If you membership began prior to April 2, 2012, you are eligible for a retirement allowance when you have at least 10 years of creditable service and are 55 years old, or if you have 20 years of service at any age. If your membership began after April 2, 2012, you are eligible with 10 years of service at age 60.
Your retirement benefit is made up of 2 parts. The ANNUITY portion is based on the total amount of your annuity savings or accumulated deductions and your age on the date of your retirement. The City of New Bedford makes up the difference between the retirement benefit provided by law and what is provided by your annuity. That difference is called the PENSION.
ANNUITY + PENSION = RETIREMENT ALLOWANCE
WHAT FACTORS AFFECT THE AMOUNT OF MY RETIREMENT ALLOWANCE?
The amount of your retirement allowance depends on:
Your length of service;
Your group classification;
If your membership began prior to April 2, 2012, an average of the 3 highest consecutive years of regular compensation is used in the calculation. If you became a member after April 2, 2012, an average of 5 years is used.
“Options” is the term used to describe how your retirement allowance is allotted. Your benefit must be paid to you in lifetime monthly payments, but the apportionment of those payments will differ depending on your option selection. Option choice also determines what benefits, if any, will be paid to survivors after a retiree’s death.
Election of Option A means that you will receive the full retirement allowance in monthly payments as long as you live. All allowance payments will cease upon your death and no benefits will be provided to your survivors.
Option B provides you with a lifetime allowance which is 1-3% less per month than Option A. The annuity portion of your allowance is reduced to allow a lump sum benefit for your beneficiary. Upon your death, your surviving beneficiary(ies) of record will be paid the unexpended balance of your annuity savings account. Although your retirement allowance is not reduced because of a depletion of your annuity savings, generally your accumulated deductions will be used up within 8 to 12 years.
Option C is also known as the joint or last survivor allowance. Selecting this option means that the allowance payments which you will receive during your lifetime will be 10-12% lower than those you would receive under Option A. Upon your death, your designated beneficiary will be paid a monthly allowance for the remainder of his or her lifetime. The allowance will be equal to 2/3 the allowance which was being paid to you at the time of your death.
If your option C beneficiary dies before you do, you will thereafter be paid the full retirement allowance you would have received had you selected option A at the time of your retirement. This conversion is commonly referred to as the option C “pop-up.” All payments cease upon your death.
You must make your selection on or before the date your retirement allowance becomes effective. If you refuse or fail to select an option before the effective date, the law provides that you shall be retired under option B.
Superannuation retirees have no earning limitations when working in the private sector. However, please note if you are reemployed in the service of the Commonwealth of any of its counties, cities, or towns, there are 2 strict earning limitations that may apply: you cannot work more than 960 hours in a calendar year and you cannot earn more than the difference in pay between your retirement allowance and the salary currently being paid for the position for which you retired – after the first year of retirement, $15,000 may be added to this amount.
For a quick estimate of your retirement allowance, click on the appropriate chart below: