PERAC Memo #32 - 2020: Allowable Earnings Determination, pursuant to G.L. c. 32, § 91A

Memorandum Memorandum #32: Allowable Earnings Determination, pursuant to G.L. c. 32, § 91A Date: 10/23/2020 Referenced Sources: PERAC Website PERAC Memo #32, 2020

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TO: All Retirement Boards

FROM: John W. Parsons, Esq., Executive Director

RE: Allowable Earnings Determination, pursuant to G.L. c. 32, § 91A

DATE: October 23, 2020

As you know, G.L. c. 32, § 91A provides for an adjustment of a disability retiree’s allowance if the earnings of the retiree, when added to his or her retirement allowance, exceeds the amount of regular compensation which would have been payable to such retiree if he or she had continued in service in the grade held at time of retirement, plus $15,000.

PERAC will be sending, through PROSPER, a task titled “91A Member salary verification”, which will contain information regarding your boards’ retirees who have reported earnings in an amount that may result in an adjustment to their disability retirement allowance. At this time, we are asking your board to obtain the current salary, as well as retirement allowance figures in order to make this determination.

Once figures are obtained you will be required to respond to the PROSPER task. In order to do this, you must click on each retiree, or export the list to a CSV file, and enter the 2019 annual pension, annuity and current salary amounts, as well as the dependency and workers compensation offset amount, if applicable. Please remember that the Veterans and COLA amounts should be included in the annual pension amount. If PERAC has figures on file you will see them, but if no figure is provided or if the amount has changed, you will need to enter the correct amount in the box provided.

image 1 Once all the figures are entered, click on the submit button, and PROSPER will do the calculation to determine if the retiree is within their allowable earnings. If, after you hit submit and learn that the figures are incorrect, you must contact Sandra King to make any changes.

image2 If the retiree has exceeded their allowable earnings PERAC will send the retiree an Excess Earnings letter. Once PERAC generates the excess letter your board will receive a task through PROSPER notifying you of the excess. The boards will also need to provide notice to the retiree that they have exceeded their allowable earnings. If a refund is due to the retirement system, the retiree's allowance will be suspended until the amount owed is recovered, starting with the next monthly pension benefit. If a hearing is requested by said member(s), the process should be completed so that refunds would commence with the next pension benefit. All documents needed for hearings are now viewable to the boards through PROSPER.

image3 Your board must reply to the PROSPER task of the action taken with regard to the member having excess earnings. The options to respond can be seen below. You will also be given the option to upload a copy of the notification that your board will send your member. A reminder notice will be sent every 30 days until a response is sent to PERAC.

image4 Thank you for your cooperation regarding this process. If you have questions or need any assistance in entering the figures into PROSPER, please contact Sandra King at SEKing@per.state.ma.us.