PERAC Memos

PERAC has set the regular interest rate for 2026 at 0.1% per G.L. c. 32, § 22(6)(b), based on the average rates paid on individual savings accounts at a representative sample of at least 10 financial institutions. This rate applies to accumulated total deductions and accrued interest for refunds and retirements processed during calendar year 2026, and will also be credited on December 31, 2026 for outstanding balances as of December 31, 2025.

2026-01-07

This memo addresses a specific anti-spiking calculation scenario for union members subject to both G.L. c. 32, § 106 (vacation buyback) and collectively bargained salary schedules. Collectively bargained increases are exempt from the anti-spiking rules under § 5(2)(f), but vacation buybacks are not. PERAC provides a step-by-step worked example showing how to separate these components: first calculate allowable regular compensation excluding collectively bargained increases, then add them back. Any previously retired member whose pay spiked due to a vacation buyback should have their compensation reviewed under this guidance. PERAC is offering virtual sessions on request.

2026-01-09

PERAC announces the 2026 federal limits that apply to Massachusetts retirement system members under Chapter 46 of the Acts of 2002, which brought state law into compliance with IRC requirements. The 2026 Section 401(a)(17) compensation limit is $360,000, and the Section 415 benefit limit is $290,000 per year for members retiring at age 65 (reduced for those retiring before 62). These limits are indexed annually and affect only the highest-paid employees; most members are unaffected.

2026-01-09

For members who joined a Massachusetts retirement system after January 1, 2011 (Tier 2 members), regular compensation used in benefit calculations is capped at 64% of the federal IRC § 401(a)(17) limit. With the 2026 federal limit set at $360,000, the 2026 Massachusetts cap for post-2011 members is $230,400. Boards must apply this limit when calculating retirement allowances for affected members.

2026-01-09

PERAC has announced the 2026 COLA rate of 2.8%, based on the Social Security Administration's CPI-W increase for the prior year. Pursuant to G.L. c. 32, § 103(c), retirement boards may vote to grant a COLA effective July 1, 2026. Under § 103(i), a board may vote to increase the COLA up to 3.0% with proper notice to the legislative body, but this must occur before June 30, 2026. Every board must notify PERAC through PROSPER within 30 days of their decision, whether or not they grant a COLA.

2026-01-12

At its December 17, 2025 meeting, the Commission voted to continue the existing practice of allowing PERAC staff to approve non-invasive medical test reimbursements up to $100.00 per disability case, per 840 CMR 10:10(3) and 10:15(1)(c). Any tests ordered by a Regional Medical Panel that exceed this amount still require advance Commission approval before being ordered. This annual notice confirms no change to the $100 threshold for 2026.

2026-01-13

Members born on or after January 1, 1951 who are not yet receiving a retirement allowance and are not actively employed by a sponsoring governmental unit must begin taking required minimum distributions (RMDs) by April 1 of the year after they turn 73, per the SECURE 2.0 Act. Boards should promptly send notices to members who turned 73 in calendar year 2025, as their initial distribution deadline is April 1, 2026. A sample notice letter is attached. Boards should urge members to contact the board for counseling given the complexity of rollover rules.

2026-01-14

PERAC is alerting boards to a fraud attempt where a bad actor used stolen personal information (name, date of birth, last four of SSN) to create a self-service portal account for a retiree and then requested a direct deposit change. The attempt was thwarted when the board independently contacted the retiree to confirm the request, which the retiree denied. Boards should review their security procedures, including: requiring matching email/phone on file to create portal accounts, fully hiding bank account numbers on deposit notices, reviewing IT quarantine procedures, and periodically auditing new portal account creation.

2026-01-20

PERAC has distributed updated 2026 buyback/make-up repayment worksheets and cumulative interest factor sheets. The worksheets apply to buybacks under numerous specific sections of G.L. c. 32, with separate worksheets for buyback interest and actuarial interest. Sections 4(1)(g½), 4(1)(l), 4(1)(l½), 4(1)(l¾), 4(1)(n), 4(1)(n½), 4(1)(p), 4(1)(r), 4(1)(s), and 4(2)(c) use buyback interest exclusively; sections 3(3), 3(4), 3(4A), 3(5), 3(6)(d), and 3(8)(b) may use either rate as described in Memo #23/2012. These worksheets are not applicable to § 3(6)(c) buybacks.

2026-01-27

PERAC is requesting boards submit actuarial data for active members, retirees/survivors, and disability retirees as of December 31, 2025, by March 31, 2026 via the PROSPER portal in standard PERAC record format. Boards scheduled for a 2026 actuarial valuation by PERAC should already have received a separate request. After submission, boards will receive data analysis reports through PROSPER identifying errors and questionable items requiring review or correction.

2026-02-03

Pre-employment physicals are a required prerequisite to granting accidental disability retirement under any of the three statutory presumptions (G.L. c. 32, §§ 94, 94A, 94B). While HIPAA prevents boards from requiring employers to submit these records at the time of hire, PERAC strongly encourages boards to provide an optional HIPAA waiver to all new and current members that would allow the board to obtain a copy for future use. This waiver should be developed with board counsel and can be distributed as part of onboarding materials. If no physical can be found, members should be encouraged to supply any physicals taken after entering service.

