Frequently Asked Questions

The Retirement Fund is a private trust, established originally pursuant to a Declaration of Trust, dated January 1, 1948 (the “1948 Trust Agreement”). The Retirement Fund is a contributory defined benefit retirement plan for a single employer, and, as a governmentally sponsored plan, is exempt from the Employee Retirement Income Security Act of 1974 (“ERISA”). The Retirement Fund is governed by two documents: (i) the Amended and Restated Trust Agreement, dated July 19, 2019 (the “Trust Agreement”), by and among the Massachusetts Bay Transportation Authority (the “Authority”), Local 589, Amalgamated Transit Union, AFL-CIO (the “Union”), and the Retirement Board of the Retirement Fund, which superseded the 1948 Trust Agreement and the October 28, 1980 Amended Trust Agreement, and (ii) the Pension Agreement, dated as of July 1, 2014 (the “Pension Agreement”), which is the product of a collective bargaining agreement between the Authority and the Union. Capitalized terms not defined herein have the meanings ascribed to them in the Pension Agreement.

These frequently asked questions (these “FAQs”) are being provided to you for informational purpose only. Nothing in these FAQs is intended to supersede the terms and conditions of the Trust Agreement or the Pension Agreement. Notwithstanding anything to the contrary herein, the Retirement Fund reserves its rights to enforce the Pension Agreement and the Trust Agreement according to its literal terms which shall govern if, and to the extent, those terms differ from anything set out in these FAQs.

Who is eligible to become a member of the Retirement Fund?
Any person regularly employed by the MBTA is eligible to become a member of the Retirement Fund.
How does an employee contribute to the Retirement Fund?
Retirement contributions are deducted from the regular earnings (excluding overtime).
Are the matching contributions made by the Authority applied to the member’s balance in the Fund?
No. The Authority’s contributions are not applied to the member’s balance in the Fund. These contributions become an irrevocable asset of the Fund used for the benefit of its members.
What is the rate of interest earned by the member on his/her contributions? Does the member continue to earn interest after his/her employment with the Authority is terminated by reason of retirement, resignation or discharge?
Interest earned on contributions made on or after July 1, 1967, are compounded annually at a rate of three percent (3%). Note: This rate is set by the Pension Agreement and does not reflect the earnings of the Fund. No. A member stops earning interest on his/her contributions as of the last day of the month prior to his/her separation from the Authority’s service.
What is creditable service?
Creditable service is the total of membership service and prior service. Prior service is service rendered before January 1, 1948. Membership service is the period of service rendered starting January 1, 1948, for which a member made contributions to the Fund, with exceptions as follows:

