Valuation report

Public Employee Retirement Administration Commission · from Mass.gov · 40 pages · 1.7 MB
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WINTHROP
RETIREMENT SYSTEM
ACTUARIAL VALUATION REPORT
JANUARY 1, 2025

Commission Members
Philip Y. Brown, Esq.
Principal/Founder, Brown Counsel
Chairman
The Honorable Diana DiZoglio
Auditor of the Commonwealth
Vice Chairman
Kathleen M. Fallon
Practice Area Director,
Public Consulting Group
Kate Fitzpatrick
Town Manager (Retired), Town of Needham
James J. Guido
Lieutenant, Chelsea Police Department
Richard MacKinnon, Jr.
President, Professional
Firefighters of Massachusetts
Jennifer F. Sullivan, Esq.
Governor’s Appointee
Investment Professional
Bill Keefe
Executive Director
Public Employee Retirement
Administration Commission
10 Cabot Road
Suite 300
Medford, MA 02155
Phone 617 666 4446
Fax 617 628 4002
Web www.mass.gov/perac

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TABLE OF CONTENTS
Section Page
1. Introduction & Certification ...............................................................................................................................1
2. Executive Summary
A. Comparison with Prior Valuation ..........................................................................................................2
B. Funded Status and Plan Experience Since Prior Valuation ....................................................................3
3. Summary of Valuation Results ..........................................................................................................................7
4. Appropriation Development for Fiscal Year 2026
A. Derivation of Appropriation ...................................................................................................................8
B. Current Funding Schedule ......................................................................................................................9
5. Plan Assets
A. Breakdown of Assets by Investment Type ...........................................................................................10
B. Breakdown of Assets by Fund .............................................................................................................10
C. Market Value of Assets ........................................................................................................................10
D. Actuarial Value of Assets .....................................................................................................................10
E. Development of Actuarial Value of Assets ..........................................................................................11
6. Development of the Actuarial Gain or Loss
A. Gain/(Loss) on Actuarial Liability .......................................................................................................12
B. Gain/(Loss) on Plan Assets...................................................................................................................12
C. Total Gain/(Loss) ..................................................................................................................................12
7. GASB Information ...........................................................................................................................................13
8. Information on System Membership
A. Active Members ...................................................................................................................................14
B. Retirees and Survivors ..........................................................................................................................16
9. Valuation Cost Methods
A. Actuarial Cost Method .........................................................................................................................18
B. Asset Valuation Method .......................................................................................................................18
C. Low-Default-Risk Obligation Measure (LDROM) ..............................................................................18
10. Actuarial Disclosures
A. Risk.......................................................................................................................................................19
B. Low-Default-Risk Obligation Measure (LDROM) ..............................................................................23
C. Reasonable Actuarially Determined Contribution (ADC) ...................................................................23
D. Actuarial Models ..................................................................................................................................23
11. Actuarial Assumptions ...................................................................................................................................24
12. Summary of Plan Provisions ..........................................................................................................................27
13. Glossary of Terms ..........................................................................................................................................33

