Audit report and follow-up letter

Public Employee Retirement Administration Commission · from Mass.gov · 30 pages · 580 KB
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STATE
RETIREMENT SYSTE M
ACTUARIAL
VALUATION
REPORT 
PUBLIC EMPLOYEE RETIREMENT ADMINISTRATION COMMISSION 
COMMONWEALTH OF MASSACHUSETTS 
Winthrop 
Retirement System 
Audit Report 
JAN. 1, 201 6 - DEC. 31, 20 19

TABLE OF CONTENTS 
Letter from the Executive Director ........................................................................................................... 1 
Explanation of Findings and Recommendations ....................................................................................... 2 
Board's Annual Statements (as submitted): 
Statement of Ledger Assets and Liabilities .......................................................................................... 3 
Statement of Changes in Fund Balances ............................................................................................. 4 
Statement of Receipts .............................................................................................................................. 5 
Statement of Disbursements ................................................................................................................ 6 
Investment Income ................................................................................................................................... 7 
Supplementary Information: 
Schedule of Allocation of Investments Owned .................................................................................. 8 
Summary of Plan Provisions.................................................................................................................... 9 
Significant Accounting Policies .............................................................................................................16 
Administration of the System...............................................................................................................18 
Board Regulations ...................................................................................................................................18 
Actuarial Valuation and Assumptions .................................................................................................19 
Membership Exhibit ................................................................................................................................20

The Public Employee Retirement Administration Commission has completed an examination of
certain activities of the Winthrop Retirement System pursuant to G.L. c. 32, § 21. The examination
covered the period from January 1, 2016 to December 31, 2019. Based on an assessment in
accordance with the policy outlined in PERAC Memo #18/2019, the scope of this audit was modified
as noted below and was conducted in accordance with the accounting and management standards
established by the Public Employee Retirement Administration Commission in regulation 840 CMR
25.00. 
The specific objectives of our audit were to determine: 1) that the Board is exercising appropriate
fiduciary oversight, 2) that cash balances are accurately stated, 3) that investment balances are
accurately stated, 4) that travel expenses were properly documented and accounted for, 5) that
retirement contributions are accurately deducted, 6) that retirement allowances were correctly
calculated, 7) that required member documentation is maintained, 8) that appropriations certified
by PERAC for the fiscal years covered by the audit have been paid to the retirement system, and 9)
that refunds issued by the system were correctly calculated. 
To achieve these objectives, we inspected certain records of the Winthrop Retirement Board in the
above areas. Specifically, we reviewed the minutes of the Board meetings for compliance with
fiduciary oversight and verified cash balances and investment balances. We tested a sample of travel
expenses for Board approvals, supporting documentation, and proper accounting. We tested the
payroll records of a sample of active members to confirm that the correct percentage of regular
compensation is being deducted, including the additional two percent over $30,000. We also tested
a sample of members who retired during our audit period to verify that their retirement allowance
was calculated in accordance with the statute. We reviewed a sample of member files for accuracy
and completeness. We reviewed appropriations received and compared to PERAC appropriation
letters for the fiscal years during the audit period. We also tested refunds issued during the audit
period and recalculated the interest portion of the refunds tested. 
In our opinion, for those areas tested, the financial records are being maintained and the
management functions are being performed in conformity with the standards established by PERAC
with the exceptions noted in the findings presented in this report. 
In closing, I acknowledge the work of the auditors who conducted this examination, and express
appreciation to the Board and staff for their courtesy and cooperation. 
Sincerely, 
John W. Parsons, Esq. 
Executive Director 
December 19, 2022 
PERAC 
Auditor SUZANNE M. BUMP | KATHLEEN M. FALLON | KATE FITZPATRICK | JAMES J. GUIDO | RICHARD MACKINNON, JR. | JENNIFER F. SULLIVAN, ESQ.
JOHN W. PARSONS, ESQ., Executive Director 
C O M M O N W E A LT H O F M A S S A C H U S E T T S | P U B L I C E M P L OY E E R E T I R E M E N T A D M I N I S T R AT I O N C O M M I S S I O N 
PHILIP Y. BROWN, ESQ., Chair 
1 
2 FIVE MIDDLESEX AVENUE, SUITE 304 | SOMERVILLE, MA 02145
PH 617 666 4446 | FAX 617 628 4002 | TTY 617 591 8917 | WWW.MASS.GOV/PERAC

Winthrop Retirement System Audit Report 2 
EXPLANATION OF FINDINGS AND RECOMMENDATIONS 
1. Active and Retired Members’ Issues: 
• There were two pay codes that did not have retirement deductions taken out but are regular
compensation. One is a stipend for kindergarten registration work. The other was for
Detective on Call (DETOC) work which is not voluntary. 
• Two retirees had incorrect dates of birth used in their allowance calculations. One was a
group 4 member over the age of 55, so there is no difference in the total allowance. The
second retiree, besides having an overstated age factor and an understated option C factor,
was also missing two bi-weekly paychecks from their three years total of regular
compensation; the end result of these errors was an overpayment of approximately $400 per
year. 
• There were five active members (17% of total tested) whose folders were missing birth
certificates. These should be obtained upon enrollment per the Board’s policy. 
• One retiree’s three years of regular compensation included an extra month and a half of pay 
which resulted in an overpayment of about $500 per year. 
• There were two incorrect buyback calculations where the members paid actuarial interest but
should have paid buyback interest. 
Recommendation: The Board needs to review issues identified in testing and make any necessary
corrections. The Board should use payroll records for the determination of regular compensation of
the three highest years and to ensure the correct number of weeks are included. 
Board Response: 
The Board has discussed the audit finding at the November 29, 2022 Board Meeting and will make
the corrections as recommended by the Audit Team. 
Final Determination 
PERAC auditors will follow-up in six (6) months to ensure that appropriate actions have been
taken regarding all findings.

