What happens to your benefits?
Obviously, if you are no longer working for any public employer and are eligible to receive a retirement benefit, you can retire... But what if you are not ready to retire or not yet eligible to receive a retirement benefit?
In that case, you may be eligible to Transfer, Defer, or Terminate your benefits in the Hampshire County Retirement System.
1. Transfer membership rights and benefits to another Mass public retirement system
- If you have taken a position with another Massachusetts public employer, your contributions and creditable service will be transferred to your new employer's retirement system. You retain your original membership rights and benefits including your membership date, contribution rate and creditable service. Everything transfers with you.
2. Defer membership rights and benefits until later date
- If you are vested (have a minimum 10 years of creditable service), you may leave your retirement contributions in the system and receive your pension at a later date (age). You become an Inactive Member (as opposed to a Member-in-Service). As an Inactive Member you retain all of your membership rights and benefits, including your membership date, contribution rate, creditable service and right to receive a retirement benefit in the future. If you return to public service in the future, you will become a Member-in-Service again with the same rights and benefits. With new employment, you would add to your contributions (at same rate) and add to your creditable service until you decide to retire. If you don't return to public service, you can retire as soon as you reach your eligibility age.
- If you are not yet vested but think you may return to public service in the future, you may also leave your contributions in the System and retain your service credit to receive a retirement benefit in the future. You also become an Inactive Member (as opposed to a Member-in-Service). You will retain your membership rights and benefits, including your membership date, contribution rate, creditable service and right to receive a retirement benefit in the future. If you return to public service in the future, you will again become a Member-in-Service with the same membership rights and benefits. With new employment, you would add to your contributions and creditable service until you decide to retire. If you don't, you can decide later to take a withdrawal of your contributions and terminate your membership.
- If you choose to defer and leave your contributions in the System, you may or may not increase your benefits in the future, BUT you will protect the membership rights and benefits you have already earned into the future. As an inactive member, you will not be adding to your contributions, service credit, or average salary, but you will increase your age factor on each birthday (up to maximum 2.5%).
- If you choose to leave your contributions in the System, please be sure to update any change of addresses for you and your beneficiaries with the Board so that we can contact you from time to time to update you on the status of your account.
3. Terminate membership rights and benefits and take a withdrawal of your contributions
• Are already retired and are receiving a retirement benefit under G.L. c. 32,
• Are continuing to be an active member of any Massachusetts contributory retirement system,
• Are on an official leave of absence,
• Are accepting or intend to accept a position in the service of the Commonwealth or a political subdivision governed by G.L. c. 32,
• Are receiving workers’ compensation benefits, have a pending workers’ compensation claim, or are appealing (or intending to appeal) a workers’ compensation claim,
• Are appealing a termination or otherwise seeking to be restored to service.
But, if you are no longer working for any Massachusetts public employer and have no intention of returning to public employment, you may be eligible to request a refund of your contributions or directly rollover your eligible contributions to another qualified retirement plan. If you receive a refund (direct rollover to another retirement plan), you forfeit all membership rights and benefits you have earned to date.
If in the future you return to work for any Massachusetts public employer, you would become a new member with rights and benefits applicable at the time of your re-entry into membership. Although you may be eligible to buy-back your prior service credit, you cannot buy-back other membership rights you have forfeited, including membership date, contribution rate, age factors, or eligibility factors.
Note: Contributions not directly rolled to another qualified plan are subject to Federal taxes and subject to early withdrawal 10% penalty if you are under age 59 1/2. Contributions may now be rolled to a Roth account, however if rolled to a Roth, Federal taxes must be withheld but you avoid the early withdrawal penalty if you are under age 59 1/2.
Application for Withdrawal, Special Tax Notice, and Pre-tax Roll-over Acknowledgement - Click here