Worcester State University
Payroll

 

RETIREMENT PLANS


State employees do not contribute to Social Security (FICA). Instead, benefited employees contribute a percentage of their gross salary to either the State Employee Retirement System (SERS) or the Optional Retirement Program (ORP). Part-time, temporary employees contribute a percentage of their gross pay to the Alternate Retirement Program (referred to as OBRA).

The contribution percentage is determined by your service date within the Commonwealth for both SERS and ORP. The rate for OBRA is mandated by legislation.

For employees hired after January 1, 2011, retirement contributions to both SERS and ORP are "capped" at $160,000 per calendar year. That means, that once an employee's year-to-date retirement contributions reach $160,000, there will be no further contributions until the next calendar year.

Membership in SERS is mandatory for all classified staff. Newly hired faculty, adminstrators, and librarians must choose between SERS and ORP within 180 days of employment. Please note the employee's decision is irrevocable!

 

State Employee Retirement System (SERS)

Membership in SERS is mandatory for all classified staff. The money you contribute is yours and is part of your estate. The state does not contribute any additional amount.

For employees hired after June 30, 1996, the basic contribution rate is 9% of regular salary with an additional 2% on any regular salary over $30,000 (that is, a weekly salary greater than $576.92). This deduction is taken before federal taxes (with a deductible on state taxes of up to $2000).

Employees are "vested" after 10 years of state service and are eligible for retirement at age 55 if they became a member prior to April 2, 2012, or anytime after they have completed 20 years of service. Employees who become members on or after April 2, 2012, cannot retire before the age of 60.

Should you leave state service before retirement, you may withdraw your retirement funds by completing a Withdrawal Notice. If you leave with less than ten years of service, you will receive the principle (your contributions) plus 3% of the accrued interest. After ten years of service, you are considered a vested employee and will receive all the principle and interest earned. Because retirement contributions are deducted prior to taxes, upon withdrawal of the funds, you are required to pay taxes on the lump sum payment or you may choose to transfer your funds to a qualified IRA or tax sheltered annuity plan.

For further information, you may visit the State Retirement Board's website at http://www.state.ma.us/treasury/srb.htm and/or view this slide presentation.

Click here to read the latest newsletter from the State Board of Retirement ► SBR Newsletter

 

Optional Retirement Plan (ORP)

Newly hired faculty, administrators, and librarians must choose between SERS and ORP within 180 calendar days of employment. If no decision is made within the 180-day period, membership will default to SERS. It is important to note that the employee's decision is irrevocable.

For employees hired after June 30, 1996, the basic contribution rate is 9% of regular salary with an additional 2% on any regular salary over $30,000 (that is, a weekly salary greater than $576.92). This deduction is taken before federal taxes (with a deductible on state taxes of up to $2000).

The State contributes 5% of the regular salary (minus insurance and overhead costs) to the employee's account. Membership in ORP automatically enrolls the employee in the ORP Disability and Life Insurance Plans at no cost to the employee.

Employees are "vested" immediately upon receipt of the first contribution.

There are three ORP providers:

·         Fidelity Investments

·         TIAA-CREF

·         VALIC

For further information, please contact the Department of Higher Education at 617-727-7785, extension 233. Or visit their website at www.mass.edu/orp.

 

Social Security and Your State Retirement

If you or your spouse are eligible for Social Security benefits as well as a state pension (from either SERS or ORP), you may want to view this slide presentation provided by a representative from SSA who attended one of our retirement workshops. If you have any questions or concerns about your Social Security benefits, please contact the SSA directly.

 

 
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