Winthrop Retirement System Audit Report 3 
ANNUAL STATEMENTS (as submitted) 
STATEMENT OF LEDGER ASSETS AND LIABILITIES 
2019 2018 2017 2016
Ca s h $396,561 $933,277 $516,294 $378,964
P R IT Core F und 79,273,318 68,069,445 70,094,956 59,532,793
Accounts R eceiva ble 71,080 73,307 72,545 15,299
Accounts P a ya ble 0 0 0 (169) 
Total $79,740,958 $69,076,029 $70,683,795 $59,926,887 
Annuity S a ving s F und $12,540,472 $12,967,035 $13,203,077 $12,714,589
Annuity R es erve F und 3,636,409 3,045,275 2,459,654 2,250,532
P ens ion F und 5,639,859 5,899,832 5,965,265 5,899,927
E xpens e F und 0 0 0 0
P ens ion R es erve F und 57,924,218 47,163,887 49,055,799 39,061,839 
Total $79,740,958 $69,076,029 $70,683,795 $59,926,887 
Net As s ets Available For Benefits :
Fund Balances : 
AS OF DE CE MB E R 31,

Winthrop Retirement System Audit Report 4 
ANNUAL STATEMENTS (as submitted) (Continued) 
STATEMENT OF CHANGES IN FUND BALANCES 
Annuity
S a ving s
F und
Annuity
R es erve
F und
P ens ion
F und
E xpens e
F und
P ens ion
R es erve
F und
Tota l
All
F unds
$11,849,212 $2,651,752 $5,735,069 $0 $35,195,802 $55,431,835
R eceipts 1,237,548 73,149 3,351,910 428,821 3,866,595 8,958,023
Interfund Tra ns fers (124,499) 125,057 0 0 (558) (0)
Dis burs ements (247,673) (599,427) (3,187,052) (428,821) 0 (4,462,972) 
12,714,589 2,250,532 5,899,927 0 39,061,839 59,926,887
R eceipts 1,481,224 64,648 3,475,654 464,323 9,993,960 15,479,810
Interfund Tra ns fers (787,822) 787,822 0 0 0 0
Dis burs ements (204,915) (643,347) (3,410,316) (464,323) 0 (4,722,901) 
13,203,077 2,459,654 5,965,265 0 49,055,799 70,683,795
R eceipts 1,384,854 71,282 3,612,786 501,790 (1,891,912) 3,678,800
Interfund Tra ns fers (1,251,581) 1,251,581 0 0 0 0
Dis burs ements (369,316) (737,242) (3,678,219) (501,790) 0 (5,286,567) 
12,967,035 3,045,275 5,899,832 0 47,163,887 69,076,029
R eceipts 1,491,859 94,061 3,763,762 527,083 10,761,419 16,638,183
Interfund Tra ns fers (1,274,054) 1,274,054 1,088 0 (1,088) 0
Dis burs ements (644,367) (776,981) (4,024,823) (527,083) 0 (5,973,254) 
$12,540,472 $3,636,409 $5,639,859 $0 $57,924,218 $79,740,958 
B eg inning B a la nce 2016
E nding B a la nce 2016
E nding B a la nce 2017
E nding B a la nce 2018
E nding B a la nce 2019

Winthrop Retirement System Audit Report 5 
ANNUAL STATEMENTS (as submitted) (Continued) 
STATEMENT OF RECEIPTS 
2019 2018 2017 2016
Members Deductions $1,334,778 $1,288,744 $1,226,556 $1,174,824
Tra ns fers from Other S ys tems 125,200 70,087 234,319 45,994
Member Ma ke Up P a yments a nd R e-depos its 18,672 11,811 7,988 2,561
Inves tment Income Credited to Member Accounts 13,209 14,211 12,362 14,169 
S ub Tota l 1,491,859 1,384,854 1,481,224 1,237,548 
Inves tment Income Credited to the Annuity R es erve
F und 94,061 71,282 64,648 73,149 
3 (8) (c) R eimburs ements from Other S ys tems 74,294 86,193 66,334 66,334
R eceived from Commonwea lth for COLA a nd
S urvivor B enefits 29,020 16,547 34,276 40,341
P ens ion F und Appropria tion 3,650,448 3,510,046 3,375,044 3,245,235
S ettlement of Workers ' Compens a tion Cla ims 10,000 0 0 0
R ecovery of 91A Overea rning s 0 0 0 0 
S ub Tota l 3,763,762 3,612,786 3,475,654 3,351,910 
Inves tment Income Credited to the E xpens e F und 527,083 501,790 464,323 428,821 
Interes t Not R efunded 0 114 0 0
Mis cella neous Income (2,646) (2,646) (2,510) (2,594)
E xces s Inves tment Income 10,764,065 (1,889,380) 9,996,470 3,869,190 
S ub Tota l 10,761,419 (1,891,912) 9,993,960 3,866,595 
Total Receipts , Net $16,638,183 $3,678,800 $15,479,810 $8,958,023 
F OR THE P E R IOD E NDING DE CE MB E R 31, 
Pens ion Res erve Fund:
Annuity Savings Fund:
Annuity Res erve Fund:
Pens ion Fund:
Expens e Fund:

Winthrop Retirement System Audit Report 6 
ANNUAL STATEMENTS (as submitted) (Continued) 
STATEMENT OF DISBURSEMENTS 
2019 2018 2017 2016
R efunds to Members $162,437 $72,015 $94,949 $58,092
Tra ns fers to Other S ys tems 481,930 297,301 109,965 189,580 
S ub Tota l 644,367 369,316 204,915 247,673 
Annuities P a id 754,961 737,242 643,347 599,427
Option B R efunds 22,019 0 0 0 
S ub Tota l 776,981 737,242 643,347 599,427 
P ens ions P a id:
R eg ula r P ens ion P a yments 2,683,555 2,496,193 2,317,004 2,173,093
S urvivors hip P a yments 323,370 289,730 255,097 216,869
Ordina ry Dis a bility P a yments 0 0 0 (426)
Accidenta l Dis a bility P a yments 541,120 399,545 416,758 424,160
Accidenta l Dea th P a yments 86,959 105,295 107,854 105,769
S ection 101 B enefits 0 0 93 6,090
3 (8) (c) R eimburs ements to Other S ys tems 333,075 387,456 313,510 261,497
S ta te R eimburs a ble COLA’s P a id 56,744 0 0 0 
S ub Tota l 4,024,823 3,678,219 3,410,316 3,187,052 
B oa rd Member S tipend 1,814 3,043 3,043 2,283
S a la ries 98,514 87,522 60,867 62,842
Leg a l E xpens es 17,145 15,489 33,632 30,187
Medica l E xpens es 0 0 745 4,471
Adminis tra tive E xpens es 4,951 4,561 5,040 3,602
Ma na g ement F ees 381,715 369,252 339,926 305,151
S ervice Contra cts 18,525 17,697 16,935 16,205
F iducia ry Ins ura nce 4,419 4,226 4,136 4,079 
S ub Tota l 527,083 501,790 464,323 428,821 
Total Dis burs ements $5,973,254 $5,286,567 $4,722,901 $4,462,972 
Annuity Savings Fund:
Annuity Res erve Fund:
Pens ion Fund:
Expens e Fund: 
F OR THE P E R IOD E NDING DE CE MB E R 31,

Winthrop Retirement System Audit Report 7 
ANNUAL STATEMENTS (as submitted) (Continued) 
INVESTMENT INCOME 
2019 2018 2017 2016
Ca s h $3,800 $4,162 $715 $452
P ooled or Mutua l F unds 1,974,637 1,913,587 1,787,173 1,628,514 
Total Inves tment Income 1,978,437 1,917,750 1,787,888 1,628,967 
R ea lized Ga ins 3,685,593 3,229,812 2,933,053 1,609,613
Unrea lized Ga ins 8,949,031 2,506,733 5,816,862 4,893,585 
S ub Tota l 12,634,624 5,736,545 8,749,915 6,503,198 
R ea lized Los s 0 0 0 (31,331)
Unrea lized Los s (3,214,644) (8,956,392) 0 (3,715,505) 
S ub Tota l (3,214,644) (8,956,392) 0 (3,746,836) 
Net Inves tment Income 11,398,417 (1,302,096) 10,537,803 4,385,329 
Annuity S a ving s F und 13,209 14,211 12,362 14,169
Annuity R es erve F und 94,061 71,282 64,648 73,149
Milita ry S ervice F und 0 0 0 0
E xpens e F und 527,083 501,790 464,323 428,821 
Total Income Required 634,352 587,284 541,334 516,139 
Net Inves tment Income 11,398,417 (1,302,096) 10,537,803 4,385,329 
Les s : Tota l Income R equired 634,352 587,284 541,334 516,139 
Exces s Income (Los s ) To The Pens ion
Res erve Fund $10,764,065 ($1,889,380) $9,996,470 $3,869,190 
Inves tment Income Received From:
Plus :
Les s :
Income Required: 
F OR THE P E R IOD E NDING DE CE MB E R 31,

Winthrop Retirement System Audit Report 8 
SUPPLEMENTARY INFORMATION 
SCHEDULE OF ALLOCATION OF INVESTMENTS OWNED 
(percentages by category) 
For the year ending December 31, 2019, the rate of return for the investments of the Winthrop
Retirement System was 16.68%. For the five-year period ending December 31, 2019, the rate of
return for the investments of the Winthrop Retirement System averaged 8.10%. For the 35-year
period ending December 31, 2019, since PERAC began evaluating the returns of the retirement
systems, the rate of return on the investments of the Winthrop Retirement System was 8.73%. 
The composite rate of return for all retirement systems for the year ending December 31, 2019 was
16.90%. For the five-year period ending December 31, 2019, the composite rate of return for the
investments of all retirement systems averaged 7.95%. For the 35-year period ending
December 31, 2019, since PERAC began evaluating the returns of the retirement systems, the
composite rate of return on the investments of all retirement systems averaged 9.22%. 
MAR KE T VALUE
P E R CE NTAGE
OF TOTAL
AS S E TS
Ca s h $396,561 0.5%
P R IT Core F und 79,273,318 99.5% 
Grand Total $79,669,879 100.0% 
AS OF DE CE MB E R 31, 2019

Winthrop Retirement System Audit Report 9 
SUPPLEMENTARY INFORMATION (Continued) 
SUMMARY OF PLAN PROVISIONS 
The plan is a contributory defined benefit plan covering all Winthrop Retirement System member unit
employees deemed eligible by the retirement board, with the exception of school department
employees who serve in a teaching capacity. The Teachers’ Retirement Board administers the
pensions of such school employees. 
ADMINISTRATION 
There are 104 contributory retirement systems for public employees in Massachusetts. Each system
is governed by a retirement board and all boards, although operating independently, are governed by
Chapter 32 of the Massachusetts General Laws. This law in general provides uniform benefits, uniform
contribution requirements and a uniform accounting and funds structure for all systems. 
PARTICIPATION 
Participation is mandatory for all full-time employees. Eligibility with respect to part-time, provisional,
temporary, seasonal or intermittent employment is governed by regulations promulgated by the
retirement board, and approved by PERAC. Membership is optional for certain elected officials. 
There are 4 classes of membership in the retirement system, but one of these classes, Group 3, is
made up exclusively of the State Police. The other 3 classes are as follows: 
Group 1 : 
General employees, including clerical, administrative, technical and all other employees not otherwise
classified. 
Group 2: 
Certain specified hazardous duty positions. 
Group 4: 
Police officers, firefighters, and other specified hazardous positions.

Winthrop Retirement System Audit Report 10 
SUPPLEMENTARY INFORMATION (Continued) 
MEMBER CONTRIBUTIONS 
Member contributions vary depending on the most recent date of membership: 
Prior to 1975: 5% of regular compensation 
1975 - 1983: 7% of regular compensation 
1984 to 6/30/96: 8% of regular compensation 
7/1/96 to present: 9% of regular compensation 
1979 to present: an additional 2% of regular compensation in excess of $30,000. 
In addition, members of Group 1 who join the system on or after April 2, 2012 will have their
withholding rate reduced to 6% after achieving 30 years of creditable service. 
RATE OF INTEREST 
Interest on regular deductions made after January 1, 1984 is a rate established by PERAC in
consultation with the Commissioner of Banks. The rate is obtained from the average rates paid on
individual savings accounts by a representative sample of at least 10 financial institutions. 
RETIREMENT AGE 
The mandatory retirement age for some Group 2 and Group 4 employees is age 65. Most Group 2
and Group 4 members may remain in service after reaching age 65. Group 4 members who are
employed in certain public safety positions are required to retire at age 65. There is no mandatory
retirement age for employees in Group 1. 
SUPERANNUATION RETIREMENT 
A person who became a member before April 2, 2012 is eligible for a superannuation retirement
allowance (service retirement) upon meeting the following conditions: 
• completion of 20 years of service, or 
• attainment of age 55 if hired prior to 1978, or if classified in Group 4, or 
• attainment of age 55 with 10 years of service, if hired after 1978, and if classified in
Group 1 or 2. 
A person who became a member on or after April 2, 2012 is eligible for a superannuation retirement
allowance (service retirement) upon meeting the following conditions: 
• attainment of age 60 with 10 years of service if classified in Group 1, or 
• attainment of age 55 with 10 years of service if classified in Group 2, or 
• attainment of age 55 if classified in Group 4.

Winthrop Retirement System Audit Report 11 
SUPPLEMENTARY INFORMATION (Continued) 
AMOUNT OF BENEFIT 
A member’s annual allowance is determined by multiplying average salary by a benefit rate related to
the member’s age and job classification at retirement, and the resulting product by his creditable
service. The amount determined by the benefit formula cannot exceed 80% of the member’s highest
three year (or five year as discussed below) average salary. For veterans as defined in G.L. c. 32, s. 1,
there is an additional benefit of $15 per year for each year of creditable service, up to a maximum of
$300. 
For employees who become members after January 1, 2011, regular compensation is limited to 64%
of the federal limit found in 26 U.S.C. 401(a)(17). In addition, regular compensation will be limited to
prohibit “spiking” of a member’s salary to increase the retirement benefit. 
• For persons who became members prior to April 2, 2012, Average Salary is the average annual rate
of regular compensation received during the 3 consecutive years that produce the highest average,
or, if greater, during the last 3 years (whether or not consecutive) preceding retirement. 
• For persons who became members on or after April 2, 2012, Average Salary is the average annual
rate of regular compensation received during the 5 consecutive years that produce the highest
average, or, if greater, during the last 5 years (whether or not consecutive) preceding retirement. 
• The Benefit Rate varies with the member’s retirement age. For persons who became members prior
to April 2, 2012 the highest rate of 2.5% applies to Group 1 employees who retire at or after age 65,
Group 2 employees who retire at or after age 60, and to Group 4 employees who retire at or after
age 55. A .1% reduction is applied for each year of age under the maximum age for the member’s
group. For Group 2 employees who terminate from service under age 55, the benefit rate for a Group
1 employee shall be used. 
• For persons who became members on or after April 2, 2012 and retire with less than 30 years of
creditable service, the highest rate of 2.5% applies to Group 1 employees who retire at or after age
67, Group 2 employees who retire at or after age 62, and to Group 4 employees who retire at or
after age 57. A .15% reduction is applied for each year of age under the maximum age for the member’s
group. 
• For persons who became members on or after April 2, 2012 and retire with more than 30 years of
creditable service, the highest rate of 2.5% applies to Group 1 employees who retire at or after age
67, Group 2 employees who retire at or after age 62, and to Group 4 employees who retire at or
after age 57. A .125% reduction is applied for each year of age under the maximum age for the
member’s group. 
DEFERRED VESTED BENEFIT 
A participant who has attained the requisite years of creditable service can elect to defer his or her
retirement until a later date. Certain public safety employees cannot defer beyond age 65. All
participants must begin to receive a retirement allowance or withdraw their accumulated deductions
no later than April 15 of the calendar year following the year they reach age 72.