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1. INTRODUCTION & CERTIFICATION
This report presents the results of the actuarial valuation of the Winthrop Contributory Retirement System. The
valuation was performed as of January 1, 2025 pursuant to Chapter 32 of the General Laws of the Commonwealth of
Massachusetts. The actuarial assumptions used in this valuation are the same as those used in the January 1, 2023
valuation. The COLA base increased from $13,000 to $14,000 since the 2023 valuation.
This valuation was based on member data as of December 31, 2024, which was supplied by the Retirement Board.
Such tests as we deemed necessary were performed on the data to ensure accuracy. Asset information as of December
31, 2024 was provided in the Annual Statement for the Financial Condition as submitted to this office in accordance
with G.L. c. 32, ss. 20(5)(h), 23(1) and 23(2)(e). Both the membership data and financial information were reviewed
for reasonableness but were not audited by us.
This report was prepared by PERAC for the exclusive use of the Winthrop Retirement Board, its staff and its auditors.
The report was performed to determine the funded status of the System and to determine the contribution requirements
to ensure that System assets along with the contributions are sufficient to provide the prescribed benefits. Use of this
report by other parties may not be appropriate and may result in mistaken conclusions because of the failure to
understand applicable assumptions, methods, or the inapplicability of the report for purposes other than those intended.
PERAC should be asked to review any statement to be made based on the results presented in this report. PERAC
will accept no responsibility for any such statement made without its prior review.
Future actuarial measurements may differ significantly from the current measurements presented in this report due to
such factors as plan experience differing from that anticipated by the economic or demographic assumptions, changes
in economic and demographic assumptions, and increases or decreases expected as part of natural operation of the
methodology used for these measurements such as additional contribution requirements based on the plan’s funded
status and changes in plan provisions or applicable law. As part of this valuation, we have not performed an analysis
of the potential range of future measurements.
We, the undersigned actuaries, are members of the American Academy of Actuaries and meet the Qualification
Standards of the American Academy of Actuaries to render the actuarial opinion contained in this report. In our
opinion, the actuarial assumptions used in this report are reasonable, are related to plan experience and expectations,
and represent our best estimate of anticipated experience under the system. We believe this report represents an
accurate appraisal of the actuarial status of the system performed in accordance with generally accepted actuarial
principles and practices relating to pension plans.
Respectfully submitted,
Public Employee Retirement Administration Commission
___________________________________ ___________________________________
John F. Boorack, Actuary James R. Lamenzo, Actuarial Consultant
Member of the American Academy of Actuaries Member of the American Academy of Actuaries
Fellow of the Conference of Consulting Actuaries Associate of the Society of Actuaries
Enrolled Actuary Number 23-8562 Enrolled Actuary Number 23-4709
___________________________________
William T. Keefe
Executive Director
January 22, 2026

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2. EXECUTIVE SUMMARY
A | COMPARISON WITH PRIOR VALUATION
The last full valuation was performed by PERAC as of January 1, 2023. The investment return assumption of 6.75%
was maintained in this valuation. We maintained the base mortality assumption determined from our local system
retiree mortality analysis completed in 2019. We also maintained the mortality improvement scale used in 2023 (see
Part B). Other assumptions are based on our Local Experience Study Analysis issued in 2002 with a subsequent
adjustment to the salary increase assumption. The COLA base increased from $13,000 to $14,000. Below we have
shown a comparison of the results between the two valuations.
1/1/25 1/1/23
Increase/
(Decrease)
% Increase/
(Decrease)
Total Normal Cost $3,135,258 $2,726,638 $408,620 15.0%
Expected Employee Contributions 1,485,371 1,271,528 $213,843 16.8%
Net Normal Cost $1,649,887 $1,455,110 $194,777 13.4%
Total Actuarial Liability $103,038,753 $96,580,757 $6,457,996 6.7%
Assets 112,058,045 98,643,398 $13,414,647 13.6%
Unfunded Actuarial Liability ($9,019,292) ($2,062,641) ($6,956,651) 337.3%
Funded Ratio 108.8% 102.1% 6.7%
Number of Active Employees 289 265 24 9.1%
Total Salary $16,389,734 $14,275,796 $2,113,938 14.8%
Average Salary $56,712 $53,871 $2,841 5.3%
Average Age 48.7 49.2 (0.5) (1.0%)
Average Service 10.0 10.8 (0.8) (7.4%)
Number of Retirees/Survivors 196 194 2 1.0%
Total Benefits* $5,592,602 $5,179,279 $413,323 8.0%
Average Benefits* $28,534 $26,697 $1,837 6.9%
Average Age 75.1 74.6 0.5 0.7%
*excluding State reimbursed COLA

