Mass State Retirement
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Fall River, MA 02720
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Eligible employees have a choice between State Employee Retirement Plan (SERS) and Optional Retirement Program (ORP). Both plans have the same mandatory pre-tax contribution based on the most recent entry date into the state retirement system. Eligible employees must elect coverage under the ORP within 180 days of becoming an eligible employee, or the default is SERS. The election is irrevocable. For a comparison of the two retirement plans visit Massachusetts Board of Higher Education SERS and ORP Comparison.
The State Employee Retirement Plan (SERS)
The State Employee Retirement Plan (SERS) is a mandatory defined benefit plan in which 9% of the employee’s salary plus an additional 2% of any earnings over $30,000 will be deducted on a pre-tax basis each pay period and invested in the plan. Annually, employees will receive a statement of their account which includes contributions, interest earned, and balance. Vesting is 10 years after credible service. For more detailed information on SERS, please visit Benefit Guide for the Massachusetts State Employee Retirement System.
Optional Retirement Program (ORP)
The ORP is a defined contribution plan. An employee’s retirement benefit would be
based on the total amount contributed and allocated to ORP investment funds and the
investment experience of those funds. An employee is vested immediately for the employee's
own contribution plus the Commonwealth's contribution. The Commonwealth’s gross contribution
is 5% of regular salary. Up to 1% of the Commonwealth’s contribution may go to statutorily
required expenditures. The Commonwealth’s net contribution is currently 4.300%.
|Commonwealth’s Gross Contribution||5.000%|
|Minus Cost of Administrative Overhead||0.335%|
|Minus Cost of Long-Term Disability Insurance||0.181%|
|Minus Cost of Life Insurance||0.184%|
|Commonwealth’s Net Contribution||4.300%|
The Commonwealth’s net contribution is the amount credited to a participant’s ORP account. These employer contributions are calculated with each payroll cycle (26 per year), and are remitted to the ORP Provider as soon as is administratively feasible after the calculation is completed. There are currently three ORP Providers to receive and invest ORP contributions: FIDELITY, TIAA-CREF, and VALIC. The ORP provides a life insurance benefit and long-term disability insurance for active contributing participants upon joining the ORP. The carrier is the Standard Insurance Company. For more detailed information on ORP and a comparison of the ORP and SERS, please visit Massachusetts Board of Higher Education Optional Retirement Program.
One of the two mandatory retirement plans shown above is selected as a result of employment
in a job not covered by social security. Under the Social Security law, there are
two ways your Social Security benefit amount may be affected: Windfall Elimination
Provision and the Government Pension Offset Provision. For more information view Statement Concerning Your Employment in a Job Not Covered by Social Security.