Winthrop Retirement System Audit Report 12 
SUPPLEMENTARY INFORMATION (Continued) 
WITHDRAWAL OF CONTRIBUTIONS 
Member contributions may be withdrawn upon termination of employment. The interest rate for
employees who first become members on or after January 1, 1984 who voluntarily withdraw their
contributions with less than 10 years of service will be 3%. Interest payable on all other withdrawals
will be set at regular interest. 
DISABILITY RETIREMENT 
The Massachusetts Retirement Plan provides 2 types of disability retirement benefits: 
ORDINARY DISABILITY 
Eligibility: Non-veterans who become totally and permanently disabled by reason of a non-job
related condition with at least 10 years of creditable service (or 15 years creditable service in systems
in which the local option contained in G.L. c. 32, s. 6(1) has not been adopted). 
Veterans with ten years of creditable service who become totally and permanently disabled by reason
of a non-job related condition prior to reaching “maximum age”. “Maximum age” applies only to those
employees classified in Group 4 who are subject to mandatory retirement. 
Retirement Allowance: For persons who became members prior to April 2, 2012, the benefit is
equal to the accrued superannuation retirement benefit as if the member was age 55. If the member
is a veteran, the benefit is 50% of the member’s final rate of salary during the preceding 12 months,
plus an annuity based upon accumulated member contributions plus credited interest. If the member
is over age 55, he or she will receive not less than the superannuation allowance to which he or she
is entitled. 
For persons in Group 1 who became members on or after April 2, 2012, the benefit is equal to the
accrued superannuation retirement benefit as if the member was age 60. If the member is a veteran,
the benefit is 50% of the member’s final rate of salary during the preceding 12 months, plus an annuity
based upon accumulated member contributions plus credited interest. If the member is over age 60,
he or she will receive not less than the superannuation allowance to which he or she would have been
entitled had they retired for superannuation. 
For persons in Group 2 and Group 4 who became members on or after April 2, 2012, the benefit is
equal to the accrued superannuation retirement benefit as if the member was age 55. If the member
is a veteran, the benefit is 50% of the member’s final rate of salary during the preceding 12 months,
plus an annuity based upon accumulated member contributions plus credited interest. If the member
is over age 55, he or she will receive not less than the superannuation allowance to which he or she
would have been entitled had they retired for superannuation.

Winthrop Retirement System Audit Report 13 
SUPPLEMENTARY INFORMATION (Continued) 
ACCIDENTAL DISABILITY 
Eligibility: Applies to members who become permanently and totally unable to perform the essential
duties of the position as a result of a personal injury sustained or hazard undergone while in the
performance of duties. There are no minimum age or service requirements. 
Retirement Allowance: 72% of salary plus an annuity based on accumulated member contributions,
with interest. This amount is not to exceed 100% of pay. For those who became members in service
after January 1, 1988 or who have not been members in service continually since that date, the amount
is limited to 75% of pay. There is an additional pension of $952.32 per year (or $312 per year in
systems in which the local option contained in G.L. c. 32, s. 7(2)(a)(iii) has not been adopted), per
child who is under 18 at the time of the member’s retirement, with no age limitation if the child is
mentally or physically incapacitated from earning. The additional pension may continue up to age 22
for any child who is a full time student at an accredited educational institution. For systems that have
adopted Chapter 157 of the Acts of 2005, veterans as defined in G.L. c. 32, s. 1 receive an additional
benefit of $15 per year for each year of creditable service, up to a maximum of $300. 
ACCIDENTAL DEATH 
Eligibility: Applies to members who die as a result of a work-related injury or if the member was
retired for accidental disability and the death was the natural and proximate result of the injury or
hazard undergone on account of which such member was retired. 
Allowance: An immediate payment to a named beneficiary equal to the accumulated deductions at
the time of death, plus a pension equal to 72% of current salary and payable to the surviving spouse,
dependent children or the dependent parent, plus a supplement of $952.32 per year, per child (or
$312 per year in systems in which the local option contained in G.L. c. 32, s. 9(2)(d)(ii) has not been
adopted), payable to the spouse or legal guardian until all dependent children reach age 18 or 22 if a
full time student, unless mentally or physically incapacitated. 
The surviving spouse of a member of a police or fire department or any corrections officer who, under
specific and limited circumstances detailed in the statute, suffers an accident and is killed or sustains
injuries while in the performance of his duties that results in his death, may receive a pension equal to
the maximum salary for the position held by the member upon his death. In addition, an eligible family
member may receive a one-time payment of $300,000 from the State Retirement Board. This lump
sum payment is also available to the family of a public prosecutor in certain, limited circumstances.