  1. The period of time an employee is not working due to an injury on the job and is being paid workers’ compensation.
  2. The period of time spent in the military service by an employee who was a member of the Fund before leaving for military service, for which a maximum credit of 4 years is allowed, if such time occurs during a period of national emergency or such military service is compulsory.
How do part-time employees accrue creditable service?
For the purpose of determining the amount of retirement benefit, creditable service shall accrue at the rate of one month of creditable service, or fraction thereof, for each 173 pay hours received.
Is the employment date with the Authority the same as the membership date in the Fund?
No. Membership in the Fund begins when contributions are made to the Fund and is usually a short time after the employment date, typically 90 days after being employed.
When can a member retire?
A member can retire at age 65 or older on a Normal Retirement; for a member hired before December 6th, 2012, an Early Normal Retirement is available with 23 years of creditable service; a member hired on or after December 6th, 2012, an Early Normal Retirement is available if the member is age 55 or older and has at least 25 years of creditable service; an Early Reduced Retirement is available if a member is age 55 or over and has at least 20 years of creditable service; however, the retirement allowance will be reduced by ½ of 1% for each month between the age at retirement and age 65. The Plan provides for a Disability Retirement after 4 years of creditable service for an occupational disability or after 6 years for a non-occupational disability.
How is a member’s retirement allowance determined?
The maximum retirement allowance is determined by using the following formula: The average of the highest 3 years of pensionable earnings, multiplied by 2.46%, and multiplied by years and months of creditable membership service.
What is the date shown on the monthly retirement checks and when are they mailed to the retirees?
The monthly retirement checks are dated for the last day of the month. The checks are mailed 4 or 5 days before the end of the month in order for them to arrive at the retiree’s home by the last day of the month.
Does a member have a decision to make on how the pension will be paid?
Yes. A member can take the maximum retirement allowance payable and will get a check every month for life in that amount, subject to adjustments from time to time. If a member takes the maximum retirement allowance payable, the member will recover the money contributed to the Fund in three years or less, and after the member dies, no further payments will be made from this Fund. A member can elect to take retirement payments under an option. Options give the retiree a lesser amount for life with the provision that upon their death, the person designated as beneficiary will receive retirement allowance. An example would be the 100% option. Instead of taking the maximum retirement allowance payable, the member elects to take a reduced amount for life and upon the member’s death, the designated beneficiary will receive 100% of the allowance the member was receiving for life. The amount of reduction from the maximum is determined by option factors which are based on the member’s and designated beneficiary’s age and life expectancy. There are several types of options available.
If a member leaves the employ of the MBTA, what happens to the Authority’s contributions made to the Fund on the employee’s behalf?
Those contributions, once made, become an irrevocable asset of the Pension Fund and can only be used for the exclusive benefit of the members of the Fund.
If a retirement benefit is sent direct deposit (ACH – wire transfer) to a bank or credit union, when is the benefit deposited into the retiree’s account and when are the funds available?
The benefit is wired to the retiree’s bank or credit union on the last business day of the month. The availability date of these funds is determined by the member’s banking institution.
Once a member has retired and elected either the maximum benefit or elected an option, can this election be changed?
No. An option elected by a member can only be changed prior to the effective date of retirement.
How does unused sickleave affect the retirement allowance?
At retirement, a member’s unused sickleave is converted to creditable membership service, which when multiplied by 2.46% of the average earnings of the three (3) highest years, increases the retirement allowance. For example, sickleave of 150 days converts to 7 months of creditable membership service. However, unused sickleave cannot be used to determine service eligibility for retirement.
In the event a retiree is divorced/widowed, can he/she drop the option elected or change it in favor of a new spouse?
No. In the event a retiree is divorced/widowed from his/her spouse, the option elected cannot be dropped or transferred in favor of a new spouse after the effective date of retirement.
Can a member buy any service for which credit is not being received?
No. A member can only get credit for the time in which both the member and the Authority make contributions.
Who can an active or retired member contact with specific questions concerning health and life insurance benefits?
Active and retired members of the MBTA may contact the Benefits Department with specific questions about health and life insurance benefits. The telephone number is (617) 222-3244. Written inquiries should be sent to the MBTA Benefits Department, 10 Park Plaza, 4th Floor, Boston, MA 02116.
Can a member withdraw any money from the Fund and pay it back at a later date with interest?
No. A member cannot withdraw any contributions from the Fund. The only way a member can obtain money from the Fund is either by resigning or retiring.
Can I receive creditable service in the MBTA Retirement Fund for service with any other Federal, State, or local government agency?
No. Since the MBTA Retirement Fund is a private system, no credit can be given for service other than with the MBTA.
If the surviving spouse is eligible to receive a monthly benefit, how soon does he/she begin receiving the benefit? Does he/she have to wait until the member would have reached age 65?
The surviving spouse is eligible to receive the benefit the first month following the member’s death. He/she does not have to wait until the member would have reached age 65. For example, a member passes away on June 15, the surviving spouse is eligible for benefit starting July 1.
How are changes made in the Pension Plan?
All changes and improvements to the Pension Plan are negotiated between Local #589 and the Authority.
If I leave the employ of the Authority and return at a later date, am I eligible to “Buy Back” my prior service?
Yes. A former member of the Fund who is re-employed by the Authority is eligible, after a 3-year waiting period, to request the Retirement Board to restore his/her previous service by the repayment of withdrawn funds, plus interest. “Bridging the Gap” restores to the member the creditable service he/she built up during the previous period of employment. There is no credit given for the period between the date the member left the employ of the Authority and the date he/she was re-employed. That gap will always remain. Therefore, any member of the Fund who terminated his/her employment with the Authority and was re-employed should contact the Retirement Board to determine the amount necessary to “Buy Back” the previous service.
How does a member qualify for a benefit under the Vesting Provision of the Fund?
Under the Vesting Provision of the Fund, a member who has at least 10 years of creditable membership service may qualify for a benefit provided that his/her employment with the MBTA ended through no fault of their own. If a member resigns or is discharged for cause, he/she is not eligible for a retirement benefit under the provision.
When is a member eligible to receive a benefit under the Vesting Provision of the Fund?
Under the Vesting Provision of the Fund, a member is eligible to receive a retirement benefit the first of the month following the member’s 65th birthday provided that the member has the 10 years of creditable membership service in the Fund and his/her employment did not end voluntarily or by termination.
Under what circumstances is the spouse of a member required to sign a spousal consent form?
When a member is about to retire, a spousal consent is required when the member elects to receive his/her benefit in the following manner:

No optional benefit for spouse
33 1/3% without pop-up
25% without pop-up
50% with pop-up
33 1/3% with pop-up
25% with pop-up
5, 10 or 15 years term certain benefits

Are retirement contributions deducted from Workers’ Compensation payments? Does the time out on Workers’ Compensation count as creditable membership service?
No. There are no retirement contributions deducted from Workers’ Compensation payments. As a result, it may exclude that year as a high year in calculating the high 3 year average.

Yes. When a member is out of work and receiving Workers’ Compensation payments, it does count as creditable membership service.

Workers’ Compensation Offset: Does my receipt of Workers’ Compensation payments affect my disability retirement benefit?
Possibly: If the payments that you receive under Workers’ Compensation are based on the same injury that qualified you for disability retirement, your pension benefit will be offset against your Workers’ Compensation for the same injury.

This means that your pension benefit will be directly reduced by the amount of the Workers’ Compensation benefit that you receive.

Workers’ Compensation payments that are based on an injury different from the injury that qualified you for a disability pension will not affect your disability retirement benefit.

Can taxes be withheld from my pension benefit?
Federal taxes can be withheld from your pension check each month. The amount of federal tax withheld from your monthly benefit can be changed at any time by filing a new W-4P form with the Retirement Fund.

The MBTARF Pension is not taxable in the state of Massachusetts. Retirees residing in Massachusetts should not include their pensionable earnings from the MBTA Retirement Fund as income on their Massachusetts return.

If a member has a question concerning the Fund or would like to obtain an estimate of his/her retirement benefit, whom should he/she contact for the correct answer?

All questions should be directed to the MBTA Retirement Fund at One Washington Mall, Boston, MA 02108 (617) 316-3800 or (800) 810-6228