termination

Section 10 governs the retirement rights of members whose public employment ends before they would otherwise reach full superannuation retirement age. It establishes eligibility for superannuation or termination retirement allowances for members who resign, are removed, fail of reappointment, or whose positions are abolished, based on years of creditable service and age. Pre-April 2, 2012 members with 20 or more years of creditable service may retire immediately; those with 10 or more years may defer their allowance to age 55. Post-April 2, 2012 members must have 10 years of service and wait until minimum retirement age. The section also addresses the right to defer receipt of an allowance and return of accumulated total deductions.

Section 11 governs the return of accumulated total deductions to members who are not entitled to a retirement allowance, and the distribution of those deductions to beneficiaries upon a member's death before retirement. It establishes the 60-day payment timeline, a reduced interest rate (3%) for members who leave with fewer than 120 months of service after January 1, 1984, and procedures for the IV-D child support agency to intercept refunds when a member owes child support arrears. The section also addresses dormant accounts — transferring unclaimed deductions to the Pension Reserve Fund after 10 years — and establishes the rights of claimants to recover such transferred amounts.

Section 90 exempts police and fire department members whose service ends by retirement or other termination at age 70 from the civil service layoff protections in chapter 31, sections 41–45, and a related 1923 act provision.

Section 91 generally prohibits retirees receiving pensions from also being paid for public service, with specific exceptions (jury duty, elected office, emergency service, medical panels, etc.); paragraph (b) allows retirees to work up to 1,200 hours/year as long as combined earnings and pension don't exceed the salary for the retired position — or the salary the allowance is based on, whichever is greater — plus **$25,000**. The $25,000 figure was raised from $15,000 by Chapter 137 of the Acts of 2026, effective July 9, 2026 and applying to all of calendar year 2026; the statutory text published at malegislature.gov still shows the former $15,000. See [PERAC Memo #21 of 2026](/memos/2026/21).

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.

This memo announces that the FY2027 state budget (signed July 9, 2026) increased the earnings add-on used to calculate permissible post-retirement earnings under G.L. c. 32, §§ 91 and 91A, from $15,000 to $25,000, effective retroactively for all of calendar year 2026. Boards should apply the new $25,000 add-on when calculating allowable post-retirement earnings for both regular retirees (§91) and disability retirees (§91A), while continuing to apply the existing rule that a retiree must be retired a full calendar year before the higher limit applies. No other action is required, but boards should update any earnings-limit calculations/notices already issued for 2026 to reflect the revised figure.

This memo announces that PERAC's annual review of medical testing fees under 840 CMR 10:10(3) and 10:15(1)(c) has resulted in no change for 2024. The Commission voted at its December 13, 2023 meeting to continue allowing PERAC staff to approve up to $100.00 per case for non-invasive medical tests ordered by a Regional Medical Panel. Tests exceeding that amount still require advance Commission approval. No action is required from boards beyond being aware of this continuing limit.

PERAC releases an updated Application for Reinstatement to Service form under G.L. c. 32 § 105, effective July 1, 2024 through June 30, 2025. This form is used when a superannuation or termination retiree wishes to return to active public employment; signing it converts the individual from retiree status back to member-in-service status. Because reinstatement may require repayment of large sums and mandates at least five years of subsequent full-time employment, boards are urged to counsel members carefully before they proceed.

Chapter 141 of the Acts of 2024 amends G.L. c. 32, § 91(b) to allow retirees returning to public-sector employment to use whichever is greater — the current salary for the position from which they retired, or the salary upon which their retirement allowance was based — when calculating their allowable earnings. The change directly overrides a 2024 CRAB decision in Dixon v. Lynn Ret. Sys. that had forced use of the current position salary only, which sometimes left retirees with no earnings capacity. Retirees who had previously been calculated using the pension-based salary are held harmless and do not need to be recalculated.

PERAC asks boards to review and update all disability retiree records in PROSPER — including deaths, nursing home placements, address changes, allowance waivers, and returns to active status — no later than January 17, 2025, so the database is accurate before 91A forms are mailed. New for the 2024 filing year, all disability retirees will be able to file their 91A (Annual Statement of Earned Income) form electronically; PERAC will notify members via postcard in January and boards should include email addresses when updating PROSPER records. Completed 91A forms should be returned to PERAC's new Medford address by April 15, 2025.

This memo announces that PERAC's annual review of medical testing fees under 840 CMR 10:10(3) and 10:15(1)(c) has resulted in no change for 2025. The Commission voted at its December 18, 2024 meeting to continue allowing PERAC staff to approve up to $100.00 per case for non-invasive medical tests ordered by a Regional Medical Panel. Tests exceeding that amount still require advance Commission approval. No action is required from boards beyond being aware of this continuing limit.

This memo transmits an updated list of public employees who have forfeited their retirement allowance eligibility under G.L. c. 32, § 15 due to misappropriation of funds, conviction of crimes related to governmental funds, or other enumerated offenses, and are therefore no longer statutorily eligible to join a Chapter 32 retirement system. Boards are required to review the attached list (sorted both alphabetically by name and by board) and notify PERAC of any discrepancies, and boards that have any of the listed forfeited members currently active in their system must contact PERAC to verify identity using the last four digits of the member's Social Security number. This is an annual compliance task requiring boards to cross-reference their active membership against the forfeiture list.

This memo transmits the updated Application for Reinstatement to Service from Superannuation/Termination Retirement under G.L. c. 32, § 105, which is effective July 1, 2023 through June 30, 2024. Boards are instructed to complete the first section of the form and provide it to any interested retirees, who upon signing are converted from retiree to member-in-service status; boards should carefully counsel members about the requirements, including repayment of large amounts and the requirement to work at least five years of full-time employment before the reinstatement fully takes effect. Boards with investment return assumptions not shown on the form should contact PERAC's actuarial unit for custom factors.

This memo transmits an updated list of all public employees who have forfeited eligibility to join a Chapter 32 retirement system under G.L. c. 32, § 15 due to misappropriation of funds or conviction of enumerated crimes. Boards are asked to review the attached alphabetical lists and notify PERAC of any discrepancies; if any forfeited member appears active in a board's system, boards must contact Doreen Duane with the last four digits of the member's Social Security number to confirm the individual's identity.

Chapter 80 of the Acts of 2022, signed June 7, 2022, waives the post-retirement earnings and hours restrictions of G.L. c. 32, § 91(b) and (c) for superannuation retirees working in the public sector for calendar year 2022, effective retroactively to January 1, 2022. The waiver will remain in place through December 31, 2022 or up to 90 days after the end of the declared Public Health Emergency, whichever comes first, and does not apply to disability retirees. Compliance with post-retirement restrictions remains the statutory responsibility of the employee and the employer.

This memo announces an updated version of the PERAC Application for Reinstatement to Service from Superannuation/Termination Retirement under G.L. c. 32, § 105, effective July 1, 2022 through June 30, 2023. Boards are directed to carefully counsel members interested in reinstatement, as applicants must repay retirement allowances received and work at least five years of full-time employment after reinstatement. Upon signing the form, the member transitions from retiree status back to member-in-service status.

Sets the 2021 PERAC-approved maximum reimbursement for non-invasive medical testing at $100.00 per case under 840 CMR 10:10(3) and 10:15(1)(c), continuing the prior year's practice. Voted at the November 18, 2020 Commission meeting.

Guidance as COVID Emergency Orders expire June 15, 2021, covering: 91A filing status, annual affidavit notarization rules, board elections resuming, medical panel restart, PERAC office reopening June 1, post-retirement earnings limits reinstated June 15, and return to in-person Open Meeting Law quorum requirements (remote participation rules pending legislative action).

Chapter 20 of the Acts of 2021 (signed June 16) extends two COVID emergency measures: (1) fully remote Open Meeting Law participation is permitted through April 1, 2022; (2) virtual notarization for annual affidavits is extended through December 15, 2021. Updates and supersedes portions of Memo #16/2021.

Announces the updated Application for Reinstatement to Service from Superannuation/Termination Retirement under G.L. c. 32, § 105 (effective July 1, 2021 through June 30, 2022). Members considering reinstatement must repay contributions and commit to at least five years of full-time service; boards should carefully counsel members on the requirements before they sign the form.

Requests boards review and update disability retiree records in PROSPER to reflect all 2021 changes (deaths, nursing home placements, allowance waivers, returns to active status, address changes). Updates must be returned to Sandra King by January 14, 2022, to ensure accuracy before PERAC's February mailing of the 2021 § 91A Annual Statements of Earned Income.

Sets the 2022 PERAC-approved maximum reimbursement for non-invasive medical testing at $100.00 per case under 840 CMR 10:10(3) and 10:15(1)(c), continuing the prior year's practice. Voted at the December 8, 2021 Commission meeting.

Clarifies that IRS Determination Letters issued in August 2014 to all 104 Chapter 32 retirement systems remain valid with no expiration date, per IRS Revenue Procedure 2016-37. Expiration dates included in letters issued before January 4, 2016 are no longer operative; boards may continue to rely on their letters for plan provisions not subsequently amended or affected by a change in law.

Fourth COVID-19 update addressing post-retirement work hour/earnings exclusions during the State of Emergency per Chapter 53 of the Acts of 2020, retirement calculation processing status, a 30-day extension of the Annual Statement deadline to June 1, 2020, medical panel alternatives via records review or teleconference, treatment of FFCRA paid sick leave as regular compensation, and extension of 91A filing deadline to July 15, 2020.

Explains Chapter 53 of the Acts of 2020 suspending G.L. c. 32, § 91 post-retirement work earnings and hours restrictions during the Governor's State of Emergency (beginning March 10, 2020). Hours and earnings during the emergency period are excluded from the CY 2020 limits regardless of whether the work is COVID-related; disability retirees are explicitly excluded from this accommodation.

Releases the updated Application for Reinstatement to Service under G.L. c. 32, § 105, effective July 1, 2020 through June 30, 2021. Members reinstating from superannuation or termination retirement must work at least five years of full-time employment and may be required to repay significant amounts; boards should carefully counsel interested members before the member signs and converts from retiree to member-in-service status.

Supplements Memo #20/2020 to clarify that FFCRA Emergency Paid Sick Leave Act leave paid at 2/3 of regular pay (Reasons 4–6) also constitutes full creditable service and requires retirement deductions. The two-week leave period counts as full-time service; if it falls in a member's high-3 or high-5 years, the actual 2/3-rate pay received is used in the retirement allowance calculation.

Advises boards that PROSPER tasks will soon be issued for disability retirees who did not comply with the 2019 G.L. c. 32, § 91A filing requirement (annual earnings disclosure). Before terminating benefits, boards must provide written notice and a hearing opportunity; affected members retain the right to appeal any termination to the Contributory Retirement Appeal Board (CRAB).

Chapter 227 of the Acts of 2020 (FY21 budget) extends the Chapter 53 waiver of G.L. c. 32, § 91 post-retirement work earnings and hours restrictions through calendar year 2021 for the duration of the Governor's State of Emergency. Disability retirees remain excluded; the waiver applies to any public-sector work during the emergency, not just COVID-related employment. PERAC will issue a memo when the State of Emergency ends.

Requests boards to review and update disability retiree records in PROSPER to reflect all 2020 changes — deaths, nursing home placements, allowance waivers, returns to active status, and address changes. Updates must be returned by January 18, 2021 to ensure accuracy before PERAC's February mailing of the 2020 § 91A Annual Statements of Earned Income.

This memo provides a corrected list of public employees whose pension benefits have been forfeited as of July 2017, noting that one member (Steven Pereira) was incorrectly included on the prior list and should be removed. Boards with any forfeited member on the attached list who are active in their system should contact Kim Boisvert at PERAC with the last four digits of the member's Social Security number to verify the match.

PERAC Memo #20/2016 announces an updated Application for Reinstatement to Service form under G.L. c. 32 §105, effective July 1, 2016 through June 30, 2017, for retirees seeking to return to active membership. Boards must use this revised form, complete the initial portion for interested members, and carefully counsel them on the repayment obligations and five-year full-time employment requirement before they sign and convert from retiree to member-in-service status. Boards should contact PERAC's actuarial unit if a needed investment return assumption factor is not listed on the form.

PERAC Memo #28/2016 requests that retirement boards review and update disability retiree records (deaths, nursing home confinement, waivers, returns to active status, address changes) to maintain an accurate database used for enforcing post-retirement earnings limits and issuing the 2016 Annual Statement of Earned Income (91A) mailing. Boards must also complete the "New Member Data" form for any 2016 accidental or ordinary disability retirees and return all updated information to PERAC no later than **January 16, 2017**.

PERAC Memo #30/2016 addresses the annual review, required under 840 CMR 10:10(3) and 10:15(4), of the maximum amount PERAC will reimburse for non-invasive medical tests suggested by Regional Medical Panels during disability retirement evaluations. At its December 14, 2016 meeting, the Commission voted to maintain the existing cap, authorizing PERAC staff to approve up to $100.00 per case for such testing. No action is required of retirement boards; this is informational, confirming the reimbursement threshold remains unchanged.

PERAC Memo #17/2015 announces an updated version (effective July 1, 2015–June 30, 2016) of the Application for Reinstatement to Service from Superannuation/Termination Retirement under G.L. c. 32 §105. Boards must use this revised form when counseling members interested in reinstatement—completing the board's portion and ensuring members understand the repayment obligations and five-year full-time employment requirement before signing, which converts them from retiree to member-in-service status. Boards should contact PERAC's actuarial unit if their plan's investment return assumption isn't among the factors listed on the form.

PERAC Memo #18/2015 notifies boards that Section 54 of Chapter 46 of the Acts of 2015 amends G.L. c. 32, §23B by extending the maximum permissible contract term (including renewals, extensions, and options) for investment, actuarial, legal, and accounting service contracts from five years to seven years, effective immediately. Boards should review existing contracts: those with terms of five years or fewer may run to completion, but any extension may not push the total term beyond seven years, and boards should apply the new seven-year cap going forward when procuring or renewing covered service contracts.

PERAC Memo #26/2015 asks retirement boards to review and update PERAC's disability retiree database, reporting any 2015 status changes (death, nursing home confinement, waived allowance, return to active status, or address changes) and noting which retirees are exempt from filing the Annual Statement of Earned Income (91A) under Chapter 176 of the Acts of 2011. Boards must also complete the "New Member Data" form for all new accidental or ordinary disability retirees approved in 2015, or for any members missing from the provided list. All updates and forms are due to PERAC by January 13, 2016, to ensure accuracy before the 2015 91A statements are mailed in February.

PERAC Memorandum #14, 2014 announces that the Commission voted to require SEC (or, where applicable, Massachusetts Secretary of State) registration as a prerequisite for issuing an Acknowledgement Letter for any proposed investment. Boards should note that they may not proceed with an investment in an entity that lacks such registration, since PERAC will withhold the Acknowledgement Letter in these circumstances; boards should therefore verify an investment manager's SEC or SOS registration status before submitting investments for approval.

PERAC Memo #25/2014 announces an updated Application for Reinstatement to Service form under G.L. c. 32 §105 (effective July 1, 2014–June 30, 2015), which allows retired members to return to active service. Boards must carefully counsel members considering reinstatement—since it may involve substantial repayment obligations and a five-year full-time employment requirement—and must complete the initial portion of the form before providing it to interested members, whose signature converts their status from retiree to member in service. Boards using an investment return assumption not reflected on the form should contact PERAC's actuarial unit for the appropriate factors.

PERAC Memo #34/2014 introduces GASB Statements 67 and 68, which establish new financial reporting (not funding) standards for public pension plans—GASB 67 for plan reporting (effective for plan years beginning after June 15, 2013) and GASB 68 for employer reporting (effective for fiscal years beginning after June 15, 2014). Boards must collaborate with actuaries, auditors, and investment consultants to ensure accurate census data, financial statements, and required schedules/disclosures (e.g., net pension liability, contribution schedules, discount rate sensitivity); PRIM will assist by supplying PRIT-related data such as money-weighted returns and asset allocation for clients invested in the PRIT Fund. No funding action is required, but boards should begin coordinating with these parties to meet the new reporting requirements on the applicable timelines.

PERAC Memo #35/2014 requests that retirement boards review and update PERAC's disability retiree database, reporting any status changes in 2014 (death, nursing home confinement, waivers, return to active status, address changes) and completing the "New Member Data" form for all newly approved accidental or ordinary disability retirees. Boards must also verify which disabled retirees remain subject to the Annual Statement of Earned Income (91A) requirement under Chapter 176 pension reform waivers. All updates and forms are due back to PERAC by January 16, 2015, to ensure accuracy before the 91A mailing in late February.

PERAC Memo #38/2014 addresses the annual review of the cost cap for non-invasive medical tests suggested by Regional Medical Panels under 840 CMR 10:10(3) and 10:15(4). The Commission voted on December 4, 2014 to maintain the existing threshold, authorizing PERAC staff to approve such testing costs up to $100 per case without additional Commission approval. No action is required by retirement boards beyond awareness of this continuing policy.

PERAC Memo #16/2013 requests that all retirement boards assist in compiling data for PERAC's 2012 Annual Report by reviewing and verifying two enclosed documents: a board data sheet (contact/meeting information current as of today, but board member/administrator names as of December 31, 2012) and a list of investment managers, custodian, and consultant retained as of December 31, 2012. Boards must annotate any corrections (including manager name changes, fund liquidations, or terminations with supporting documentation/dates), or mark the documents "correct" if no changes are needed, and return them to Rose Cipriani by May 3, 2013.

PERAC Memo #17/2013 announces proposed amendments to 840 CMR 3.07 and 3.10 (implementing HEART Act requirements for military service-related death/disability benefits and rollover accounting) and to 840 CMR 3.08 (simplifying IRS Section 415 limit calculations). No immediate board action is required, but boards should review the draft regulations and may submit public comments—by July 19, 2013 for the HEART Act changes and August 2, 2013 for the 3.08 amendments—or attend the scheduled public hearings in Somerville and Worcester in July 2013.

PERAC Memo #19/2013 announces an updated Application for Reinstatement to Service form (G.L. c. 32 §105), effective July 1, 2013 through June 30, 2014, which reinstates retirees to active member-in-service status. Boards must use the revised form, carefully counsel interested members on the repayment obligations and five-year full-time employment requirement before they sign, and contact PERAC's actuarial unit if a needed investment return assumption factor is not listed on the form.

PERAC Memo #23/2013 informs boards that the IRS is renewing the Cycle C determination letter filing process for governmental plans, and that PERAC intends to coordinate a consolidated "master" filing similar to 2008, expected to be even more streamlined for local boards. Boards should anticipate receiving filing materials in October 2013, take any necessary board action at their October or November meetings, and submit required information to PERAC by December 2, 2013; boards choosing not to participate must independently retain tax counsel to pursue their own IRS determination letter.

This memo announces two optional training sessions (October 16 and 17, 2013, at PERAC's Somerville offices) to help boards complete IRS Determination Letter filing forms for Cycle C, following up on Memo #23/2013. Because Ice Miller will prepopulate each board's forms, boards need only review the prepopulated information and obtain the Chairman's signature—no independent action is required, though boards wishing detailed guidance should register with Rose Cipriani to attend a session.

PERAC Memo #28/2013 announces a third and final training session (October 23, 2013, 2:00–3:30 PM at PERAC's Somerville office) to assist boards with completing their IRS determination letter application packets, which are largely prepopulated by tax counsel Ice Miller and thus require less work than in the prior cycle. Boards should ensure they register for the session if they have questions, and must complete and return all determination letter materials to Ice Miller by the December 2, 2013 deadline.

This memo clarifies that the IRS Form 5300 "participant" count (Line 4e) prepared by Ice Miller only included active and retired members, but per IRS instructions, the definition also requires including non-retiree inactive members with nonforfeitable vested benefits and beneficiaries of deceased employees entitled to benefits. Boards must review their IRS Determination Letter packet and hand-write the corrected total participant count (adding any applicable inactives/beneficiaries) on page 4, box 4e, before returning it to Ice Miller; boards that already submitted their packets should instead email Judith Corrigan or Patrick Charles at PERAC to coordinate the correction.

PERAC Memorandum #35, 2013 requests that boards review and update their disability retiree database to reflect any 2013 status changes (death, nursing home confinement, waiver, return to active status, address changes), and to complete the "New Member Data" form for all newly approved disability retirees from 2013. Boards must also help follow up with disability retirees who did not respond to the Affidavit Waiver, as non-respondents will be required to file a 2013 Annual Statement of Earned Income (91A). All information is due back to PERAC by January 15, 2014, to ensure accuracy before the 91A mailing in late February.

This memo announces PERAC's annual review of the medical testing fee cap under 840 CMR 10:10(3) & 10:15(4), confirming that at its December 12, 2013 meeting, the Commission voted to continue the existing $100 per-case limit for non-invasive medical tests ordered through the Regional Medical Panel process. No action is required by boards; this is informational, confirming the fee cap remains unchanged.

This memo announces that PERAC's Placement Agent Policy (originally detailed in Memo #34/2011) is now in effect, requiring investment managers to file a Placement Agent Disclosure Form with both the retirement board and PERAC when responding to RFPs, negotiating contract amendments, or engaging in substantive discussions with a board. Boards must ensure this disclosure form is obtained from managers as part of any ongoing or new contract negotiations, and must incorporate the specified contract terms/remedies (e.g., fee reimbursement) into all new contracts and amendments executed on or after January 1, 2012. Administrators should review any contracts currently being negotiated or amended to confirm compliance with these disclosure and contract-term requirements.

This follow-up to Memo #30/2011 clarifies that the shift substitution documentation/verification policy applies prospectively only—boards should only inquire about shift substitution and unrepaid shifts for members retiring on or after October 26, 2011, and only for shifts occurring on or after that date (not retroactively to Chapter 21 of the Acts of 2009 or earlier). Boards should verify that employers are tracking shift substitution and repayment from October 26, 2011 forward, and may wish to issue guidance to their employers instructing them to establish record-keeping systems to properly certify creditable service and regular compensation for retirement calculations going forward.

This memo requests that retirement boards assist PERAC in compiling data for its 2011 Annual Report by verifying board contact/member information, confirming the list of investment managers, custodian, and consultant as of December 31, 2011, and calculating and reporting their Target Investment Rate of Return. Boards must review, annotate (or mark as correct), and return the data sheet, manager/custodian/consultant list, and target rate of return to PERAC by February 28, 2012.

Memo #32/2012 reminds retirement board members that their 2011 Statement of Financial Interests (SFI) filings, required annually under Chapter 176 of the Acts of 2011, are due at PERAC by May 1, 2012. It also details the confidentiality Security Protocols the Commission unanimously adopted on March 26, 2012 governing how SFIs are received, processed, stored, and accessed by PERAC staff and Commissioners. Action required: board members who have not yet filed their SFI must submit it to PERAC by the May 1, 2012 deadline.

This memo announces new Chapter 32, §15(7), effective immediately, which bars members from receiving a retirement allowance based on salary intentionally concealed from or misreported to the relevant reporting entity; where such misconduct is found, the allowance must be calculated on the lower of the amount actually reported to that entity or to the board, with excess deductions refunded without interest. Boards should note that PERAC (the Commission) is responsible for making the formal determination of concealment/misreporting via a hearing process, and boards must contact PERAC whenever a retirement application raises concerns about unreported or misreported compensation so that an investigation can be conducted before the allowance is finalized.

This memo announces PERAC's updated Application for Reinstatement to Service from Superannuation/Termination Retirement under G.L. c. 32 §105, effective July 1, 2012 through June 30, 2013. Boards should use the revised form when a member seeks reinstatement, carefully counsel members on the requirements (including repayment obligations and the five-year full-time service commitment), complete the initial portion of the form for interested members, and contact PERAC's actuarial unit if a needed investment return assumption factor is not listed on the form.

PERAC Memo #57/2012 requests that retirement boards review and update PERAC's disability retiree database, reflecting deaths, nursing home confinements, allowance waivers, returns to active status, and address changes that occurred during 2012. Boards must also complete the "New Member Data" form for any new accidental or ordinary disability retirees approved in 2012 and help contact members who have not responded to the Affidavit Waiver (noting that non-respondents must file a 2012 Annual Statement of Earned Income). All information is due to PERAC by **January 15, 2013**, to ensure database accuracy before the 91A mailing in late February.

PERAC Memo #59/2012 explains that Chapter 176's changes to superannuation post-retirement earnings limits indirectly affect disabled retirees under Section 91A: total earnings (public and private combined) are limited to $5,000 above the current salary of the position from which the retiree retired, and public sector employment remains capped at 960 hours annually. Boards should use the updated interactive Earned Income Worksheet (posted on PERAC's website) to calculate allowable earnings for disabled retirees returning to work.

PERAC Memo #60/2012 addresses the annual review of the medical testing fee under 840 CMR 10:10(3) and 10:15(4), which caps the cost of non-invasive medical tests the Commission will fund without prior approval when suggested by a Regional Medical Panel during disability evaluations. At its December 10, 2012 meeting, the Commission voted to maintain the existing $100.00 per-case limit that PERAC staff may approve for such testing. No action is required by boards, as this is informational; boards should simply be aware that testing costs exceeding $100.00 require advance PERAC approval.

This memo announces PERAC's annual review of the non-invasive medical testing fee cap under 840 CMR 10:10(3) & 10:15(4), confirming the Commission voted on December 13, 2010 to maintain the existing practice of authorizing PERAC staff to approve up to $100.00 per case for non-invasive medical tests ordered by Regional Medical Panels. No action is required by retirement boards; this is informational, noting that any testing costs exceeding $100.00 still require advance Commission approval.

**Summary:** This memo requests that all retirement boards assist PERAC in compiling data for its 2010 Annual Report by verifying/updating three items: (1) board contact information and membership as of December 31, 2010; (2) the list of investment managers, custodian, and consultant retained as of December 31, 2010, noting any name changes, terminations, or liquidations; and (3) the board's Target Investment Rate of Return based on current asset allocation. **Action required:** Boards must review, annotate/correct, and return the data sheet, manager/custodian/consultant list, and calculated Target Investment Rate of Return to Rose Cipriani at PERAC by **February 22, 2011**, even if no changes are needed (in which case the materials should simply be marked "correct" and returned).

PERAC Memo #22/2011 announces the updated Application for Reinstatement to Service form under G.L. c. 32 §105, effective July 1, 2011–June 30, 2012. Boards should use this revised form when members seek reinstatement from superannuation/termination retirement, carefully counsel members on the significant repayment obligations and five-year full-time employment requirement, complete the initial portion of the form, and contact PERAC's actuarial unit if a needed investment return assumption factor is not listed.

This memo summarizes the Attorney General's regulations (940 CMR 29.10) permitting remote participation at public meetings, and explains how retirement boards may adopt this practice by simple majority vote. No action is required, but if a board chooses to allow remote participation, it must follow specific procedural requirements: a physical quorum (including the Chair or authorized substitute) must be present, remote participation is limited to specified reasons (illness, disability, emergency, military service, or geographic distance), all votes must be by roll call, and detailed documentation of the reason and procedures must be reflected in the minutes.

**Memorandum #33, 2011 – Regular Compensation** This memo consolidates guidance on determining "regular compensation" for retirement purposes following Chapter 21 of the Acts of 2009, the amended 840 CMR 15.03 regulations, and relevant case law (Pelonzi and O'Brien decisions). It provides retirement boards with consolidated lists of characteristics that make payments includable (e.g., base salary, non-discretionary payments for services) versus excludable (e.g., overtime, bonuses, in-kind payments, severance) from regular compensation calculations. Boards should apply this framework when reviewing compensation determinations for members retiring on or after July 1, 2009, though no new filing or reporting action is required beyond ensuring compliance with existing law when calculating regular compensation.

This memo announces PERAC's new Placement Agent Policy, adopted after public hearing in response to Pension Reform legislation, which requires investment managers to disclose detailed information about any placement agents used in connection with investment by Massachusetts public pension systems (compensation, agreements, qualifications, registrations, and any board/staff connections). Boards must ensure managers provide this disclosure information to both the board and PERAC before/during RFP responses, contract amendments, or substantive discussions with managers, and should expect PERAC to issue standardized forms for compliance before January 1, 2012.

Memorandum #39 (2011) provides guidance on implementing Chapter 176's Section 23B contract requirements, directing boards to review all existing vendor contracts for investment, actuarial, legal, and accounting services to ensure compliance by the February 16, 2012 effective date. Boards should confirm that written contracts have defined terms not exceeding five years (including renewals/extensions); contracts already meeting this standard remain valid until expiration, but any contract lacking a term—or exceeding five years—must be amended or rebid through a new procurement process before the deadline to avoid violating the statute. The memo also reminds boards that non-listed services (e.g., software, medical, investigative) remain subject to the general prudent expert fiduciary standard rather than Section 23B's specific procurement process.

PERAC Memorandum #42, 2011 requests that retirement boards update their disability retiree records to ensure PERAC's database accurately reflects post-retirement earnings limits. Boards must review the attached list of disability retirees and report any 2011 status changes (death, nursing home confinement, waiver of allowance, return to active status, or address changes), and complete a "New Member Data" form for any new disability retirees approved in 2011. All updates are due to PERAC by January 17, 2012, to ensure accuracy before the 2011 Annual Statements of Earned Income (91A) are mailed at the end of February.

This memo announces PERAC's annual review of the medical testing fee cap under 840 CMR 10:10(3) and 10:15(4), which governs reimbursement for non-invasive medical tests ordered by Regional Medical Panels during disability evaluations. At its December 12, 2011 meeting, the Commission voted to continue past practice, maintaining the $100.00 per case cap that PERAC staff may approve without further Commission review. No action is required of boards, as this is informational, though boards should be aware that any test costs exceeding $100 require advance Commission approval.

PERAC advises boards that the IRS has issued a "checksheet" requesting additional information related to the pending group Determination Letter request, and that some boards have received this document directly via fax (addressed to tax counsel Mary Beth Braitman with a copy to the board). Boards should take no action themselves—PERAC's tax counsel (Ice Miller) will respond to the IRS on behalf of all boards by the February 13, 2010 deadline—and should simply file the document with their records, as all 105 Massachusetts retirement boards are expected to receive similar correspondence.

This memo requests that retirement boards assist PERAC in compiling data for its 2009 Annual Report by verifying board contact/membership information (as of 12/31/2009), confirming the accuracy of their list of investment managers, custodian, and consultant, and calculating/reporting their Target Investment Rate of Return. Boards must annotate and return the data sheet and manager/custodian/consultant list (marking "correct" if no changes are needed), along with the target rate of return, to PERAC by February 16, 2010.

This memo updates boards on the IRS Voluntary Compliance Program (Cycle C) process, noting that the IRS approved PERAC's adoption of compliance regulations (effective December 11, 2009) as satisfying federal law update requirements for local retirement systems, and that IRS review of individual determination letter applications is now underway with a single assigned agent. Boards need not take any action or respond directly to IRS inquiries regarding their determination letter applications, as PERAC's counsel is coordinating all responses on behalf of the local systems.

This memo announces PERAC's implementation of a policy allowing prospective modification (suspension) of disability retirement allowances under G.L. c. 32, §8(3) for retirees whose earnings have fully recouped their allowance for three consecutive years, beginning with 2007-2009 earnings statements. Boards should be aware that PERAC—not the board—will identify affected retirees, notify them and the board, and conduct the hearing/appeal process, but boards must be prepared to continue withholding a portion of allowance for health insurance premiums and to continue treating affected members as disability retirees for c. 32A §10 and c. 41 §100B purposes.

This memo transmits the final version of 840 CMR 15.03, PERAC's amended regulation defining "regular compensation," effective May 28, 2010, and instructs boards to disregard earlier drafts. Boards must apply the regulation's criteria and statutory exclusions when determining whether payments made on or after July 1, 2009 qualify as regular compensation, noting that excluded items may still count as regular compensation through the end of existing collective bargaining agreements or contracts in effect on May 1, 2009 (but no later than June 30, 2012). Boards should hold off on finalizing determinations regarding clothing allowances pending possible legislative action, and should expect further PERAC guidance related to implementation and the O'Brien v. CRAB decision.

This memo reminds boards that termination allowance approvals under G.L. c. 32, §10(2) must continue to be submitted to PERAC for review and approval, given an uptick in filings due to budgetary constraints. It clarifies that the three-year average compensation calculation (vs. the standard five-year average) applies only if a board's legislative body and chief executive officer have accepted the 1984 local option under Chapter 473. Boards that have accepted this local option but are not shown as such on PERAC's website should submit documentation of that acceptance to PERAC.

PERAC Memorandum #26/2010 announces an updated form (effective July 1, 2010–June 30, 2011) for members applying for reinstatement to service under G.L. c. 32 §105. Boards must complete the initial portion of the form for interested members and provide thorough counseling on repayment obligations and the five-year full-time employment requirement before members sign and convert from retiree to member-in-service status.

This memo announces IRS-required technical amendments to PERAC regulation 840 CMR 3.08, which governs actuarial assumptions used in applying the IRC Section 415(b) benefit limit; the changes are non-substantive and needed to secure the IRS's favorable determination letter for the Massachusetts Retirement Systems. No board action is required beyond optional review of the draft amendment (posted on PERAC's website) and, if desired, submission of public comments or attendance at the October 20, 2010 hearing.

PERAC Memorandum #40, 2010 asks retirement boards to review and update their disability retiree database to ensure accurate tracking of post-retirement earnings limits, since disability allowances are now terminated (not just suspended) for non-compliance. Boards must update statuses for deaths, nursing home confinements, waived allowances, returns to active status, or address changes, and submit a completed "New Member Data" form for all new 2010 disability retirees, with all information due to PERAC by January 19, 2011, ahead of the 91A Annual Statements mailing.

Memorandum #9 (2009) requests retirement boards' assistance in verifying data for PERAC's 2008 Annual Report, including board contact/meeting information, board member and administrator names as of December 31, 2008, and the current list of investment managers, custodian, and consultant. Boards must also calculate and report their Target Investment Rate of Return (distinct from the Actuarial Rate), based on current asset allocation and projected asset class returns. All annotated materials and the target rate calculation were due to Rose Cipriani at PERAC by February 16, 2009.

PERAC Memorandum #11, 2009 addresses the annual review of the maximum reimbursement amount for non-invasive medical tests ordered by Regional Medical Panels under 840 CMR 10:10(3) and 10:15(4). The Commission voted on January 27, 2009 to continue its past practice of authorizing PERAC staff to approve such testing costs up to $100.00 per case, with no action required by retirement boards beyond awareness of this continuing threshold.

This memo alerts boards that the IRS has issued a Pilot Governmental Plan Questionnaire to a sample of governmental pension plans (with a larger round to follow), and that any Massachusetts retirement board plan could be randomly selected despite having already filed a Determination Letter request. If a board receives a questionnaire, it should not complete it independently but should retain a copy for its records and forward the original to PERAC for handling.

PERAC Memo #14/2009 clarifies that G.L. c. 32, §20 (and analogous statutes for the State and Teachers' Retirement Boards) requires that all four other board members be present and vote when selecting the fifth (or seventh, for MTRS) member; a vote taken without full participation of the other members is invalid, though the outcome need only reflect a simple majority. Boards must notify PERAC in writing upon selection of the fifth/seventh member, including a record of the vote confirming that all required members were present and voted.

**Memorandum #22, 2009 — Foresta v. CRAB Summary** The SJC ruled in *Foresta v. Contributory Retirement Appeal Board* that an employer may modify an injured employee's job duties and description, and this modified position—rather than the original job at time of injury—may serve as the basis for evaluating eligibility for accidental disability retirement, provided the modified duties are "similar in responsibility and purpose" to the original job and the modification is not merely a temporary or pretextual accommodation. Retirement boards should apply this standard when reviewing ADR applications involving employees who have been placed in accommodated or modified positions, assessing whether the modified role meets the similarity test before determining disability eligibility. No specific board action is mandated beyond incorporating this legal standard into future ADR case reviews.

PERAC Memo #25 (2009) announces the annual update to the Application for Reinstatement to Service under G.L. c. 32 §105, effective July 1, 2009 through June 30, 2010. Boards should use the revised form, complete the initial portion for interested members, and carefully counsel applicants on the repayment obligations and five-year full-time service requirement before they sign and convert from retiree to active member-in-service status.

This memo corrects PERAC Memo #25/2009 by providing an updated Application for Reinstatement to Service form (effective July 1, 2009–June 30, 2010) under G.L. c. 32 §105, since the prior version incorrectly used the full actuarial interest rate rather than the buyback rate (half the assumed rate) required by Chapter 302 of the Acts of 2008. Boards should use only this revised form going forward, complete the initial section for members seeking reinstatement, and ensure members are properly counseled on the repayment obligations and five-year full-time employment requirement before they sign and convert from retiree to active member-in-service status.

PERAC Memo #32/2009 notifies boards that, following PRIM's termination of its Portable Alpha program and increase in Absolute Return allocation, PRIT's total hedge fund exposure will drop from 11% to 8%, correspondingly lowering the maximum permissible hedge fund allocation for local retirement systems to 8%. Boards already exceeding 8% may retain their current allocations without action, but any board seeking a new or continued allocation above 8% must formally request a supplementary regulation with detailed justification.

PERAC Memorandum #42/2009 announces proposed regulations implementing Chapter 21 of the Acts of 2009, which narrowed the definition of "regular compensation" for payments received after July 1, 2009, and lists specific exclusions (e.g., overtime, bonuses, severance payments, in-kind payments). Until final promulgation (expected after June 2010), boards should continue treating previously-qualifying compensation as regular compensation unless it falls under one of the enumerated exclusions, while noting that certain grandfathered items covered by collective bargaining agreements or contracts in effect on May 1, 2009 remain includible only through June 30, 2012. No immediate board action is required beyond applying these transitional rules pending final regulations.

This memo addresses PERAC's annual review of the maximum reimbursement amount for non-invasive medical tests ordered by Regional Medical Panels under 840 CMR 10:10(3) and 10:15(4). PERAC's Commission voted on October 27, 2009 to maintain the existing $100 per-case cap that PERAC staff may approve without additional Commission review. No action is required by retirement boards; this is informational only.

This memo clarifies prior updates to PERAC's hedge fund guidelines: the asset threshold for boards to independently invest in hedge funds was lowered to $150 million (Memo #37, 2008), and following PRIM's termination of its Portable Alpha Program, the maximum allowable hedge fund allocation was reduced from 11% to 8% (Memo #32, 2009), though boards already exceeding 8% are not required to reduce holdings. No new action is required beyond ensuring boards understand current limits—systems may invest in PRIM's hedge fund segment up to 8% without PERAC approval, hedge fund investments remain limited to funds of funds, and exceptions may still be requested via supplementary regulation.

PERAC Memo #49/2009 asks retirement boards to review and update their disability retiree database to ensure PERAC can accurately enforce statutory post-retirement earnings limits, since non-compliance now results in termination (not just suspension) of a member's allowance. Boards must review the enclosed list to report status changes (death, nursing home confinement, waiver, return to active status, address changes) and complete the "New Member Data" form for all 2009 disability retirees. All updates must be returned to PERAC by January 15, 2010, prior to the mailing of the 2008 Annual Statements of Earned Income (91A).

This memo addresses the annual review required under 840 CMR 10:10(3) and 10:15(4) regarding the maximum cost PERAC will cover for non-invasive medical tests ordered by Regional Medical Panels. PERAC voted to continue its past practice, maintaining the $100 per-case threshold that staff may approve without additional Commission review. No action is required by boards, but administrators should be aware that any testing costs exceeding $100 still require advance Commission approval.

This annual memo clarifies that PERAC's investment regulations impose no meaningful restrictions preventing local systems from adopting asset allocations similar to PRIT, including in alternatives, real estate, international/emerging markets, and hedge funds (up to 10%), and encourages boards to propose new strategies via the supplemental regulation process. Boards are reminded of their fiduciary duty to avoid being overly conservative when pursuing target returns, and are required to continue complying with regulations mandating periodic performance/strategy reviews with investment managers and annual determinations of whether managers are satisfactorily fulfilling their mandates. No new regulatory action is imposed beyond reinforcing these existing compliance obligations.

Memorandum #13 (2008) requests that boards assist PERAC in compiling data for its 2007 Annual Report by verifying and correcting three items: board contact/meeting information and board membership as of 12/31/07, the list of investment managers/custodian/consultant retained as of that date (noting name changes, terminations, or liquidations), and the board's Target Investment Rate of Return per its Statement of Investment Objectives. Boards must review, annotate, and return the data sheets and target rate of return to PERAC (Rose Cipriani) by February 15, 2008, even if no changes are needed—in which case they should mark the materials "correct" and return them by the deadline.

This memo is PERAC's annual compliance reminder covering disclosure practices and conflict-of-interest safeguards. It directs boards to incorporate Disclosure Statements into RFP processes, cross-check vendor disclosures against ADV forms and other retirement boards, verify compliance with 840 CMR 1.03 (including the specific prohibition on Clarke Blizzard and affiliated entities), ensure familiarity with Chapter 268A conflict-of-interest requirements, and review all investment contracts for compliance with 840 CMR 16.02(5) documentation standards. Boards should treat this as an action item requiring internal review of procurement, disclosure, and contract practices to confirm ongoing compliance.

This memo announces PERAC's updated Application for Reinstatement to Service form under G.L. c. 32 §105, effective July 1, 2008–June 30, 2009, for members seeking to return from superannuation/termination retirement to active service. Boards must use this revised form, complete the initial portion for interested members, and carefully counsel them on the repayment obligations and five-year full-time employment requirement before they sign and convert to member-in-service status.

PERAC Memorandum #30, 2008 clarifies the division of financial responsibility for medical documentation in disability retirement cases: under 840 CMR 10.6(1)(b), the applicant is responsible for obtaining and paying for the physician's certificate (though boards may voluntarily offer financial assistance), while under 840 CMR 10.6(1)(g), the board bears fiduciary responsibility—and associated costs—for obtaining authorizations and medical/insurance records needed for the disability review. No new action is required of boards, but administrators should be aware that PERAC is revising the Physician Statement form to streamline the process and reduce costs to applicants.

Memorandum #32/2008 announces PERAC's template approach for requesting IRS Determination Letters on behalf of 103 of the 106 Chapter 32 retirement systems (excluding the State, Teachers', and Boston boards, which are filing separately). Boards wishing to join must complete and return Form 5300, the Local Option Worksheet, Form 2848, and Form 8821, along with a $1,000 check payable to the U.S. Treasury, by December 2, 2008; boards opting out must promptly retain their own tax counsel to file independently. PERAC also offered training sessions (October 14 and at the MACRS conference) to assist boards in completing the required documents.

Memorandum #36 (2008) reminds boards that under 840 CMR 10.11(2), any Clarification Request sent to a medical panel physician must also be copied to PERAC; failure to do so prevents PERAC from tracking the request or issuing the physician invoice needed for payment. Effective December 1, 2008, boards must submit all Clarification Requests directly through PERAC (not solely to the physician), enabling PERAC to monitor 30-day response timelines and help ensure disability determinations are completed within the 180-day statutory deadline under 840 CMR 10.13(1).

This memo summarizes the SJC's decision in Maher v. Retirement Board of Quincy, which upheld pension forfeiture under G.L. c. 32, §15(4) for a member convicted of crimes related to his position, finding that the roughly $576,000 forfeiture was not "grossly disproportional" under the Eighth Amendment's Excessive Fines Clause. Notably, the Court declined to resolve whether the Excessive Fines Clause even applies to pension forfeitures, leaving that question open for future litigation. No specific action is required of boards, but administrators should be aware of this precedent when handling forfeiture proceedings and potential Eighth Amendment challenges.

PERAC Memorandum #40 (2008) asks retirement boards to review and update their disability retiree records for any 2008 status changes (death, nursing home confinement, waived allowance, return to active status, or address change) and to complete the "New Member Data" form for all new accidental or ordinary disability retirees approved in 2008. Boards must return all updated information to PERAC by January 16, 2009, to ensure database accuracy before the annual 91A Statements of Earned Income are mailed—this is especially important given the law change that now terminates (rather than suspends) allowances for non-compliance.

This memo reports that PERAC exercised its authority under 840 CMR 1.03 to remove two individuals—Harry Gannon (Executive Director, Maynard Retirement Board) and Peter Arlos (member, Berkshire Regional Retirement Board)—after each was found by the State Ethics Commission to have violated M.G.L. c. 268A; both subsequently resigned. It reiterates that the regulation bars anyone with such a finding from serving in any capacity (member, officer, employee, consultant, or decision-maker) for a retirement board. No specific action is required of boards beyond awareness, as PERAC will notify boards of future actions taken under this regulation.