Winthrop Retirement System Audit Report 14 
SUPPLEMENTARY INFORMATION (Continued) 
DEATH AFTER ACCIDENTAL DISABILITY RETIREMENT 
Effective November 7, 1996, Accidental Disability retirees were allowed to select Option C at
retirement and provide a benefit for an eligible survivor. For Accidental Disability retirees prior to
November 7, 1996, who could not select Option C, if the member’s death is from a cause unrelated
to the condition for which the member received accidental disability benefits, a surviving spouse will
receive an annual allowance of $6,000. For Systems that accept the provisions of Section 28 of Chapter
131 of the Acts of 2010, the amount of this benefit is $9,000. For Systems that accept the provisions
of Section 63 of Chapter 139 of the Acts of 2012, the amount of this benefit is $12,000. 
DEATH IN ACTIVE SERVICE (OPTION D) 
Allowance: An immediate allowance equal to that which would have been payable had the member
retired and selected Option C on the day before his or her death. For a member who became a
member prior to April 2, 2012 whose death occurred prior to the member’s superannuation
retirement age, the age 55 benefit rate is used. For a member classified in Group 1 who became a
member on or after April 2, 2012 whose death occurred prior to the member’s superannuation
retirement age, the age 60 benefit rate is used. If the member died after age 60, the actual age is used.
For a member classified in Group 2 or Group 4, whose death occurred prior to the member’s
minimum superannuation retirement age, the benefit shall be calculated using an age 55 age factor.
The minimum annual allowance payable to the surviving spouse of a member in service who dies with
at least two years of creditable service is $3,000 unless the retirement system has accepted the local
option increasing this minimum annual allowance to $6,000, provided that the member and the spouse
were married for at least one year and living together on the member’s date of death. 
The surviving spouse of such a member in service receives an additional allowance equal to the sum
of $1,440 per year for the first child and $1,080 per year for each additional child until all dependent
children reach age 18 or 22 if a full time student, unless mentally or physically incapacitated. 
COST OF LIVING 
If a system has accepted Chapter 17 of the Acts of 1997, and the Retirement Board votes to pay a
cost of living increase (COLA) for that year, the percentage is determined based on the increase in
the Consumer Price Index used for indexing Social Security benefits, but cannot exceed 3.0%. Section
51 of Chapter 127 of the Acts of 1999, if accepted, allows boards to grant COLA increases greater
than that determined by CPI but not to exceed 3.0%. Only a certain portion of a retiree’s total
allowance is subject to a COLA. The total COLA for periods from 1981 through 1996 is paid for by
the Commonwealth of Massachusetts. 
Under the provisions of Chapter 32, Section 103(j) inserted by Section 19 of Chapter 188 of the Acts
of 2010, systems may increase the maximum base on which the COLA is calculated in multiples of
$1,000. For many years the COLA base was calculated based upon the first $12,000 of a retiree’s
allowance. Now the maximum base upon which the COLA is calculated varies from system to system.
Each increase in the base must be accepted by a majority vote of the Retirement Board and approved
by the legislative body.

Winthrop Retirement System Audit Report 15 
SUPPLEMENTARY INFORMATION (Continued) 
METHODS OF PAYMENT 
A member may elect to receive his or her retirement allowance in one of 3 forms of payment. 
Option A: Total annual allowance, payable in monthly installments, commencing at retirement and
terminating at the member’s death. 
Option B: A reduced annual allowance, payable in monthly installments, commencing at retirement
and terminating at the death of the member, provided, however, that if the total amount of the annuity
portion received by the member is less than the amount of his or her accumulated deductions,
including interest, the difference or balance of his accumulated deductions will be paid in a lump sum
to the retiree’s beneficiary or beneficiaries of choice. 
Option C: A reduced annual allowance, payable in monthly installments, commencing at retirement.
At the death of the retired employee, 2/3 of the allowance is payable to the member’s designated
beneficiary (who may be the spouse, or former spouse who has not remarried, child, parent, sister,
or brother of the employee) for the life of the beneficiary. For members who retired on or after
January 12, 1988, if the beneficiary pre-deceases the retiree, the benefit payable increases (or “pops
up” to Option A) based on the factor used to determine the Option C benefit at retirement. For
members who retired prior to January 12, 1988, if the System has accepted Section 288 of Chapter
194 of the Acts of 1998 and the beneficiary pre-deceases the retiree, the benefit payable “pops up”
to Option A in the same fashion. The Option C became available to accidental disability retirees on
November 7, 1996. 
ALLOCATION OF PENSION COSTS 
If a member’s total creditable service was partly earned by employment in more than one retirement
system, the cost of the "pension portion" is allocated between the different systems pro rata based
on the member’s service within each retirement system. In certain circumstances, if a member
received regular compensation concurrently from two or more systems on or after January 1, 2010,
and was not vested in both systems as of January 1, 2010, such a pro-ration may not be undertaken.
This is because such a person may receive a separate retirement allowance from each system.

Winthrop Retirement System Audit Report 16 
SUPPLEMENTARY INFORMATION (Continued) 
SIGNIFICANT ACCOUNTING POLICIES 
The accounting records of the System are maintained on a calendar year basis in accordance with the
standards and procedures established by the Public Employee Retirement Administration
Commission. 
Cash accounts are considered to be funds on deposit with banks and are available upon demand. 
Short Term Investments are highly liquid investments that will mature within twelve months from the 
date of acquisition. 
Investments are reported at their fair value. Securities traded on recognized exchanges are valued at 
the most recent sales price at year end. If no sale was reported, the mean of the bid and asked price
is used when available, or the most recent bid price. Mutual, commingled and pooled funds are valued
based on the net asset or unit value at year end. Real estate and alternative investments are valued
based on estimates provided by the managers of those respective investments. Purchases and sales of
securities are reflected on the date the trade is initiated. Realized gain or loss is largely based on the 
difference between the cost or the value at the prior year end and the funds realized upon liquidation.
Dividend income is generally recorded when received. Interest income is recorded as earned on an 
accrual basis. Income from alternative investments is recorded as reported by the managing partner.
Appreciation or depreciation in the value of investments consists of the unrealized gains and losses 
reported as the difference between the previous period and the current value. 
The system makes estimates and assumptions that affect the reported values of assets and liabilities
and the reported amounts added and deducted during the reporting periods. The fair value of real
estate and alternative investment holdings are generally estimated in the absence of reliable exchange
values. The actual funds realized upon liquidation may differ from these estimates. 
The provisions of Massachusetts General Laws Chapter 32, § 23(2) generally govern the investment
practices of the system. The Board primarily relies upon the investment strategy of the PRIM Board
to maintain their progress toward full funding of the system. That strategy seeks to balance the
exposure to common deposit and investment risks related to custody, credit concentrations, interest
rate and foreign currency fluctuations. 
Operating expenses include the ordinary and necessary cost of investment and professional services
and the other miscellaneous administrative expenses of the system.

