PERAC Memo #25 - 2010: Termination Allowances, G.L. c. 32, § 10(2)

MEMORANDUM #25, 2010 M E M O R A N D U M TO: All Retirement Boards FROM: Joseph E. Connarton, Executive Director RE: Termination Allowances, G.L. c. 32, § 10(2) DATE: June 28, 2010 As the result of budgetary constraints it appears that more applications for termination retirement allowances pursuant to G.L. c. 32, § 10(2) are being filed. The Board approvals of these allowances must be submitted to PERAC for review and approval, see PERAC Memos #33/2002 and #3/2003. Pursuant to the provisions of G.L. c. 32, § 10(2), the allowance is the sum of the member’s annuity and a pension equal to one third of his of her average annual rate of regular compensation received during any period of three consecutive years of creditable service for which such rate of compensation was the highest. The allowances of members who are veterans will also include an additional $15 for each year of creditable service up to a maximum of $300. Boards should note that the reference to the three year average annual rate of compensation was added to G.L. c. 32, § 10(2)(a) in 1985 and is only effective for Retirement Boards whose legislative body and chief executive officer have accepted the provisions of Chapter 473 of the Acts of 1984. Our records indicate that very few Retirement Boards have accepted this local option to date, so most Boards will use the five year average. If this local option has been accepted for your Board and it is not reflected on our website, please submit a copy of the acceptance by the legislative body and the Chief Executive Officer. If you have questions, please contact this office.