This memo covers several investment governance issues: it reminds boards of the requirement under 840 CMR 16.07 to hold periodic performance/strategy review meetings with investment managers (requesting written confirmation these are scheduled/completed), reiterates the five-year re-certification requirement for investment consultants under Regulation 26.04(3), and encourages boards to critically evaluate underperforming managers (including considering index funds) and to pursue greater diversification across asset classes, noting PRIT's advantages in accessing nontraditional/alternative investments. **Action required:** Boards must confirm in writing that manager review meetings are scheduled or completed, and those that hired consultants in 2002 must complete consultant re-certification (via updated regulatory forms, no new search needed).

This memo requests that boards verify data for PERAC's 2006 Annual Report, including board contact/member information (as of 12/31/06), the list of investment managers, custodian, and consultant, and the board's calculated Target Investment Rate of Return. Boards must review the enclosed data sheets, annotate any corrections (including manager name changes, liquidations, or terminations with supporting documentation), and return all materials—along with the Target Rate of Return—to Rose Cipriani at PERAC by February 14, 2007, even if no changes are needed.

This memo confirms PERAC's annual review (as required by 840 CMR 10:10(3) & 10:15(4)) of the cost cap for non-invasive medical tests ordered by Regional Medical Panels. The Commission voted on January 24, 2007 to maintain the existing $100 per-case limit that PERAC staff may approve without further Commission authorization. No action is required by boards, but they should be aware that any panel-ordered test exceeding $100 requires advance PERAC approval.

This memo clarifies the implementation of two local-option laws—Chapter 324 of the Acts of 1983 and Chapter 235 of the Acts of 1994—which grant creditable service to police officers and firefighters laid off in 1981-82 (or subsequently reinstated within three years) for their period of unemployment, outlining the different member buy-back cost requirements under each act and their interplay when a municipality accepted Chapter 324 before October 8, 1985. Boards should note that Chapter 235 has been accepted by eleven municipalities (listed on PERAC's website), and boards whose city/town accepted Chapter 324 of 1983 are asked to notify PERAC by letter, since the Commission has no record of which communities adopted that earlier act.

**Memorandum #20, 2007 – Board Annual Compliance Memorandum** This memo recaps PERAC's compliance focus areas from the past year—ethics training, disclosure statements, and directed brokerage issues—and signals continued emphasis on these areas going forward, including new Ethics Commission seminars available to boards. Boards should proactively review compliance with 840 CMR 1.03 (prohibited dual positions), 840 CMR 16.02 (investment manager contracts and Form ADV Part II submissions), and 840 CMR 16.05 (prohibition on directing brokerage), and confirm/report their compliance status to PERAC as requested in prior memoranda (notably #47/2006).

This memo announces PERAC's updated Application for Reinstatement to Service form under G.L. c. 32 §105, effective July 1, 2007–June 30, 2008, for members seeking to return from superannuation/termination retirement to active service. Boards must use this updated form when processing such requests, completing the initial portion before providing it to interested members, and should carefully counsel members on the requirements (repayment obligations and the five-year full-time employment requirement) before they sign and convert to member-in-service status.

PERAC Memo #44 (2007) announces a link on PERAC's website to a superannuation retirement pension calculator developed by the State Board of Retirement, which provides estimated benefit calculations for Group 1, 2, and 4 members seeking superannuation retirement only (it does not cover disability retirement, termination allowances, or specialized calculations such as State Police, judges, or "20/50" corrections retirements). Boards should note that these are estimates only—actual benefits are calculated solely at retirement under M.G.L. c. 32, and no board is bound by the online estimates—and are encouraged to inform their members that this tool is available for general planning purposes.

This memo requests that boards review and update PERAC's disability retiree database for 2007, reflecting status changes such as death, nursing home confinement, waived allowances, return to active status, or address changes. Boards must also complete the "New Member Data" form for all new accidental/ordinary disability retirees approved in 2007 and return all updates to PERAC by January 16, 2008, to ensure database accuracy before the annual 91A statements are mailed. Note that failure to report status changes is now more critical since noncompliance results in termination (rather than mere suspension) of a member's allowance.

This memo requests that boards assist PERAC in compiling data for the 2005 Annual Report by reviewing and correcting an attached retirement board data sheet (board contact/meeting info current as of today, board member/administrator names as of 12/31/2005) and manager/custodian/consultant list, and by calculating and submitting their portfolio's Target Investment Rate of Return (distinct from the Actuarial Rate). Boards must return the annotated data sheet, manager list, and target rate of return to Rose Cipriani at PERAC by February 10, 2006, even if no changes are needed.

This memo announces a proposed amendment to 840 CMR 15.03, filed with the Legislature on January 31, 2006, clarifying that ad hoc/temporary payments (such as salary augmentation or enhancement plans) generally do not count as regular compensation for contribution or retirement allowance purposes, though a grandfathering provision preserves current treatment for existing contracts (and their successors) that meet G.L. c. 32 requirements. The regulation is not yet in effect—it is subject to a 45-day legislative review period—so boards should note the pending change but need not take action until it is finalized.

This memo addresses several investment governance topics: compliance with mandatory periodic manager review meetings under 840 CMR 16.07, the 5-year re-certification requirement for investment consultants under Regulation 26.04(3), and the importance of portfolio diversification (including consideration of PRIT Fund investment options). Boards should take action by: (1) providing PERAC written confirmation during the year that manager review meetings are scheduled or completed, (2) re-certifying investment consultants hired in 2001 by submitting updated regulatory forms, and (3) reviewing their portfolios' diversification, with PERAC's Investment Unit available to assist with asset allocation questions.

This memo addresses PERAC's annual review, required under 840 CMR 10:10(3) and 10:15(4), of the maximum reimbursement amount for non-invasive medical tests ordered by a Regional Medical Panel during disability evaluations. PERAC has voted to maintain the existing $100-per-case cap, which PERAC staff may approve without further Commission action. Boards need not take any action but should be aware that any test exceeding $100 requires advance Commission approval before the panel can order it.

PERAC Memo #30/2006 announces an updated version of the Application for Reinstatement to Service form under G.L. c. 32 §105, effective July 1, 2006 through June 30, 2007. Boards must use this revised form when counseling members interested in reinstatement, ensuring they understand the repayment obligations and five-year full-time employment requirement, and must complete the initial portion of the form before providing it to members (whose signature converts them from retiree to member-in-service status).

This memo requests that retirement boards review PERAC's attached disability retiree list and update any 2006 status changes (death, nursing home confinement, waived allowance, return to active status, or address change), noting that non-compliance now results in termination rather than suspension of benefits. Boards must also complete the "New Member Data" form for all disability retirements approved in 2006 and return all updates to PERAC by January 12, 2007, ahead of the mailing of 2006 Annual Statements of Earned Income (91A), which will now identify retirees by a PERAC-assigned reference number instead of their Social Security number.

This memo requests that boards verify data for PERAC's 2004 Annual Report, including board contact/member information (as of 12/31/2004), and the list of investment managers, custodians, and consultants (noting any liquidations/terminations via separate letter). Boards must also calculate and report their Target Investment Rate of Return based on current asset allocation, distinct from the Actuarial Rate of Return, and return all annotated materials to Rose Cipriani at PERAC by January 17, 2005.

This memo confirms PERAC's annual determination under 840 CMR 10:10(3) and 10:15(4) regarding the cap on non-invasive medical test costs that Regional Medical Panels may order without prior Commission approval. PERAC voted to continue the existing practice of authorizing PERAC staff to approve such testing costs up to $100.00 per case. No action is required by retirement boards; this is provided for informational purposes as required by the regulation.

This memo serves as a general reminder to retirement boards regarding key investment regulation requirements, including: the need for competitive selection processes for new managers (with an exception for successive venture capital partnerships, but not real estate partnerships absent compelling circumstances); the requirement to obtain PERAC acknowledgment of completed regulatory requirements before funding a new manager; and the obligation under 840 CMR 16.07(2)-(3) to hold annual manager performance review meetings and document satisfactory performance determinations. Boards should continue complying with these regulations, are encouraged to schedule manager meetings in advance for the full year, must provide PERAC with an annual listing of manager meetings held or scheduled, and should review brokerage/transaction costs per 840 CMR 16.05 as part of an overall regulatory compliance review.

PERAC has issued an updated Application for Reinstatement to Service form under G.L. c. 32 §105, effective July 1, 2005 through June 30, 2006, for members seeking to return from superannuation/termination retirement to active service. Boards should carefully counsel interested members on the requirements (including potential large repayments and a minimum five years of full-time employment) before completing the first portion of the form and providing it to the member, whose signature converts their status from retiree to member in service.

**Memorandum 34/2005 Summary:** PERAC is proposing amendments to 840 CMR 15.03 to clarify the definition of "regular compensation" under G.L. c. 32, specifically addressing salary augmentation/enhanced longevity plans that provide temporary, multi-year salary increases (often tied to sick leave buybacks or retirement notice requirements) rather than permanent compensation increases. While the regulation is pending public comment and hearings, boards should carefully scrutinize existing compensation plans against the listed disqualifying factors (e.g., retirement-notice requirements, bonuses, sick leave reductions, or plans creating outsized systemic liabilities), since collective bargaining agreements cannot override G.L. c. 32's definition of regular compensation. Boards are encouraged to share this memo with employers and unions and should reassess any such plans accordingly, though no immediate compliance deadline is imposed beyond the December 13, 2005 comment period.

