New Pension Agreement – FAQs

The Massachusetts Bay Transportation Authority (“Authority”) and the Local 589, Amalgamated Transit Union, AFL-CIO (“Union”) entered into a new Pension Agreement effective March 31, 2023 that made important changes. Those changes included the creation of a two-tier pension benefit structure consisting of the Group A Plan and the Group B Plan. Additionally, the Authority and Union entered into a side letter on January 29, 2024 that made two changes for employees who became Members of the Fund on or before June 30, 2023.

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.

If I am satisfied with my current enrollment in either the Group A or Group B Plan, do I need to take any action?
No. Those currently enrolled in Group A who wish to remain in Group A do not need to take any action. Members who have already elected to switch from Group A to Group B and wish for their election to stand do not need to take any further action. Those who become members of the Fund on or after July 1st, 2023 are automatically enrolled in Group B and cannot switch to Group A.
Who is in the Group A Plan?
Employees who became members of the Fund on or before June 30, 2023 are enrolled in Group A unless they elect to join Group B no later than March 29th, 2024.
Who is in the Group B Plan?
Those who are or become members of the Fund on or after July 1, 2023 are automatically enrolled in the Group B Plan and may not elect to join Group A. Employees enrolled in the Group A Plan that elect to join the Group B Plan by March 29, 2024 are enrolled in Group B once they have accrued 24 months of creditable service from the date of their election to join Group B.
If I was previously enrolled in the Group A Plan and elect to join the Group B Plan, when am I fully enrolled in Group B?
A Group A Plan member electing to join Group B no later than March 29, 2024 must accrue 24 months of credible service before their Group B enrollment is complete. A member begins accruing the requisite 24 months of credible service on the date upon which the Retirement Fund receives their application to join Group B.
How does a member switch from the Group A Plan to the Group B Plan?
A member is required to provide written notification to the Fund no later than March 29, 2024 by completing the application available on the Fund’s website. The application can be submitted using DocuSign, mailed to the Fund’s office, or delivered in person. Applications received via email or fax will not be accepted. If you do not receive written notification that your application has been received within 30 days of submitting it, please contact the Retirement Fund.
How does a member of the Group B Plan qualify for a non-disability retirement benefit.
A member in Group B qualifies for a Normal Retirement allowance once they have accrued at least 10 years of creditable service and have obtained at least 55 years of age. A Group B member who accuses at least 10 years of credible service prior to obtaining 55 years of age may leave the employ of the MBTA and elect to begin receiving a vested retirement allowance anytime between the ages of 55-65. Vested retirement allowances are reduced based upon the number of months a member begins collecting their benefit prior to obtaining age 65. Normal Retirement allowances are not penalized.
How is the retirement allowance for the Group B Plan calculated?
The formula is the average of the member’s highest 3 years of pensionable earnings, multiplied by the benefit multiplier based upon the member’s age at retirement (found on the Benefit Comparison Chart), multiplied by the member’s years and months of creditable service.
What is the maximum retirement allowance for the Group A Plan and the Group B Plan?
A member’s retirement allowance cannot exceed 80% of the average of the member’s highest 3 years of pensionable earnings.
What is a vested retirement allowance?
Group A Plan: A member qualifies for a vested retirement allowance if they have accrued at least 10 years of creditable service, are separated from the employ of the MBTA for no fault of their own, and do not receive a return of contributions. A member may begin collecting a vested retirement allowance at age 65. The allowance is calculated as a percentage of a normal retirement allowance based upon credible service and pensionable earnings up the time of the member’s termination where a member receives 5% of such benefit for each year of service up to a total of 20 years of credible service.

Group B Plan: A member qualifies for a vested deferred retirement allowance if the member accrues at least 10 years of credible service, the member’s employment with the MBTA is terminated for any reason prior to becoming eligible for a Normal Retirement allowance per Article IV(2), and the member has not withdrawn their contributions from the Fund. A member may begin collecting their vested allowance between the ages of 55-65 provided that such allowance will be reduced by one half of one percent (0.5%) for each month prior to their 65th birthday. All vested retirement allowances are calculated using the 2.46% multiplier.

If I join Group B, will my pension be penalized if I choose to retire before I turn 65?
Group B members who qualify for a deferred vested retirement allowance will be penalized if they choose to collect their allowance before they obtain 65 years of age. The penalty is 6% for every year or 0.5% for every month they begin collecting their benefit prior to obtaining age 65.
If I am enrolled in the Group B Plan and leave the employ of the MBTA after reaching at least age 55 and accruing at least 10 years of credible service, can I elect to defer my benefit until age 65?
No. Benefit deferment is only available to members who have accrued at least 10 years of creditable service and whose employment with the T ends before becoming eligible for an immediate retirement allowance (i.e. before obtaining age 55). For qualified members who transferred from Group A to Group B, two years of service after making such an election is also required.
If I am enrolled in the Group B Plan and qualify for a deferred vested retirement allowance, how do I elect the month and year I wish to begin collecting my vested benefit?
There is no formal election process beforehand as the member’s circumstances may change over time. Group B members seeking to commence their retirement should keep in mind that retirements are effective the first of the month for any given month and should visit the Retirement Fund the month prior to their desired date of retirement.
What changes does the new pension agreement make to disability, special survivor, and special disability retirement benefits?
Eligibility for disability, special survivor, and special disability benefits remains unchanged and are identical under both the Gorup A and Group B plans. However, benefit calculations will differ. The benefit multiplier used to calculate disability, special survivor, and special disability benefits under the Group B Plan will be determined by the member’s age.
If I decide to begin collecting my Group B vested benefit before age 61, will I be subject to both a reduced multiplier (less than 2.46%) and reduction based on the number of months I begin collecting before age 65?
No, for Group B vesting benefits, the multiplier will be 2.46%, regardless of age. Those who collect before age 65 will be assessed a penalty of 6% per year AFTER calculating the unreduced benefit using the 2.46% multiplier.