In Massachusetts, public employees earn pension benefits as part of their employment compensation through contributions they and their employers make to state and local pension funds. Those benefits are administered for state employees by the Massachusetts State Employees’ Retirement System, for public school teachers by the Massachusetts Teachers’ Retirement System, and for other public employees by local and county retirement boards.
What is the Optional Retirement Program or ORP?
Under legislation enacted in 1994, public higher education faculty and some staff were given the option of participating in an alternative retirement program called the Optional Retirement Program. For many reasons, MTA members who opted to participate in the ORP instead of the MSERS became dissatisfied with the ORP and a grassroots movement to allow ORP participants to transfer to MSERS began. In 2011, the Pension Reform Act was passed by the Legislature and signed by Governor Deval Patrick. As a result of efforts by MTA members, Section 60 of the Act provided public higher education faculty and staff with a one-time opportunity to transfer from the ORP to the MSERS. Section 60 required that the transfer be approved by the Internal Revenue Service. After the IRS approved the change in September 2013, the process of implementing S-60/ORP began. The implementation process involves both the MSERS and the Board of Higher Education. We expected the implementation process to be completed in 2015, but this does not appear to be possible.
Who is eligible to participate?
MTA members in the following locals are eligible to participate in S-60/ORP:
- Association of Professional Administrators
- Faculty Staff Union Boston
- Massachusetts Community College Council
- Massachusetts Society of Professors Amherst
- Massachusetts Society of Professors Lowell
- Massachusetts State College Association
- Professional Staff Union Amherst
- Professional Staff Union Boston
This toolkit is intended to provide MTA members and leaders in these locals with information to help them understand and make decisions about S-60/ORP. The MTA and its local affiliates are not equipped to provide personal financial advice to members, so members must consult their own financial advisors about the personal financial implications of participating in S-60/ORP. It is the goal of the toolkit to provide members with comprehensive information on S-60/ORP. The MTA has scheduled regular meetings with state officials involved in the implementation process. This toolkit will be updated as new information becomes available.
S-60/ORP Implementation Basics
The procedure established for Eligible Participants to transfer their ORP participation to the MSERS is comprised of five successive steps:
- Notice of Eligibility: The Commonwealth will notify each Eligible Participant of their opportunity to change plans on or before the Section 60 Effective Date.
- Notice of Interest: Each Eligible Participant will receive a Notice of Interest along with their Notice of Eligibility. Participants must complete and return the Notice of Interest to the DHE in order to receive an estimate of the amount of Qualifying Service and the cost to purchase that service under Section 60. Participants must return, and the DHE must receive, the Notice of Interest on or before October 27, 2014, in order to maintain their eligibility for the opportunity to change retirement plans.
- Retirement Plan Information Package: Within 180 calendar days of receipt of a participant’s Notice of Interest Form, the Massachusetts State Retirement Board (MSRB) will provide a “Statement of Service” with the estimated amount of Qualifying Service and the estimated cost to purchase that service. Also included will be a Plan Election Form.
- Plan Election Form: Participants must complete and return the Election Form to the DHE within 180 calendar days of the date the Retirement Plan Information Package was mailed. The Election Form will record their choice of plans: ORP or MSERS.
- Transfer of ORP Assets: The DHE will complete the transfer of ORP assets to the State Retirement Board (“MSRB”) on behalf of participants' electing to change their retirement plan coverage to the MSERS. The transfers should be completed within 90 calendar days of the Department’s receipt of a participant’s Election Form. [Update 10-13-15: The DHE anticipated that these transfers would be completed within 90 days of the DHE’s receipt of the participant’s Election Form; this has proved to be infeasible by a wide margin.]
Source: Board of Higher Education FAQ # 4
Retirement Plan Information Package
- BHE has developed 12 versions of the Retirement Information Package, customized to align with particular circumstances. For illustrative purposes we are including the documents in the package being sent to employees who are active employees AND not planning to retire soon AND are TIAA-CREF participants. Click here to download.
- We are also including 2 additional documents which are sent to anyone who is planning to retire soon. Click here to download.
- Click here to download a Purchase of Service Estimator if you would like to check on the cost figures in your Statement of Service, or if you have not yet received a Statement of Service but would like a preliminary estimate of your cost to transfer to the MSERS.
S-60/ORP Implementation Progress
MTA In Action
Implementation information: The MTA has scheduled regular meetings with the Board of Higher Education and MSERS officials to discuss implementation progress and issues. An update will be posted after each of these meetings.
- Update # 21 (August 10, 2016)
- Update # 20 (July 20, 2016)
- Update # 19 (June 14, 2016)
- Update # 18 (May 10, 2016)
- Update # 17 (April 14, 2016)
- Update # 16 (March 11, 2016)
- Update # 15 (February 12,2016
- Update # 14 (January 12, 2016)
- Update # 13 (December 10, 2015)
- Update # 12 (November 23, 2015)
- Update # 11 (October 14, 2015)
- Update # 10 (September 23, 2015)
- Update # 9 (August 14, 2015)
- Update # 8 (July 20, 2015)
- Update # 7 (June 8, 2015)
- Update # 6 (May 8, 2015)
- Update # 5 (April 16, 2015)
- Update # 4 (March 13, 2015)
- Update # 3 (February 18, 2015)
- Update # 2 (January 23, 2015)
- Update # 1 (November 5, 2014)
- Postcard alerting MTA members to October 2014 deadline for submission of notice of interest
Help and Information for MTA Members
The S-60/ORP application and decision process for MTA members is complicated but important. Members considering whether to transfer from the ORP into the MSERS will need to understand the process and the cost of doing so in light of their personal circumstances. Ultimately, this is a decision that needs to be made by each individual.
Links to information that may be of assistance to members is listed below.
Questions related to the Section 60 Implementation Process
- For questions relating to calculating the cost of transferring, contact the MSERS at email@example.com.
- For questions relating to receipt of your Retirement Information Package or any missing forms, or any other questions about the package, e-mail the BHE at ORP@bhe.mass.edu.
- For questions that are not being addressed by the two state departments, contact the MTA at ORP@Massteacher.org.
Laws establishing ORP and ORP Opt Out
Original Legislation Establishing the ORP — Chapter 495 of the Acts and Resolves of 1993, Which Added Section 40 to the Laws Governing the Board of Higher Education.
Original ORP Opt Out Language
Section 60 of Chapter 176 of the acts of 2011 (An Act Providing for Pension Reform and Benefit Modernization)
Technical Correction to Opt Out Language
Section 45 of Chapter 36 of the Acts of 2012 (An Act Making Appropriations For The Fiscal Year 2012 to Provide for Supplementing Certain Existing Appropriations and for Certain Other Activities and Projects)
Further Corrective language – Current Version of the Law
Section 190 of Chapter 165 of the Acts of 2014 (FY15 Budget)
Legislative history of S-60/ORP
Letter from Internal Revenue Service to MSERS approving S-60/ORP (September 25, 2013)