PERAC Memo #37/2005 requests that boards update their disability retiree records for 2005—reflecting deaths, nursing home confinement, waived allowances, returns to active status, or address changes—and complete the enclosed "New Member Data" form for all disability retirements approved during the year. Boards must return this information to PERAC by January 13, 2006, to ensure accurate data before the 2005 Annual Statements of Earned Income are mailed; the memo also notes that disability allowances are now terminated (not merely suspended) for non-compliance, and that retirees will be assigned a PERAC reference number in place of their Social Security number for security purposes.

This memo requests boards' assistance in compiling data for the PERAC 2003 Annual Report by verifying board contact/member information, confirming the accuracy of listed investment managers, custodians, and consultants (including noting any liquidated funds or terminated managers via separate letter to the Investment Unit), and calculating/reporting the board's Target Investment Rate of Return. Action required: Boards must review and annotate the attached data sheet and manager list, confirm or correct entries, calculate their Target Investment Rate of Return, and return all materials to Lindsay Deaver at PERAC by February 16, 2004.

This memo reminds boards of 840 CMR 26.04(3), which requires retirement boards to seek PERAC re-authorization to continue retaining an investment consultant on or before the fifth anniversary of hiring (and every five years thereafter), by submitting updated Exemption Application and Disclosure Forms—no new search is required. It also reminds boards of their ongoing obligations under Regulation 16.07(2)-(3) to meet annually with investment managers and formally assess whether each is satisfactorily fulfilling its mandate, and includes a GFOA guide as a resource for evaluating/selecting consultants.

This memo transmits the 2004 Repayment Worksheets and instructions for calculating buy-back and make-up payments—used to determine the amount a member owes to restore creditable service tied to previously refunded annuity savings fund balances (plus accrued interest). Boards should use these worksheets (available on PERAC's website) for lump-sum repayment calculations in 2004, applying their own board-specific terms for any installment arrangements; no other action is required beyond adopting the updated calculation tool.

This memo reminds retirement boards of their obligations under 840 CMR 16.07 and 16.05 to regularly review investment manager performance, conduct annual determinations that managers are fulfilling their mandates, and monitor brokerage costs and soft-dollar usage—prompted by a significant investment loss at one Massachusetts system. Boards must confirm compliance for 2003 and going forward for 2004 by submitting either a letter detailing the dates/particulars of reviews and determinations, or copies of board meeting minutes documenting these reviews.

This memo reports the SJC's decision affirming PERAC's definition of "earned income" under G.L. c. 32, §91A, confirming that distributions from a closely held corporation constitute earned income when a disability retiree contributes labor, management, or supervision to their production. The Court also upheld PERAC's authority to issue such interpretive guidance without formal rulemaking and confirmed PERAC's statutory power under §21(4) to review and reverse local board determinations. Boards should continue applying PERAC's established §91A earned income standard (per Memo #64/1998) when evaluating disability retirees' outside earnings, understanding that PERAC's determinations on such matters are legally enforceable.

This memo updates boards on the ongoing federal/state investigations into improper mutual fund trading practices (market timing/late trading) at firms including MFS, PIMCO, Janus, Federated, Franklin Resources, FleetBoston/Columbia, State Street Research, and Putnam, noting Putnam remains the only firm where personnel changes have prompted institutional client terminations. Boards with investments at affected firms should evaluate whether performance, client service, and portfolio management team stability remain satisfactory, and should seek assurances on the firms' compliance/ethics controls, consulting their investment consultant or PERAC's Investment Director Robert Dennis as needed. No mandatory action is required beyond this due diligence review.

This memo announces new G.L. c. 32, §105 provisions allowing superannuation/termination retirees to reinstate to service by repaying their retirement allowance plus interest and working at least five years full-time, and it provides the accompanying application form. Boards must complete the initial portion of the form, carefully counsel interested members on the repayment obligations and requirements before they sign (converting them from retiree to active member status), and coordinate with other retirement systems when reinstatement occurs in a different system, including handling payments under §3(8)(c).

PERAC is reviewing the methodology behind the Option B annuity factors released on November 30, 2004, after receiving questions about them; any resulting changes are expected to be minimal. Boards should not use the November 30 Option B factors until PERAC issues a final determination, though the Option A factors released at the same time remain unchanged and unaffected.

This memo requests that boards review PERAC's disability retiree list and update any 2004 status changes (deaths, nursing home confinement, waived allowances, return to active status, address changes), noting that failure to report such changes is now more critical since non-compliance results in termination rather than suspension of benefits. Boards must also complete the New Member Data form for all disability retirees approved in 2004 and return all updates to PERAC by January 21, 2005, so the database is accurate before the Annual Statements of Earned Income are mailed.

This memo requests boards' assistance in compiling data for the PERAC 2002 Annual Report, including verification of board contact/member information, and confirmation of investment managers, custodians, and consultants on record. Boards must review and annotate the enclosed data sheet and manager list (noting any discrepancies, terminations, or liquidations via separate letter), calculate and report their Target Investment Rate of Return, and return all materials to PERAC by February 14, 2003.

This memo reminds boards that PERAC maintains an ongoing list of each board's investment managers, consultants, and custodians, and requires boards to report any changes—terminations, pooled fund liquidations, name changes, or new consultants/custodians—in writing within 30 days of occurrence. It also references Memo #13/1999 for the specific documentation required when a board selects a new manager or consultant.

This memo announces that PERAC's Retirement Board Travel Regulations (840 CMR 2.00 et seq.) took effect June 6, 2003, superseding prior Travel Guidelines with two notable stricter provisions: no reimbursement for personal phone calls or for meals of non-board members/staff. Boards with previously approved supplemental travel regulations are automatically deemed compliant; boards without approved supplemental regulations must adopt them—addressing travel routing, rental car use, personal vehicle mileage rates, daily meal reimbursement caps (including high-cost location exceptions), and board credit card authorization—and should also develop Travel Authorization and Reimbursement forms.

PERAC Memo #42/2003 alerts boards that the mutual fund trading-abuse investigations have expanded beyond Putnam to include Invesco, Alliance Capital, and MFS, though PERAC believes no board assets were invested in the affected retail funds and no institutional clients have terminated relationships with these firms. Boards with current or prospective investments with these managers should proactively discuss the allegations with their consultants and the firms' client service officers, using the due diligence criteria outlined in Memo #38/2003 as a guide. No mandatory divestment or reporting action is required at this time.

PERAC Memo #11/2002 requests that boards assist in compiling data for the 2001 Annual Report by verifying three items: current board contact/meeting information (with board member/administrator names as of 12/31/2001), the accuracy of the attached manager/custodian/consultant list (noting any name discrepancies, terminations, or liquidations), and the board's calculated Target Investment Rate of Return. Action required: Boards must review, annotate/correct, and return the data sheet and manager list, along with their Target Investment Rate of Return, to Lindsay Deaver at PERAC by March 1, 2002; any terminated managers or liquidated funds must be reported in a separate letter to the Investment Unit.

This memo announces FY2003 statutory amendments to G.L. c. 32, §§ 10(2) and 21(1)(d), effective July 1, 2002, requiring employers to certify under penalty of perjury the basis for a member's termination retirement, and requiring PERAC to review all board grants of such retirements (applying the same standard used for disability retirement reviews, with a 30-day action window). Boards must immediately begin using the two enclosed forms—the employer certification form and the PERAC submission form—for all termination retirement applications with effective dates on or after July 1, 2002, and must submit these applications to PERAC for review before finalizing grants.

PERAC Memo #6/2001 provides several clarifications on investment procedures: it confirms there is no formal "emergency" exception for terminating managers without competitive process (though PERAC will expedite review of such situations if notified), clarifies that Guideline 99-2 covers only minor mandate/name changes while Guideline 99-3 successor-partnership provisions do not apply to real estate, and reminds boards that PERAC's "Qualified Manager" approval/waiver process applies only to international, real estate, and alternative investment managers—not domestic equity/fixed income managers. Boards should update outdated performance benchmarks to reflect actual/target asset allocations, ensure RFP language to prospective managers is accurate regarding PERAC approval requirements, and apply competitive process requirements to all investment-related service providers (e.g., commission recapture dealers, distribution managers), not just managers, consultants, and custodians.

This memo announces PERAC's annual determination under 840 CMR 10:10(3) and 10:15(4) regarding costs for non-invasive medical tests ordered by regional medical panels. For 2001, the Commission maintained the existing fee schedule, capping assumed costs at $200 per panel for both disability retirement and restoration-to-service examinations, with any excess requiring the Executive Director's approval. Boards need not take action but should be aware of this cap when processing panel-related test costs.

This memo asks retirement boards to verify PERAC's records of investment managers, custodian, and consultant retained as of December 31, 2000, for use in the PERAC 2000 Annual Report—note that pooled funds (mutual funds, commingled funds, etc.) count as investment managers for this purpose. Boards must notify PERAC in writing of any discrepancies (including name differences) and report any liquidations or terminations with dates; if no response is received by February 12, 2001, PERAC will treat its records as accurate.