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2. EXECUTIVE SUMMARY (c ontinue d)
B | FUNDED STATUS AND PLAN EXPERIENCE SINCE PRIOR VALUATION
Funded Status
The unfunded actuarial liability (UAL) and funded ratio are measures of the plan’s funded status. These measures
reflect the plan’s position as of January 1, 202 5. We believe these measures, by themselves, are not appropriate for
assessing the sufficiency of plan assets to cover the estimated cost of settling the plan’s benefit obligations or assessing
the need for or the amount of future contributions. However, we believe these measures, in conjunction with the
plan’s funding schedule shown on page 9, are appropriate for assessing the amount of future contributions.
The UAL in this valuation reflects the actuarial value of assets, a method that recognizes investment gains and losses
over five years. As of January 1, 2025, the actuarial value of assets is 100.3% of the market value. On a market value
basis, the plan is overfunded by $8.7 million and the funded ratio is 108.5%.
Plan Experience
Plan Liabilities
The System experienced a gain on the actuarial liability of approximately $2.4 million since the last valuation (the
actuarial liability was less than expected). This gain is primarily due to salary increases for continuing active members
increasing less than assumed as well as more retiree deaths and more turnover than assumed over the past 2 years.
Plan Assets
The System previously adopted an asset smoothing methodology to determine the actuarial value of assets (AVA).
As of January 1, 2025, the AVA is $112.1 million compared with the market value of assets (MVA) of $111.8 million.
The AVA is 100.3% of the MVA. The rates of return on a market value basis in 2023 and 2024 were 11.6% and 9.5%
respectively. The returns on an AVA basis were approximately 8.2% and 7.5% respectively. The recognition of a
portion of prior deferred investment gains and losses contributed to an asset gain of approximately $2.2 million over
the 2-year period on an AVA basis.
Total
There was a total net gain of approximately $4.6 million since the last valuation ($2.4 million gain on actuarial liability
plus $2.2 million gain on the AVA).
Actuarial Assumptions
Investment Return
Early in 2025 , NEPC, the Pension Reserves Investment Trust’s (PRIT) investment consultant, provided figures for
30-year expected return projections using a building block approach, the target allocation and expected long-term
returns by asset class. The expected annual return is 8.0% in this study (7.5% if we assume expenses of 50 basis points
and the expected return reflects a gross return). This figure is 30 basis points (bps) greater than the corresponding
figure from the 2024 study. Note that the 8.0% average expected return does not mean that the expected return each
year will be 8.0%. In fact, over the shorter term (10 years), the average expected return is 6.9% (30 bps greater than
last year). Greater expected returns in later years determine NEPC’s long -term projection. The NEPC projected returns
are the first measure we use to determine a reasonable range for the long-term investment return assumption.

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2. EXECUTIVE SUMMARY (continued)
B | FUNDED STATUS AND PLAN EXPERIENCE SINCE PRIOR VALUATION (continued)
A comparison of recent expected return projections as well as historical PRIT returns is shown below.
Expected Annual Return
2019 2020 2021 2022 2023 2024 2025
10-year expected return * 6.8% 6.2% 5.8% 5.7% 7.0% 6.6% 6.9%
30-year expected return 7.9% 7.3% 6.8% 6.9% 7.7% 7.7% 8.0%
* In years prior to 2020, NEPC’s short -term horizon was 5-7 years
Actual Returns as of December 31, 2024
2024 9.6%
5 years (2020-2024) 8.1%
10 years (2015-2024) 8.1%
20 years (2005-2024) 7.6%
40 years (1985-2024) 9.4%
Note: Historically, PRIT reported its returns gross of expenses. Beginning with the 2024 return, PRIM reported the
annual return net of expenses. PERAC calculated the gross return to be 9.62% for 2024 compared to the PRIM reported
return of 9.07%.
Besides the NEPC analysis, we review the capital market assumptions (CMAs) of other investment consultants for
comparison. We estimate the short-term and long-term expected returns using these capital market assumptions and
PRIT’s asset allocation. The exp ected returns using these CMAs are generally consistent with that of NEPC.
In addition, we also review the Horizon Actuarial Services Survey of Capital Market Assumptions. The latest survey
compares the assumptions of 41 different investment consultants including NEPC. The Horizon study used in our
analysis was published in August 2024. Since it reflects 2024 capital market assumptions, there is a one-year lag
between the results of the most recent Horizon survey and the current NEPC study. The Horizon long-term (20 years)
expected return based on its hypothetical portfolio is 7.0% (7.2% in the prior study) and is fairly consistent with the
level expectation we saw with NEPC a year ago. We also estimated the short-term and long-term results using the
Horizon average expected returns by asset class and PRIT’s asset allocation. This result is consistent with NEPC.
The National Association of State Retirement Administrators (NASRA) periodically publishes a survey of investment
return assumptions used by over 100 large public plans. The most recent survey available at the time of our analysis
was published in July 2024. In this survey, the average investment return assumption was 6.90%, a slight decrease
from the 6.91% figure published in July 2023. Although the NASRA survey does not consider different asset
allocations between the plans, it demonstrates the continuing reduction, and again, perhaps a bottoming of this
assumption.
The system used an investment return assumption of 6.75% in the prior valuation. We recommended maintaining that
assumption. Because of the small decrease in the NEPC short-term expectation and the unchanged NEPC long-term
expectations from last year, the 6.75% assumption that we used in our January 1, 2023 actuarial valuation continues
to be below the long-term and the short-term expectations.
The Board adopted a 6.75% assumption and all results, and the funding schedule included in this report reflect this
assumption.
We will continue to monitor this assumption in each future valuation.