2026-03-04

Following the legislative changes made by Chapter 73 of the Acts of 2025 (described in Memo #33/2025), PERAC has updated four disability forms to reflect the revised definition of "Violent Act Injury": the Member's Application for Disability Retirement, the Physician's Statement, the Employer's Statement, and the Regional Medical Panel Certificates. This memo supersedes Memo #15/2025 on form updates. Boards must use these new forms going forward; the underlying processing guidance from Memos #28/2024 and #33/2025 has not changed.

2026-03-10

PERAC has issued an updated Tobacco Company List effective April 2026, replacing all prior versions. Under Chapter 119 of the Acts of 1997, retirement systems may not make new investments in companies deriving more than 15% of revenue from tobacco sales. Boards must forward the list to investment advisors (noting it is for Massachusetts public fund clients only) and must divest any non-compliant holdings prudently after consulting with PERAC. PERAC audits portfolios for compliance. Compared to the January 2026 list, the April 2026 list removes Starfleet Innotec Inc from U.S. companies.

2026-03-17

PERAC's Q2 2026 training memo lists educational opportunities from April through June 2026 for retirement board members, including PERAC webinars on Recent Cases of Interest (April 30) and History of Call Fire and PIPOs (May 12), the NCPERS Annual Conference in Las Vegas (May 17–20), and the MACRS Spring Conference in Springfield, MA (May 31–June 3) offering up to 9 credits. Board members must register via PROSPER and submit Training Affidavits for non-PERAC sessions. Note: the MACRS Spring Conference location has changed to Springfield this year.

2026-03-26

PERAC has filed proposed amendments to 840 CMR 6.00 (Standard Rules for Disclosure of Information) to align the regulations with the Public Records Law and Fair Information Practices Act. Key changes include: deleting 840 CMR 6.05 (Notice to PERAC); amending 840 CMR 6.08 to require written member consent before a retirement file may be provided to that member's employer; and renaming 840 CMR 6.13 to direct boards seeking public records guidance to contact the Public Records Division directly rather than requesting a formal advisory opinion. A remote hearing is scheduled for May 21, 2026 at 10 a.m.; written comments accepted through May 22, 2026 at 5 p.m.

2026-04-02

This memo details boards' responsibilities for administering §91A disability retiree earnings compliance via PROSPER, covering non-filers, salary verification tasks, and excess earnings determinations. Boards must: provide hearing notice/opportunity to non-compliant retirees before any termination action; enter 2025 annual pension, annuity, current salary, and offset figures into PROSPER Salary Verification tasks (via individual entry or CSV upload) and submit for calculation; and, for retirees found to have excess earnings, send required notice, respond to the related PROSPER task documenting action taken, and upload board correspondence (not tax documents). Any data entry errors should be reported to Sandra King for correction.

2026-05-21

PERAC Memo #17/2026 announces two PROSPER login security enhancements rolling out this summer: a longer required password (minimum 15 characters, changed only annually) and multi-factor authentication (MFA) requiring a phone-delivered code, with re-entry needed only every 60 days on trusted devices/browsers. Board members and staff will be prompted to update their password upon next expiration and to register a phone number for MFA on a staggered basis, with no action needed until prompted; questions should be directed to IT Director Dan Boyle.

2026-06-01

**PERAC Memo #18/2026 – Tobacco Company List (July 2026)** This memo transmits the updated Tobacco Company List, effective upon receipt, which supersedes all prior lists and identifies companies deriving more than 15% of revenue from tobacco products—investments in which are prohibited under Chapter 119 of the Acts of 1997 (applicable to both individual securities and pooled funds assessed at the pool level). Boards must forward the list (or notice of its availability on PERAC's website) to their investment advisors, clarify it is for Massachusetts public fund use only, and ensure portfolios remain compliant; any non-compliant holdings must be divested prudently and only after consulting with PERAC.

2026-06-05

This memo (Q3 2026) lists PERAC's mandatory training opportunities for retirement board members, reiterating the Chapter 32 requirement that members earn at least 3 credits per year and 18 credits over their term to remain eligible to serve. Boards should ensure members register for live PERAC webinars/events using their correct name and email for automatic credit updates, and submit Training Affidavits (with certificates where applicable) in PROSPER for all other approved trainings, including the various July–October 2026 sessions listed (e.g., Retirement Board Best Practices, Fraud Awareness, Open Meeting Law, Administrator Training, and the Emerging Issues Forum).

2026-06-24

PERAC Memo #20/2026 announces the updated Application for Reinstatement to Service form under G.L. c. 32 §105, effective July 1, 2026–June 30, 2027, which allows retirees to return to member-in-service status. Boards must use this revised form, complete the initial section for interested members, and thoroughly counsel them on the requirements (five years of full-time employment, potential large repayment obligations) before members sign and are reinstated. Boards should contact PERAC's actuarial unit if their investment return assumption isn't among the factors listed on the form.