This memo clarifies that the value of personal use of employer-owned/leased vehicles must be treated as regular compensation for retirement purposes whenever reported as income on a member's W-2. It further explains IRS rules under §1.274-5T(k) governing when personal use of certain vehicles—particularly clearly marked police/fire vehicles and unmarked law enforcement vehicles—may be exempt from federal taxation and thus not reflected on a W-2, but stresses that tax-exempt status is determined by the employer under federal rules, not by the board or PERAC. Boards should apply these standards when determining regular compensation and should contact PERAC individually regarding personal use of any other non-W-2 employer vehicles not covered by this guidance.

PERAC Memo #8/2000 clarifies the use of newly posted templates for disability forms (available on PERAC's website, not to be emailed for confidentiality reasons), explains completion details for medical release forms and the 5-year record request period, and confirms that "Basis of Claimed Disability" information comes from the physician, not the board. It also announces a streamlined Section 8 CME/Restoration-to-Service process: boards should complete and return the "Current Information on Members Retired for Disability" form for selected retirees and flag any circumstances affecting timing, but should **not** submit full disability files or prior re-examination records unless specifically requested by the PERAC case manager.

This memo clarifies PERAC's guidance on board member and staff attendance at the 2000 NCPERS annual conference, addressing confusion about the appropriate use of retirement funds for related travel expenses. While boards retain discretion to approve conference attendance and expenditures in advance, they must ensure that any personal or extended travel (e.g., through MACRS travel offers) is not paid for with retirement system funds—such costs must be segregated and borne directly by the individual. Boards should communicate this expectation to attending members and staff before approving conference-related expenses.

PERAC Memo #25/2000 clarifies that payments for unused vacation and personal days may be classified as regular compensation if they are regular, recurring, and made under a written policy or collective bargaining agreement, are based on days actually earned in the year of purchase (excluding sick days), are not tied to retirement notice, are available non-discriminatorily, and are reasonable in amount so as not to burden the system. Boards are required to review all relevant employer policies and contracts to determine, on a prospective basis only, whether such payments meet these criteria for treatment as regular compensation.

This memo reports the Appeals Court decision in DuPont v. Commissioners of Essex County, which confirmed PERAC's prior position (Memo #23/1997) that members terminated before the 1996 repeal of G.L. c. 32, §16(2) are not entitled to pre-termination notice and hearing under that section. Boards should not apply §16(2) or conduct hearings under it for any member terminated either before or after the section's elimination; no further action is required beyond discontinuing any such practice.

PERAC Memo #12/1998 announces a survey of all Massachusetts contributory retirement systems regarding computer hardware, network configuration, and Internet access, intended to help PERAC plan training/conference facilities and better tailor its services to boards' technology needs. Boards using computers must complete and return the survey to Sarah Kelly by March 31, 1998; boards relying solely on manual recordkeeping are exempt from completing the survey but must notify PERAC of any automation plans (or explain why they intend to remain manual).

PERAC Memo #17/1998 notifies all retirement boards that the maximum COLA allowable for FY99 (under systems that have accepted Chapter 17 of the Acts of 1997) is 2.1%, based on the Social Security Administration's announced increase. Boards that have accepted Chapter 17 and wish to grant a COLA must notify PERAC of their decision within 30 days, file certification of the vote, and amend their funding schedules to reflect the COLA's cost impact; boards needing assistance with funding schedule amendments may contact PERAC actuary Jim Lamenzo.

PERAC Memo #18/1998 addresses how retirement boards should handle FY99 appropriations for systems that adopt the COLA legislation before June 30, 1998. PERAC's preference is that the FY99 appropriation immediately reflect the COLA's funding impact via a revised schedule, but boards may instead delay incorporation of the COLA cost until the FY00 appropriation, provided the underlying schedule is based on a valuation dated January 1, 1996 or later. Boards should be aware that choosing to delay will result in higher required appropriations in future years, including FY00, compared to adopting the revised schedule immediately.

This memo clarifies that accepting Section 103 (COLA statute) does not itself grant a FY99 COLA—boards must separately and formally vote to grant the COLA after acceptance is complete, with that vote occurring on or before June 30 and board minutes forwarded to PERAC. It also relays a State Ethics Commission opinion permitting retired board members to participate in both the Section 103 acceptance vote and the annual COLA determination, despite their financial interest, though this exception applies only to these specific COLA-related votes.

This memo announces PERAC's revised Investment Regulations and highlights immediate compliance obligations for boards. Boards must: (1) execute written contracts with investment managers containing specified terms (objectives, brokerage practices, proxy voting procedures, fees, termination clauses, fiduciary status, and no indemnification provisions) and similarly compliant contracts with consultants (itemized services, fixed-dollar fees only, termination terms, no indemnification); and (2) follow a documented competitive selection process for all investment-related service providers, notifying PERAC prior to retention and maintaining complete selection files. Boards are directed to promptly review and amend existing manager and consultant arrangements to bring them into conformity with these new requirements.

This memo reports an Ethics Commission ruling that retired members serving on their own retirement board may vote on annual COLA determinations (including acceptance of Chapter 17 of the Acts of 1997), even though they personally benefit, since COLAs generally affect all members rather than uniquely benefiting the individual board member. Boards should note that such members remain bound by their fiduciary duties in casting these votes; no other action is required.

PERAC Memo #38/1998 summarizes Chapter 252 of the Acts of 1998, which revised M.G.L. c. 32, §5B governing Early Intervention Plans for injured public employees. Under the amended law, retirement boards' sole responsibility is to appoint a non-board-member designee to serve on the employer's Early Intervention Team when one is assembled; boards should cooperate in this appointment but should not devote further resources, funding, or administrative support to the organization or operation of these plans, as that responsibility now rests with the employer.

This memo (a follow-up to Memo #38/1998) clarifies implementation of Chapter 252's Early Intervention Plan provisions, effective November 5, 1998. Boards should stop expending resources on early intervention plans since none have been approved, and should forward any completed plans to employers for potential use; note that retirement board members (though not staff) are barred from serving as team designees, employers bear all associated costs, and confidential medical information gathered by the team is restricted from employment-related use (though members may use it to support disability applications). The memo also notes that the mandatory neutral medical doctor requirement under G.L. c. 32, §20(5)(d) has been eliminated, though boards may still designate one if desired.

PERAC Memo #60/1998 announces that beginning in December 1998, PERAC audit staff will conduct targeted Contract Audits of all retirement systems, examining contracts and the underlying selection process for money managers, consultants, custodians, actuaries, attorneys, and other vendors, as well as following up on prior audit findings. Boards should proactively review and organize their contract files—including executed contracts, competitive bidding documentation, selection scoring sheets, board minutes reflecting vendor selection discussions, and (for investment managers) required contract provisions such as fiduciary status, fee terms, and termination clauses—to ensure they are readily available for the auditors, who will contact each board to schedule a roughly half-day visit.

PERAC Memo #3/1997 transmits an outline detailing the new duties assigned to retirement boards and to PERAC under the pension reform legislation (Ch. 306 of 1996, as amended by Ch. 427 of 1996), covering early intervention programs for injured members, designation of neutral medical examiners under §20(5), and rehabilitation evaluation/re-examination requirements for disability retirees under §8. Boards should review the outline to understand their specific responsibilities and deadlines—including establishing early intervention plans by March 15, 1997, and implementing them by July 1, 1997—and prepare to coordinate with PERAC accordingly. No immediate filing is required beyond familiarization, but boards must begin planning for these expanded compliance obligations.

This memo transmits PERAC's Early Intervention Program guidelines, required under Chapter 306 legislation, and notes the revised implementation timeline (programs operational by July 1, 1997). Boards must develop, in consultation with local officials and union representatives, a general plan addressing employee assistance, safety education, hazard elimination, and accommodation of injured employees, along with a detailed risk management/workplace safety report; this plan with cost projections was due to PERAC by March 15, 1997 for approval before PERAC's required filing with legislative committees on March 19, 1997.

This memo addresses implementation of amended G.L. c. 32, §8, which shifts authority for re-examination determinations of disability retirees to PERAC after consultation with retirement boards, a process still being developed. Until PERAC finalizes its guidelines, boards must continue processing retiree-initiated re-examination requests as before: reviewing medical documentation of a changed condition, determining whether a single physician or three-member panel exam is warranted, and submitting a completed Request for Medical Re-Examination Form (10-18-792)—listing all treating/examining physicians and the retiree's current contact information—to PERAC.

This memo clarifies the process for retirement boards designating neutral medical physicians under G.L. c. 32, §20(5)(d), pending PERAC's issuance of final regulations. Boards have discretion on when to appoint a neutral physician during an application review, but must ensure the physician has relevant specialty training/experience, cannot vote or substitute for the medical panel's certification, and must be excluded from serving on the regional medical panel for that same case—requiring boards to list any involved neutral physician's name on medical panel request forms.

PERAC Memo #29/1997 reminds boards that a member's contribution rate must be based on the date of actual enrollment in the retirement system, not the date employment began, per the McIntire decision and subsequent DALA/CRAB rulings. Boards are required to verify employer-provided contribution rate data against enrollment dates, correct any errors going forward (collecting make-up contributions without interest for underpayments, refunding overpayments), and treat this verification as an ongoing process for all new hires.