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2. EXECUTIVE SUMMARY (continued)
B | FUNDED STATUS AND PLAN EXPERIENCE SINCE PRIOR VALUATION (continued)
Mortality
We completed a local system retiree mortality analysis in 2019. As part of our analysis, we compared our experience
to the public retirement plan mortality tables released in 2019 (the Pub-2010 Mortality Tables- which did not include
Massachusetts public plan experience). We found that our experience was not consistent with these tables. Based on
our findings, we adopted the RP-2014 Blue Collar table projected generationally with Scale MP-2018 and updated to
Scale MP-2020 in our 2021 valuations and to Scale MP-2021 in our 2023 valuations. We continue to use both this
base table and the mortality improvement scale for our 2025 local system actuarial valuations.
Chapter 176 Provisions
Chapter 176 of the Acts of 2011, An Act Providing for Pension Reform and Benefit Modernization, made many changes
to the Chapter 32 pension law. There are several changes that will have the most impact on decreasing plan liabilities
over the longer term. These include an increase in the normal retirement age by two years (for example, from age 65
to age 67 for Group 1 members), an increase in the age (early retirement) reduction factor for ages below the maximum
age (from a 4.0% to a 6.0% annual reduction), and an increase in the period fo r determining a member’s average annual
compensation (from 3 years to 5 years). These changes are effective only for members hired after April 1, 2012.
As of January 1, 2025, there were 215 members hired after April 1, 2012. The normal cost is approximately $190,000
lower and the actuarial liability is approximately $1.9 million lower for these members under the new provisions
compared to the figures under the prior provisions.
COLA Base
This valuation reflects a COLA base of $14,000. The 2023 valuation reflected a $13,000 base. This change increased
the normal cost by approximately $16,000 and the actuarial liability by approximately $493,000.
Salary Adjustment
The salaries provided by the Board included pay from an additional pay period during 2024. To more accurately reflect
the true 2024 pay for the plan, we adjusted the salaries by decreasing them by approximately 3.7%.
Expenses
We have generally included administrative expenses paid by the plan in the development of normal cost in our
actuarial valuations. However, that is not the case with investment-related expenses. Historically, most local systems
have used an investment return assumption that is net of investment related expenses. For a number of years, we have
been reflecting a portion of investment related expenses in the normal cost. We used an expense assumption of
$680,000 in this valuation, which reflects approximately $510,000 of investment related expenses. The total
administrative and investment expenses are included in the normal cost.
Net 3(8)(c) Reimbursements
A common assumption is that §3(8)(c) payments paid from a system are approximately equal to §3(8)(c) payments
paid to a system. However, we found for most local systems, this is not true. For your system, there is net §3(8)(c)
cash outflow during the year. In order to better reflect the actual cost to the System, we have once again included
expected net §3(8)(c) payments in the funding schedule.

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2. EXECUTIVE SUMMARY (continued)
B | FUNDED STATUS AND PLAN EXPERIENCE SINCE PRIOR VALUATION (continued)
Funding Schedule
The funding schedule presented in this report was recently adopted by the Board. The schedule maintains the
appropriation for FY26 from the prior schedule and phases down to only normal cost and net 3(8)(c) payments
beginning in FY29.
GASB 67/68
The auditors requested we use the results of this valuation to prepare the Governmental Accounting Standards Board
(GASB) disclosures for the fiscal year ending June 30, 2025 and the plan year ending December 31, 2024. The
statements are commonly referred to as GASB 67 and GASB 68. GASB 67 relates to financial reporting for state and
local government pension plans (plan financials). GASB 68 relates to financial reporting by state and local
governments for pension plans (employer financials). We have used a measurement date of December 31 in each year
we have provided these disclosures. We have not provided any GASB 67/68 exhibits in this report. These disclosure
exhibits were provided under separate cover.
COVID-19 Pandemic
The assumptions in this report do not reflect any potential impacts of the COVID-19 pandemic on the System. In the
short-term, the pandemic likely had a material effect on the mortality experience, and to a lesser extent, the retirement
and withdrawal experience in ways not anticipated by the assumptions on which the projections are based.

