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Membership in the Leominster Contributory Retirement System is a statutory requirement for all employees who work a minimum of 20 hours per week on a permanent basis. Only elected officials have the option of whether or not to join the System.
The amount a member contributes each year is a set statute, and it is determined by the date of your membership into the System. If you became a member prior to January 1, 1975, your contribution rate is 5%. If your membership date was January 1, 1975 to December 31, 1983, your contribution rate is 7%. From January 1, 1984 to June 30, 1996, the contribution rate is 8%. For anyone who enters the System after June 30, 1996, the contribution rate is 9%. In addition to these contributions, any member who enters the System on or after January 1, 1979, must contribute an additional 2% of their salary in excess of $30,000.
Once you become a member of the Retirement System, an Annuity Savings Account is established on your behalf. All of your contributions are deposited into your account. Your contributions, plus any accumulated interest, are credited directly to your account. Each year, the Board issues a statement to all of its active members that reflects the yearly and the total contributions, along with the interest credited to your account.
No. Under State Law, your retirement account has no provisions for withdrawal under any circumstances.
You may receive a refund of your total contributions if you officially resign from your position with the City and it is not your intention to accept another position of employment that requires membership in another Massachusetts Retirement System. If you voluntarily leave employment that began after January 1, 1984 and have less than five years of service, no interest will be refunded to you.
If you have served between five and ten years of service, you will receive half of the interest. If you have over ten years of service, all of the interest will be refunded to you. It is important to note that if you do receive a refund or your retirement contributions, we are required to withhold 20% of your federal tax liability. Alternatively, you can have the entire retirement contribution "Rollover" into a tax-qualified Individual Retirement Account (IRA).
You are eligible to retire at the age of 55 or older if you have at least ten years of creditable service. If you have 20 years of service, you can retire at any age.
Because the Leominster Contributory Retirement Board is a defined benefit plan, your benefits are determined by a formula. The factors used to determine your benefits are: your age at the time of retirement, your amount of creditable service, your group classification and an average of your three highest consecutive years of regular compensation.
The maximum benefit you can receive is 80% of your three highest consecutive years of regular compensation.
If you are a veteran as defined in the Massachusetts General Laws, a veteran's credit will be added to your retirement allowance. The amount of credit will be equal to $15 per year for each year of creditable service you have accrued, not to exceed 20 years or $300. You will receive this additional benefit even if you are already at the maximum, or if the additional $300 puts your total allowance over the 80% maximum.
Vested is a term commonly used to signify the right to a retirement allowance at a later date. Vested benefits are those benefits that a member is entitled to today, not based on additional service. You are vested in the Leominster Contributory Retirement Board once you have accumulated the equivalent of 10 years of full time service.
If you were a member of another retirement system subject to the provisions of Chapter 32 of Massachusetts General Laws, and you withdrew your retirement funds, it is possible to buy back your prior creditable service. The Retirement Office where you previously were a member will verify your prior service, then calculate the amount of your buyback. You must repay the amount withdrawn, plus interest to the date of repayment. You may complete a buyback as a lump sum payment or a payment plan up to the number of years you wish to buy back may be set up.
If you have retirement contributions from a previous public employer directly transferred to our System, you are entitled to maintain the level of contribution you were paying in your previous employment. If you have received a refund of your retirement contributions from your previous retirement system and later became a member of the Leominster Contributory Retirement Board, 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 buy back, your contribution level will remain at the new member rate and will not be reduced to your previous rate.
You earn creditable service towards your retirement allowance for the period during which you are contributing to the retirement system. For members of the System who work 20 or more hours per week on a permanent basis service time starts accruing the day you begin work and continues until the day you separate from service.
No. Regular compensation is the portion of your salary that is subject to retirement contributions. Overtime, bonus pay, severance pay, payments made for unused sick time and certain other payments are not considered regular compensation, are not subject to retirement and can not be used towards your three year average for the purpose of determining your retirement allowance.
If you leave your job and are not going to work for another Government unit which comes under the provisions of Chapter 32, you may be eligible to receive a refund of your contributions. If you are leaving to accept another position with a Massachusetts political subdivision subject to Chapter 32, then you must transfer your retirement contributions directly to your new retirement system.
No. You may request a refund of your funds at any time after termination. If you leave your funds on deposit, however, and later seek a refund, your deductions will only earn interest for two years after your termination date.