2026-07-09

PERAC Memo #21/2026 reports that the FY27 budget, signed July 9, 2026 (Sections 30 and 31), raised the add-on in the post-retirement earnings calculation under G.L. c. 32, §§ 91 and 91A from $15,000 to $25,000 — an extra $10,000 a retiree may earn each calendar year. The change covers retirees returning to public-sector work under § 91(b) and disability retirees, whose earnings in both public and private employment are limited under § 91A. It is effective July 9, 2026 and applies to earnings limitations for all of calendar year 2026. PERAC notes that § 91 still requires a retiree to have been retired for a full calendar year before their earnings limit increases by the statutory amount. The memo is informational and asks nothing further of boards.

2026-07-13

PERAC Memo #22/2026 notifies boards that, following the FY27 budget's 3% COLA (effective July 1, 2026), the supplemental dependent allowance under G.L. c. 32 §§ 7(2)(a)(iii) and 9(2)(d)(ii) increases to $1,193.88 annually per eligible child. Boards that have accepted § 7(2)(a)(iii), § 22D, or § 9(2)(d)(ii) must implement this new annual amount for eligible dependent children beginning July 1, 2026. No further action is required beyond updating payment amounts accordingly; questions should be directed to PERAC actuary John Boorack.

2026-07-14

PERAC Memo #23/2026 explains the COLA Reserve Fund and Enhanced COLA created by the FY27 budget (Chapter 137 of the Acts of 2026, Sections 22–27 and 32–38). Both are mandatory for the State and Teachers' Retirement Systems and are local options for every other system. The Enhanced COLA is an annual increase of $100, $200 or $300 for members retired 10–14, 15–19 or 20-plus years as of June 30 (no rounding), paid with the regular COLA and added to the permanent base. A retiree qualifies if they retired before July 1, 2020, their allowance is below 80 percent of the system's average *salary* (not average allowance) per the most recent valuation, and — for superannuation retirees only — they had at least 20 years of creditable service. Option C and Section 9, 12, 100 and 101 survivors qualify if the member would have, measured on the survivor's own allowance. In any calendar year the system's market return beats its assumed rate, 7.5 percent of the excess is credited to the COLA Reserve Fund, an accounting account invested with the rest of the system's assets. No Enhanced COLA is paid until the actuary certifies the fund covers the full actuarial cost of the adopted tier(s); the money then moves to the Pension Reserve Fund and the benefit is paid in July, even in a year the regular COLA is not granted. For local systems the Reserve Fund can only be adopted together with the Enhanced COLA and can only fund it; once the adopted tiers are paid, the whole balance is transferred and the fund goes dormant. At the state level any surplus stays in the fund and accrues toward $1,000 COLA base increases. For local systems, each tier is a separate paragraph of G.L. c. 32 § 103 — (k), (l) and (m) — needing its own vote by the retirement board and then by the local legislative body (for county and regional systems, the advisory council), along with a vote to establish the COLA Reserve Fund. Tiers may be adopted in any order or together, but tiers adopted together must be fully funded together before any is paid. Adoption cannot be revoked. PERAC will add a GL account for the fund to its Chart of Accounts and Annual Statement template.

2026-08-27

PERAC Memo #24/2026 transmits the updated Tobacco Company List (October 2026), which replaces all prior versions effective immediately, identifying companies deriving over 15% of revenue from tobacco sales in which new investments are prohibited under Chapter 119 of the Acts of 1997 (including pooled funds that exceed the 15% threshold on an aggregate basis). Boards should forward the list to their investment advisors (or direct them to PERAC's website), noting the list is restricted to use for Massachusetts public fund clients only. Boards must ensure post-January 13, 1998 compliance in their portfolios and, if any non-compliant holdings are found, must consult with PERAC before divesting in a prudent manner.

2026-09-10

This memo restates the Chapter 32 mandatory training requirement for retirement board members: 18 credits over the course of a member's term, with at least 3 credits earned in each year of the term, and failure to meet either standard prohibits the member from serving beyond the end of the term in which the requirement was not met. It lists the 4th-quarter 2026 training schedule (live and on-demand webinars, conferences, Open Meeting Law, Fraud Awareness, NCTR, NPEA, NCPERS events, New Administrator Training on November 4 in Woburn, and the MACRS Fall Conference December 1-3 in Quincy, offering up to 9 credits with required sign-in at each session). Credits for PERAC-run live webinars, New Administrator Training, and MACRS are applied automatically by staff, provided members register with their full name and the email on record. For all other trainings, members must submit a Training Affidavit in PROSPER, and where non-PERAC training offers a Certificate of Completion, the certificate must be submitted through PROSPER to receive credit. Conflict of Interest Law training now requires creating a login on mass.gov, with a certificate required and credit awarded only once every two years; boards not listed in the dropdown should contact the State Ethics Commission directly. PERAC will also consider credit requests for other organizations' events if approval is requested well in advance of the event.

2026-09-30