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3. SUMMARY OF VALUATION RESULTS
A. Number of Members on Current Valuation Date
Active Members 289
Vested Terminated Members 5
Non-Vested Terminated Members 90
Retired Members and Survivors 196
Total 580
B. Total Regular Compensation of Active Members $16,389,734
C. Present Value of Future Benefits
Active Members $74,250,329
Retirees, Survivors, and Inactive Members 57,090,977
Total Present Value of Future Benefits $131,341,306
D. Normal Cost
Total Normal Cost $3,135,258
Expected Employee Contributions 1,485,371
Net Employer Normal Cost $1,649,887
E. Actuarial Liability
Active Members $45,947,776
Vested Terminated Members 550,907
Non-Vested Terminated Members 497,521
Retirees and Survivors 56,042,549
Total Actuarial Liability $103,038,753
F. Actuarial Value of Assets $112,058,045
G. Unfunded Actuarial Liability: E – F ($9,019,292)
H. Funded Ratio: F/E 108.8%

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4. APPROPRIATION DEVELOPMENT FOR FISCAL YEAR 2026
A | DERIVATION OF APPROPRIATION
Cost Under Current Funding Schedule
1. a. Employer Normal Cost as of January 1, 2025 $1,649,887
b. Estimated Expenses $680,000
c. Total Employer Normal Cost (a+b, adjusted for timing) $2,434,732
2. Net 3(8)(c) payments $300,000
3. a. Unfunded Actuarial Liability as of January 1, 2025 ($9,019,292)
b. FY26 amortization payment * (Phases down to normal cost in FY29) $665,268
4. Total FY26 Payment [Sum of 1(c), 2 and 3(b)] $3,400,000
* FY26 appropriation was maintained at the same level as the prior schedule.
All amounts assume payments will be made September 1 of each fiscal year.

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4. APPROPRIATION DEVELOPMENT FOR FISCAL YEAR 2026 (continued)
B | CURRENT FUNDING SCHEDULE
Fiscal Normal Net Amort. of Total Unfunded Total Cost
Year Cost 3(8)(c) UAL Cost Act. Liab. % Increase
2026 2,434,732 300,000 665,268 3,400,000 (9,323,693)
2027 2,544,295 300,000 455,705 3,300,000 (10,655,571) -2.9%
2028 2,658,788 300,000 241,212 3,200,000 (11,856,050) -3.0%
2029 2,778,434 300,000 3,078,434 (12,911,055) -3.8%
2030 2,903,463 300,000 3,203,463 (13,782,551) 4.1%
2031 3,034,119 300,000 3,334,119 (14,712,873) 4.1%
All amounts assume payments will be made September 1 of each fiscal year.
Total cost payments are phased down to normal cost and net 3(8)(c) payments in FY29.
FY26 normal cost includes assumed expenses of $680,000 and is assumed to increase 4.5% per year.
FY26 appropriation was maintained at the same level as the prior schedule.

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5. PLAN ASSETS
A | BREAKDOWN OF ASSETS BY INVESTMENT TYPE
Cash and Cash Equivalents $2,645,509
PRIT Fund 109,021,737
Accounts Receivable 97,686
Accounts Payable (4,603)
Total $111,760,329
B | BREAKDOWN OF ASSETS BY FUND
Annuity Savings Fund $14,486,941
Annuity Reserve Fund 3,606,325
Pension Fund 2,988,728
Pension Reserve Fund 90,678,335
Total $111,760,329
C | MARKET VALUE OF ASSETS $111,760,329
D | ACTUARIAL VALUE OF ASSETS $112,058,045