Any member who terminates employment may be eligible to withdraw their retirement funds. If the member is vested and has earned the right to a retirement allowance at a later date, careful consideration should be given to the value of the retirement benefit he/she may be forfeiting in exchange for a refund.
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 to retire.
Your contribution and any interest that you receive from your account are subject to federal tax income (with exception of any contribution made prior to January 12, 1988). When processing a refund of your retirement contributions the Retirement Office is required to withhold 20% of the taxable portion of your refund for federal tax. The 20% tax payment is required only if the refund is made directly to the member. To defer tax payments, you must make a direct rollover of your retirement funds to an Individual Retirement Account (IRA), or another type of retirement account with a financial institution. With a direct rollover, no tax is withheld and the entire portion of your refund is transferred. If you have both taxable and nontaxable contributions you may accept receipt of the nontaxable refund without tax consequence and the taxable portion maybe rolled over.
If you are married and die before you retire, your surviving spouse will have the option of collecting a monthly benefit, including a monthly allowance for any children under the age of 18 or if a student is in an institution until the age of 22, or receive a lump sum payment of your contributions. Contact the Leominster Contributory Retirement Board Office at 978-534-7507, ext. 246 for more information.
Yes, I'm still alive! Please continue to send or deposit my monthly benefit check.
Annually every retiree and survivor receiving a monthly benefit check from the Leominster Contributory Retirement Board will receive an "Annual Verification Statement" form. Each retiree/survivor must complete this form, sign and return the form to our office promptly. If this form is returned to our office by mail or delivered by someone other than the named individual, the Retiree's/Survivor's signature must be notarized by a Notary Public. If the retiree/survivor delivers the form in person, a member of our staff will gladly accept this form from them.
Failure to return the "Annual Verification Statement" in the time allotted may result in a suspension of your retirement benefits.
Please call the Leominster Contributory Retirement Office at 978-534-7507, ext. 246 if you have any questions.
As a Massachusetts Public Employment Retiree, there are some restrictions on post-retirement employment for any and all Massachusetts Public Employees (including all cities, towns, public schools, fire / water or health districts, housing authorities, state agencies, state colleges and universities). Restrictions also apply to federal grant funded positions with a Massachusetts Public Employer.
Public sector employment for retirees is limited to both aggregated hours and earnings per calendar year. Hours of compensated work are limited to an aggregate of 960 hours per calendar year. Earnings are limited to the difference between your retirement allowance and the compensation paid for the position you retired from. (For example, if the position you retired from currently pays $30,000 and your retirement allowance is $20,000, you are limited to the difference - $10,000 of earnings - from public sector employment is what you can earn per calendar year). The rationale: as a public sector retiree, you cannot be compensated (from public funds) more than you would have received had you continued working in the position from which you retired. You must cease all public employment when either limit is reached. If you exceed either limitation, you will be subject to reimbursement of all compensation in excess of limits or you must waive receipt of your retirement allowance for the period of re-employment with any public sector employer.
The option you chose when you retire determines the benefit available for your named beneficiary. Please advise your family or other beneficiary that benefits may be available to them and to notify the Leominster Contributory Retirement Board upon your death. They will need to provide us with a copy of your death certificate for us to appropriately payout benefits to them.
If you retired after January 12, 1988 and chose Option C benefit at retirement and your named beneficiary predeceases you, you will be eligible for an increased benefit (Pop-Up) equivalent to Option A calculations. In such a case you will need to notify us and provide us with a copy of your beneficiary's death certificate. Upon notification and receipt of the death certificate, we will adjust your allowance retroactive to the date of your beneficiary's death.
If you chose either Option A or Option B at retirement you may change your beneficiary at any time by completing and submitting a "Change of Beneficiary" form to our office. It is important to note a specific form that can be obtained from the Leominster Contributory Retirement Board is required to change a beneficiary. No change will take effect unless that form is received by our office.
It is also important to keep us informed of changes in addresses for your beneficiary in the event we need to contact them upon your death. To change a beneficiary's address a specific form is not required, simply call or write to the Leominster Contributory Retirement Board, 25 West Street, Room 15, Leominster, MA 01453.
Benefits that you may receive from Social Security may be offset by the pension that you receive from the Leominster Contributory Retirement Board (which is a Government Pension Plan). The amount of offset is determined by Social Security. While you do not need to report your Social Security benefits to us, you do need to report all benefits you receive from us to Social Security. If you are subject to offset by Social Security, you must report all changes in benefits (i.e. COLA increases) to Social Security. Further information is available on the Social Security Administration website.