Winthrop Retirement System Audit Report 17 
SUPPLEMENTARY INFORMATION (Continued) 
The Annuity Savings Fund is the fund in which members' contributions are deposited. Voluntary 
contributions, re-deposits, and transfers to and from other systems, are also accounted for in this
fund. Members’ contributions to the fund earn interest at a rate determined by PERAC. Interest for
some members who withdraw with less than ten years of service is transferred to the Pension Reserve
Fund. Upon retirement, members’ contributions and interest are transferred to the Annuity Reserve
Fund. Dormant account balances must be transferred to the Pension Reserve Fund after a period of
ten years of inactivity. 
The Annuity Reserve Fund is the fund to which a member’s account is transferred upon retirement 
from the Annuity Savings Fund and Special Military Service Credit Fund. The annuity portion of the
retirement allowance is paid from this fund. Interest is credited monthly to this fund at the rate of 3%
annually on the previous month's balance. 
The Special Military Service Credit Fund contains contributions and interest for members while on a 
military leave for service in the Armed Forces who will receive creditable service for the period of
that leave. 
The Expense Fund contains amounts transferred from investment income for the purposes of 
administering the retirement system. 
The Pension Fund contains the amounts appropriated by the governmental units as established by 
PERAC to pay the pension portion of each retirement allowance. 
The Pension Reserve Fund contains amounts appropriated by the governmental units for the purposes 
of funding future retirement benefits. Any profit or loss realized on the sale or maturity of any
investment or on the unrealized gain of a market valued investment as of the valuation date is credited
to the Pension Reserve Fund. Additionally, any investment income in excess of the amount required
to credit interest to the Annuity Savings Fund, Annuity Reserve Fund, and Special Military Service
Credit Fund is credited to this Reserve account. 
The Investment Income Account is credited with all income derived from interest and dividends of 
invested funds. At year-end the interest credited to the Annuity Savings Fund, Annuity Reserve Fund,
Expense Fund, and Special Military Service Credit Fund is distributed from this account and the
remaining balance is transferred to the Pension Reserve Fund.

Winthrop Retirement System Audit Report 18 
SUPPLEMENTARY INFORMATION (Continued) 
ADMINISTRATION OF THE SYSTEM 
The System is administered by a five-person Board of Retirement consisting of the Chief Financial
Officer who shall be a member ex-officio, a second member appointed by the governing authority, a
third and fourth member who shall be elected by the members in or retired from the service of such
system, and a fifth member appointed by the other four board members. 
Ex-officio Member: Vacant 
Appointed Member: Terence M. Delehanty Term Expires: 06/30/2025 
Elected Member: James Feeley Term Expires: 09/21/2024 
Elected Member: Dennis Boudrow Term Expires: 09/21/2024 
Appointed Member: Karin A. Chavis, Chairperson Term Expires: 08/31/2023 
The Board members are required to meet at least once a month. The Board must keep a record of
all of its proceedings. The Board must annually submit to the appropriate authority an estimate of the
expenses of administration and cost of operation of the system. The board must annually file a financial
statement of condition for the system with the Executive Director of PERAC. 
The investment of the system’s funds is the responsibility of the Board. All retirement allowances
must be approved by the Retirement Board. The PERAC Actuary performs verification prior to
payment, unless the system has obtained a waiver for superannuation calculations allowing them to
bypass this requirement. All expenses incurred by the System must be approved by a majority vote
of the Board. Payments shall be made only upon vouchers signed by two persons designated by the
Board. 
Retirement board members and employees are bonded by an authorized agent representing a
company licensed to do business in Massachusetts. Fidelity insurance is the only required policy
coverage under Ch. 32 §21 and §23 as well as 840 CMR 17.01. The policy is designed to cover specific
intentional acts such as theft, fraud or embezzlement and also specify who commits such acts, most
commonly employees of the system. This coverage reimburses the system for the losses it suffers as
a result of its employees’ actions. It does not insure the employees for their illegal acts. Statutorily
required coverage is provided by the current fidelity insurance policy to a limit of $1,000,000 with a
$10,000 deductible issued through Travelers Casualty and Surety Company. The system also has
Fiduciary coverage to a limit of $50,000,000 under a blanket policy issued through the Massachusetts
Association of Contributory Retirement Systems. 
BOARD REGULATIONS 
The Winthrop Retirement Board has adopted Supplemental Regulations which are available on the
PERAC website at https://www.mass.gov/Winthrop-retirement-board-regulations .

