Is Membership mandatory for Montague employees?
1. Yes, any employee who works regularly for the following units: Town of Montague, Gill-Montague Regional School District or Montague Housing Authority; and works at least 20 hours a week is required by law to become a member of the Montague Retirement System.
How is my membership date determined?
2. Your membership date is tyipcally the date you were hired or the first date you began making contributions from your regular compensation to the retirement system. (If you have a period of employment in which you did not make contributions to the retirement system, you should contact the office to inquire about purchasing this prior employment as creditable service.)
How much do members contribute to the Retirement System?
3. The contriubtion rate is set by staute each year. The current rate for employees hired on or after July 1, 1996 is 9% of your regular compensation. The law also mandates that for members whose employment commenced on or after January 1, 1979, an additional 2% of regular compensation will be withheld on compensation over $30,000. This 2% is in addition to the current rate already being deducted from your regular compensation. Those employees who were hired between January 1, 1984 and July 1, 1996 will contribute 8% of their regular compensation, while members joining the system between 1975 and 1983 wil contribute 7%. Those employees who became members prior to 1975 are contributing 5%.
Do member's contributions to the Retirement System earn interest?
4. Yes, your contributions are placed in an individual annuity savings fund, which earns annual interest at a rate comparable to that of a passbook savings account. The interest rate is determined by the Public Employee Retirement Administration Commission and the Commissioner of Banks. This annual interest rate is independent of that earned on the Retirement System's investments.
Does the amount of interest credited to your individual annuity savings fund affect what your overall benefit will be?
5. No. The amount of money in your annuity savings fund at the time of retirement has no bearing on what your benefit will be. The retirement benefit is determined by a calculation of your highest 36 months of regular compensation, years of creditable service and your age at retirement.
Is regular compensation the sames as total compensation?
6. No. Regular compensation is the portion of your salary that is subject to retirement contributions. Over time, bonuses, severance pay, any payments made for unused sick time or vacation time and several other payments are not considered regular compensation and thus do not have retirement contributions withheld at the time of payment.
Can I purchase creditable service earned in another Massachusetts Public Retirement System?
7. Yes, if you were a member of another Massachusetts Public Retirement System subject to the provisions of M.G.L. Chapter 32 and you withdrew your retirement contributions, you may be eligible to buy back that prior service. You must repay the original amount of the refund, plus interest to the date of the repayment. You may complete the buy back as a lump sum payment, pre-tax rollover or in some circumstances through a deferred compensation plan within 5 years from the date of the agreement.
Will prior creditable service affect my membership date or contriubution rate?
8. If you have retirement contributions from a previous retirement system still on account, those contributions can be transferred direclty to our system and you will be entitled to maintain the same level of contributions you were paying in your previous employment. Under current regulations, if you refunded those contributions, you will become a new member of the Montague Retirement System and therefore; you will be subject to the new member contribution rate of 9%, plus 2% on earnings over $30,000.00. Once a member of the Montague System - you could then inquire about purchasing the previously refunded creditable service through a buy back.
When is retirement an option?
9. You are eligible to retire once you are 55 years old with at least 10 years of creditable service or at any age with 20 years of creditable service with a membership date prior to April 2, 2012. Employees who became members on or after April 2, 2012 can retire once they are 60 years old with at least 15 years of creditable service or at any age with 20 years of creditable service.
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