Frequently Asked Questions

Our staff is here to assist you 8:30 a.m. to 5:00 p.m., Monday through Friday. Please call or email us if we may be of assistance.

Who is eligible for membership in the Middlesex County Retirement System?

A: Membership in the Middlesex County Retirement System is required by law for all permanent and temporary employees.  As of September 1, 2010:

permanent employees must be regularly employed in a permanent position for a minimum of 20 hours per week and earning a minimum of $5,000 per year.

temporary employees must be regularly employed in a position for a minimum of 20 hours per week for a period of six consecutive months, and earning a minimum of $5,000 per year.

Upon establishment of membership, members are allowed to purchase prior non-membership service.

Please note: Employees of all member units of the Middlesex County Retirement System who are employed less than 20 hours per week are ineligible for membership.  Likewise, employees, elected and appointed officials of all member units who earn less than $5,000 per year are ineligible for membership.

How much do members contribute to the Retirement System?

A: The amount each employee is required to contribute to the Middlesex County Retirement System each year is set by statute. If you joined the System on or after July 1, 1996, you must contribute  9% of your regular compensation. If you joined any time between January 1, 1984 and June 30, 1996, your contribution rate is set at 8%. Members who joined the System 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 membership commenced on or after January 1, 1979, an additional 2% percent of regular compensation will be withheld on compensation over $30,000. This 2% is in addition to the standard deduction from your total regular compensation.

Does a member’s contribution to the Retirement System earn interest? If so, how is the interest calculated?

A: Your contributions are placed in your annuity savings account where it earns annual interest at a statutory rate comparable to that of a passbook savings account. The interest rate is determined by the Public Employee Retirement Administration Commission. This annual interest rate is independent of the interest earned on the retirement System’s investments.

Are employee contributions used to fund the administrative expenses of the Retirement System?

A: No, employee contributions are not used to fund the administrative expenses of the Middlesex County Retirement System. The System’s operating expenses are funded solely through the System’s investment income.

What does it mean to be vested and when does it occur?

A: 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 your benefit.  Members who have accrued ten years of creditable service are considered vested.  If you transfer creditable service from another retirement system, or if you buy back prior service, such service is added to your Middlesex County service to determine whether or not you are vested.

When am I eligible to retire?

A: Massachusetts provides different types of retirement benefits.  When you are eligible to retire depends on the retirement benefit that you choose.  Please see the Retirement Benefits and Options link on the Retirees tab for more information.

How is my retirement allowance calculated?

A: The type of retirement benefit for which you apply determines how your retirement allowance will be calculated.  Please see the Retirement Benefits and Options link on the Retirees tab for more information.  In most cases, the factors used to determine your benefit are your age at the time of retirement, the amount of creditable service that you have accrued, your group classification, and your high three-year average salary.  A five-year average salary is used if you established membership on or after April 2, 2012.

Can I purchase creditable service earned in another Massachusetts public retirement system?

A: If you were a member of another Massachusetts contributory retirement system and you withdrew your accumulated total deductions, you may apply to buy back your prior creditable service. Our staff will verify your prior service with the other retirement system and calculate the amount of your buyback. You will be required to repay the amount withdrawn plus interest. You may pay in one lump-sum or request an installment plan.

In addition to a refund buyback, you may be eligible to purchase non-membership service as well (e.g., military service or service as a reserve firefighter).  See the Creditable Service link on the Active Members tab or contact our office for guidance.

Members may rollover funds from deferred compensation or tax-deferred plans with no penalties to purchase creditable service.

Will prior service with another Massachusetts contributory retirement system affect my contribution rate with Middlesex County Retirement System?

A: If you have retirement contributions from a previous public employer directly transferred to the Middlesex County Retirement System, you are entitled to the same contribution rate you were paying in your previous employment. However, if you received a refund of your retirement contributions from your prior service and later became a member of the Middlesex County Retirement System, your contribution rate will be at the new member rate, regardless of what you were paying in the prior system. If you should later purchase your prior service through a refund buyback, your contribution level will remain at the new member rate and will not be reduced to your previous rate.

How do I accrue creditable service?

A: You earn creditable service for the period during which you are contributing to the retirement system. In addition, you may be eligible to purchase creditable service.  Please see the Creditable Service link on the Active Members tab for more information.

Is all of my salary considered regular compensation?

A: No. Regular compensation is the portion of your salary that is subject to retirement contributions. Certain payments are not considered pensionable and cannot be used toward the salary average used in calculating your retirement allowance.  Please see the Regular Compensation link on the Active Members tab for more information.

Does my participation in a deferred compensation plan affect my benefits from Middlesex County Retirement System?

A: No. Your participation in a deferred compensation plan does not affect your retirement allowance with Middlesex County Retirement System.  Deferred compensation plans are optional savings vehicles which allow you to supplement your retirement savings on a tax-deferred basis.

If I leave my job, what happens to my contributions?

A: If you leave your job and are not going to work for another governmental unit subject to the provisions of Massachusetts General Laws Chapter 32, you may be eligible to receive a refund of your accumulated total deductions and interest. If you are leaving employment to accept a position with another unit subject to Chapter 32, you must transfer your retirement contributions directly to your new retirement system.

If I leave my job and decide to withdraw my contributions will I receive all my interest?

A: The amount of interest you receive when you withdraw your accumulated total deductions depends upon your length of service.  Members will receive a return of their accumulated total deductions plus accrued interest provided they are not subject to forfeiture provisions due to a criminal conviction or charged with misappropriation of funds.

Members who voluntarily terminate public service with at least ten years of creditable service will receive 100% of the regular interest that has accrued in their annuity savings account.  Likewise, members who are involuntarily terminated will receive 100% of the regular interest that has accrued.

Members who have accrued less than ten years of creditable service will receive interest at the rate of 3% on their accumulated total deductions.

Please note that members who apply for a refund more than two years after the date of termination of service will receive only the interest accumulated during the two years immediately following termination of service.

If I terminate my employment and leave my money in the Middlesex County Retirement System, can I retire at a later date?

A: If you are vested and terminate employment, you can choose to “defer” your retirement by leaving your money in the system until you are ready and qualify  to retire.

Can an active member withdraw his or her contributions or borrow money from his or her annuity savings account?

A: No. Active members cannot withdraw their accumulated total deductions or borrow against their annuity savings account under any circumstance.

What are the tax consequences if I take a refund of my retirement contributions?

A: Your annuity savings account is comprised of non-taxable and taxable portions. The non-taxable portion is equal to contributions you made prior to January 12, 1988, plus any payments that you made to buy back previous creditable service. The taxable portion of your account is equal to the contributions that you made on or after January 12, 1988, plus any interest you have accrued.

When processing your refund, staff will withhold 20% of the taxable contributions and interest for federal tax withholding if you receive payment directly. To defer tax withholding, you must make a direct rollover of your funds into another tax deferred vehicle such as an Individual Retirement Account (IRA). In some cases, you may also be subject to a 10% early withdrawal penalty.  Members are encouraged to consult an attorney or tax professional prior to withdrawing their funds.

If I die before retirement, what happens to my money?

A: Please see the Death Before Retirement link under the Active Members tab for information or contact our office for guidance.