Winthrop Retirement System Audit Report 19 
SUPPLEMENTARY INFORMATION (Continued) 
ACTUARIAL VALUATION AND ASSUMPTIONS 
The most recent actuarial valuation of the System was prepared by the Public Employee Retirement
Administration Commission as of January 1, 2021. 
The normal cost for employees on that date was 8.9% of payroll 
The normal cost for the employer including administrative expenses was 14.0% of payroll 
The principal actuarial assumptions used in the valuation are as follows: 
Investment Return: 6.75% per annum 
Rate of Salary Increase: Varies by group and service 
SCHEDULE OF FUNDING PROGRESS AS OF JANUARY 1, 2021 
The a ctua ria l lia bility for a ctive members wa s $39,651,098
The a ctua ria l lia bility for ves ted termina ted members wa s 989,850
The a ctua ria l lia bility for non-ves ted termina ted members wa s 384,175
The a ctua ria l lia bility for retired members wa s 48,501,006 
The tota l a ctua ria l lia bility wa s $89,526,129
S ys tem a s s ets a s of tha t da te were (a ctua ria l va lue) 82,997,901 
The unfunded a ctua ria l lia bility wa s $6,528,228 
The ra tio of s ys tem’s a s s ets to tota l a ctua ria l lia bility wa s 92.7%
As of tha t da te the tota l covered employee pa yroll wa s $13,001,168 
Actua ria l
Va lua tion
Da te
Actua ria l
Va lue of
As s ets
( a )
Actua ria l
Accrued
Lia bility
( b )
Unfunded
AAL
(UAAL)
( b-a )
F unded
R a tio
( a /b )
Covered
P a yroll
( c )
UAAL a s a
% of
Cov. P a yroll
( (b-a )/c )
1/1/2021 $82,997,901 $89,526,129 $6,528,228 92.7% $13,001,168 50.2%
1/1/2019 $71,085,354 $85,410,585 $14,325,231 83.2% $13,204,268 108.5%
1/1/2017 $61,095,218 $75,606,098 $14,510,880 80.8% $12,853,218 112.9%
1/1/2015 $52,707,691 $69,473,818 $16,766,127 75.9% $11,694,602 143.4%
1/1/2013 $43,816,970 $62,687,986 $18,871,016 69.9% $10,188,836 185.2%

Winthrop Retirement System Audit Report 20 
SUPPLEMENTARY INFORMATION (Continued) 
MEMBERSHIP EXHIBIT 
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 
Retirement in Past Years 
Superannuation 5 4 18 11 10 6 3 10 10 7
Accidental Disability 0 0 0 0 0 0 0 0 2 0 
Total Retirements 5 4 18 11 10 6 3 10 12 7
Total Retirees, Beneficiaries and
Survivors 173 174 186 182 184 184 181 187 183 191
Total Active Members 234 244 238 247 263 272 276 280 269 267 
Pension Payments 
Superannuation $1,805,119 $1,816,527 $2,111,796 $2,226,256 $2,212,654 $2,223,407 $2,173,093 $2,317,004 $2,496,193 $2,683,555
Survivor/Beneficiary Payments 113,774 138,016 169,922 174,958 187,714 199,880 216,869 255,097 289,730 323,370
Ordinary Disability 15,628 15,988 16,348 16,708 17,068 17,428 (426) 0 0 0
Accidental Disability 438,363 424,220 429,405 427,034 406,920 423,344 424,160 416,758 399,545 541,120
Other 440,315 521,916 313,703 324,064 369,816 399,008 373,356 421,457 492,751 476,777 
Total Payments for Year $2,813,199 $2,916,667 $3,041,175 $3,169,019 $3,194,172 $3,263,068 $3,187,052 $3,410,316 $3,678,219 $4,024,823

COMMONWEALTH OF MASSACHUSETTS
Public Employee Retirement Administration Commission 
Five Middlesex Avenue, Suite 304 | Somerville, MA 02145
Phone: 617-666-4446 | Fax: 617-628-4002
TTY: 617-591-8917 | Web: www.mass.gov/perac 
PUBLIC EMPLOYEE RETIREMENT ADMINISTRATION COMMISSION 
COMMONWEALTH OF MASSACHUSETTS

COMMONWEALTH-OF MASSACHUSETTS | PUBLIC EMPLOYEE RETIREMENT ADMINISTRATION COMMISSION

PHILIP Y. BROWN, ESQ., Chair JOHN W, PARSONS, ESQ., Executive Director

Auditor DIANA DIZOGLIO | KATHLEEN M. FALLON | KATE FITZPATRICK | JAMES j. GUIDO | RICHARD MACKINNON, jR. | JENNIFER F. SULLIVAN, ESQ.

November 27, 2023

Karin Chavis, Chairperson
Winthrop Retirement Board
Town Hall

1 Metcalf Square
Winthrop, MA 02152

REFERENCE: Report of the Examination of the Winthrop Retirement Board for the four-year
period from January 1, 2016, through December 31, 2019.

Dear Chairperson Chavis:

The Public Employee Retirement Administration Commission has completed a follow-up review
of the finding and recommendation contained in its audit report of the Winthrop Retirement
Board for the period referenced above. We conduct these visits as a regular part of the oversight
process to ensure the timely implementation of the recommendation contained in that report.
The examination also addressed the other matters discussed at the completion of the audit. The
results are as follows:

The Audit Report cited a finding that listed issues with active and retired members: two stipends
were excluded from regular compensation; two retirement allowance calculations either
included too many or not enough pay periods; five member folders were missing birth
certificates; and two buyback calculations used incorrect interest rates.

Follow-up Result: One stipend has been corrected and the school pay code listing has been
updated to separate stipends that are pensionable from stipends that are not pensionable.
Retirement allowances were corrected, and the recalculations were approved by PERAC. All birth
certificates were obtained and found in members’ folders. The two buyback calculations were
amended using the proper interest rates and interest overpayments were refunded to members
in December 2022. This finding is resolved.

FIVE MIDDLESEX AVENUE, SUITE 304 | SOMERVILLE, MA 02145
PH 617 666 4446 | FAX 617 628 4002 | WWW.MASS.GOV/PERAC

November 27, 2023
Page Two

The additional matters discussed have been reviewed and most have been resolved.

The Commission wishes to acknowledge the effort demonstrated by the staff of the Winthrop
Retirement Board to correct the issues from the most recent examination of the system.

wor?

. Parsons, Esq.
tive Director

JwP/tal
cc: Winthrop Retirement Board Members