Hampshire County Retirement System

What is Regular Compensation?

Regular Compensation is defined as:

  1. Compensation received exclusively as wages by an employee for services performed in the course of employment for his employer.
  2. “Wages" shall mean the base salary or other base compensation of an employee paid to that employee for employment by an employer including pre-determined, non-discretionary, guaranteed payments paid by the employer to similarly situated employees, provided, that "wages" shall include payments made by the employer to the employee because of the character of the work, because of the employee’s length of service, because of the time at which the work takes place as a condition of employment in a particular position, because of educational incentives, and payments for holding the training, certification, licensing or other educational incentives approved by the employer for the performance of services related to the position the employee holds and payments made by the employer to the employee calculated as a percentage of base pay.
  3. Regular compensation shall include any part of the wages derived from federal grants except as provided in M.G.L. c. 32 § 3(2)(a)(xi);
  4. Lump-sum retroactive payments which would have been wages if paid in the periods in which the services remunerated thereby were actually rendered will be allocated to said periods rather than being entirely attributed to the time of receipt for the purpose of determining a member’s regular compensation.
  5. “wages” shall not include, without limitation:
    • overtime, commissions, bonuses other than cost-of-living bonuses,
    • amounts derived from salary enhancements or salary augmentation plans which will recur for a limited or definite term,
    • indirect, in-kind or other payments for such items as housing, lodging, travel, clothing allowances, annuities, welfare benefits, lump sum buyouts for workers’ compensation, job-related expense payments, automobile usage, insurance premiums, dependent care assistance,
    • 1-time lump sum payments in lieu of or for unused vacation or sick leave
    • payments for termination, severance, dismissal
    • any amounts paid as premiums for working holidays, except in the case of police officers, firefighters as authorized by law.
    • amounts paid as early retirement incentives or any other payment made as a result of the employer having knowledge of the member’s retirement,
    • tuition, payments in kind and all payments other than payment received by an individual from his employing unit for services rendered to such employing unit, regardless of federal taxability

Appears in: General FAQ , Active Members , Employers