to the average to determine benefit amounts. A teacher with 20 years of service can retire and begin collecting a pension at any age. Teachers aged 55 and older receive benefits if they retire after 10 years of service. For RetirementPlus benefits, teachers must have at least 30 years of service. Retired teachers don't pay Massachusetts state income tax on their pensions from the retirement system, although they do pay federal tax.
Death
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If a teacher dies before retiring, the retirement system provides benefits. Teachers choose between designating a lump sum beneficiary, who receives the teacher's pension contributions plus interest, or a survivor eligible to collect a monthly benefit. Teachers can designate anyone as a lump sum beneficiary; survivors must be a spouse or former spouse, parent, child or sibling and the teacher must have at least two years of service. When a teacher retires, he chooses between three options for survivor benefits. An option that continues monthly payments to a survivor reduces his monthly benefit.
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Numbers
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Based on an actuarial report published in October 2010, the Massachusetts Teachers' Retirement System had 88,673 active members with an average age of 44 and an average salary of $62,135 as of Jan. 1, 2010. It paid an average benefit of $37,067 annually to 53,951 people. Those benefit numbers include disability and survivor benefits as well as retirement benefits. The average regular retirement benefit was $38,637 and the average age for those retirees was just under 70.
Contributions
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Teachers contribute percentages of their pay to the retirement system. For teachers hired after June 30, 2001, or for any teacher who participates in the RetirementPlus system to boost pension benefits, it's 11 percent as of 2011. The number has gone up over time. It's 5 percent for teachers hired before Jan. 1, 1975. It's a withholding tax, taken from paychecks like Social Security tax.
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References
- Public Employee Retirement Administration Commission: Massachusetts Public Employee Retirement Guide
- MTRS: Your Membership in the MTRS
- MTRS: Regular (Superannuation) Retirement Benefits (Including RetirementPlus)
- MTRS: Regular Retirement Overview, Factors, Tables and Worksheet
- MTRS: Survivor Benefits
- PERAC; "Commonealth Actuarial Valuation Report"; Oct. 1, 2010
Resources
- Photo Credit school books image by William Berry from Fotolia.com
