Rules revised for service purchases at 'buyback interest'
An important change in the rules governing the buyback of creditable service is fast approaching.
Under Chapter 176 of the Acts of 2011, the interest rate on certain service purchases will double after April 2, 2013. Under the new law, the interest rate will rise from “buyback” interest of 4.125 percent to “actuarial” interest of 8.25 percent.
Because Massachusetts school districts have been inundated with requests to document members’ prior employment histories, however, the Massachusetts Teachers’ Retirement System Board has extended the time for its members to submit the EMPLOYER portion (generally Part 2) of their service purchase applications to Oct. 2, 2013. This deadline change does NOT apply to members of the State Employees’ Retirement System.
MTRS members are still required to file the completed MEMBER’S portion of their service purchase application (generally Part 1) so that it is postmarked by April 2. They can then submit the completed employer portion postmarked no later than Oct. 2.
For more information, members of the Massachusetts Teachers’ Retirement System should visit the MTRS website, www.mass.gov/mtrs.
Members of the State Employees’ Retirement System can find more information at www.mass.gov/treasury/retirement/state-board-of-retire/.