Chapter 176 (PDF) of the Acts of 2011 has altered the rules, particularly for new hires beginning April 2, 2012.
Membership in the Retirement System is mandatory for all employees of the City of Northampton, Forbes Library, and the Northampton Housing Authority, that meet the criteria for eligibility.
Eligibility requires that an employee be scheduled at a minimum of 20 hours per week, and is not considered intermittent, seasonal, provisional or temporary. Teachers cannot be members of this system and must be enrolled with Massachusetts Teachers’ Retirement Board (MTRB). Once you are a member of the System, you will retain your membership rights even if your schedule falls below 20 hours a week.
Members are categorized into four different groups:
- Group 1 members are officials and general employees including clerical, administrative and technical workers, laborers, mechanics, and all others not otherwise classified.
- Group 2 includes certain employees with hazardous occupations, such as ambulance attendants, licensed electricians, and mental health hospital attendants.
- Group 3 is made up of state police officers.
- Group 4 consists of public safety officers, officials, and employees, such as police officers, firefighters, and certain correction officers.
Each group is entitled to benefits under a separate age/service factor table.
Retirement contributions are withheld on all regular earnings, including retro and incentive pay. Contributions are not withheld on overtime pay or severance pay (including sick and vacation payouts).
Members contribute at one of four deduction rates depending on the date first enrolled with a Massachusetts retirement system:
- 5% - prior to January 1, 1975
- 7% - January 1, 1975 - December 31, 1983
- 8% - January 1, 1984 - June 30,1996
- 9% - on or after July 1, 1996
For members hired on or after April 2, 2012 the deduction rates will be 9% until a member reaches 30 years of creditable service. At that time the deduction rate drops to 6%.
New members that have prior membership will retain their original deduction rate if they did not refund their accumulated deductions from their prior membership.
An additional 2% incremental contribution is withheld for all employees (with a membership date on or after January 1, 1979) earning $30,000 a year or more. The two percent is taken from salary in excess of $30,000. For example, an employee earning $32,000 a year is subject to an additional 2% deduction on $2,000. The 2% is deducted each pay period by annualizing the salary rate of that pay period.