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5. PLAN ASSETS (continued)
E | DEVELOPMENT OF ACTUARIAL VALUE OF ASSETS
2023 2024 2025
1A. Development of total investment income including appreciation
1. Beginning of year market value 93,951,460 103,530,098 111,760,329
2a. Employee contributions 1,563,630 1,690,115
b. Employer contributions * 0 3,675,000
c. Other receipts * 4,341,484 354,647
d. Total receipts: (a) + (b) + (c) 5,905,114 5,719,762
e. Benefit payments 5,297,371 5,516,054
f. Expenses 648,871 681,142
g. Other disbursements 968,804 957,144
h. Total disbursements: (e) + (f) + (g) 6,915,046 7,154,340
i. Cash flow: (d) – (h) (1,009,932) (1,434,578)
3. End of year market value 103,530,098 111,760,329
4. Investment income including appreciation: (3) – (1) – (2(i)) 10,588,570 9,664,809
B. Expected market value development
1. Beginning of year market value 93,951,460 103,530,098
2. Cash flow (A2(i)) (1,009,932) (1,434,578)
3. Expected Return on (1) 6,341,724 6,988,282
4. Expected return on cash flow (34,085) (48,417)
A2(i) x 0.0675 / 2
5. Expected market value end of year 99,249,166 109,035,385
(1)+(2)+(3)+(4)
C. Gain/(loss) for year: A3-B5 4,280,932 2,724,944
D. Development of Actuarial Value of Assets
1. Beginning of year market value 93,951,460 103,530,098 111,760,329
2a. Asset gain/(loss) in prior year (18,573,354) 4,280,932 2,724,944
b. Asset gain/(loss) in 2 nd prior year 11,915,557 (18,573,354) 4,280,932
c. Asset gain/(loss) in 3 rd prior year 4,249,146 11,915,557 (18,573,354)
d. Asset gain/(loss) in 4 th prior year 6,588,766 4,249,146 11,915,557
3. Unrecognized gain/(loss) (4,691,938) (2,103,215) (297,716)
.8 x [2a] + .6 x [2b] + .4 x [2c] +.2 x [2d]
4. Beginning of year actuarial value of assets: [1] - [3] 98,643,398 105,633,313 112,058,045
5. Actuarial value / Market value 105.0% 102.0% 100.3%
6. Adjusted actuarial value: (4) but not less than 90%
nor greater than 110% of market value 98,643,398 105,633,313 112,058,045
* For 2023, the Total Receipts are correct. However, we showed the Employer Contributions and the other receipts as reported in
the annual statement.

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6. DEVELOPMENT OF THE ACTUARIAL GAIN OR LOSS (In thousands)
A | GAIN/(LOSS) ON ACTUARIAL LIABILITY
1. Actuarial Liability 1/1/23 96,581
2. Total Normal Cost 1/1/23 2,727
3. Interest on (1) and (2) 6,703
4. Benefits paid during 2023 [a] 5,179
5. Interest on (4) assuming mid-year payment 175
6. Expected Actuarial Liability 1/1/24: (1)+(2)+(3)-(4)-(5) 100,657
7. Estimated Total Normal Cost 1/1/24: 2,850
8. Interest on (6) and (7) 6,987
9. Benefits paid during 2024 [a] 5,386
10. Interest on (9) assuming mid-year payment 182
11. Expected Actuarial Liability 1/1/25 before adjustments: (6)+(7)+(8)-(9)-(10) 104,926
12. Increase due to COLA base change 493
13. Expected Actuarial Liability 1/1/25: (11)+(12) 105,419
14. Actuarial Liability 1/1/25 103,039
15. Total Gain/(Loss): (13)-(14) 2,380
B | GAIN/(LOSS) ON PLAN ASSETS
1. Actuarial Value of Assets (AVA) 1/1/23 98,643
2. Interest on (1) 6,658
3. Net Receipts 2023 [b] 5,905
4. Net Disbursements 2023 [b] 6,915
5. Net Cash Flow 2023: (3)-(4) (1,010)
6. Interest on (5) assuming mid-year payment (34)
7. Expected AVA 1/1/24: (1)+(2)+(5)+(6) 104,257
8. Interest on (7) 7,037
9. Net receipts 2024 [b] 5,720
10. Net disbursements 2024 [b] 7,154
11. Net Cash Flow 2024: (9)-(10) (1,434)
12. Interest on (11) assuming mid-year payment (48)
13. Expected AVA 1/1/25: (7)+(8)+(11)+(12) 109,812
14. AVA 1/1/25 112,058
15. Total Gain/(Loss) on Assets: (14)-(13) 2,246
C | TOTAL GAIN/(LOSS)
1. Actuarial liability Gain/(Loss) (A15) 2,380
2. Asset Gain/(Loss) (B15) 2,246
3. Total Gain/(Loss): (1)+(2) 4,626
[a] Estimated
[b] From Annual Statement

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7. GASB INFORMATION
The actuarial information required by Governmental Accounting Standards Board (GASB) Statement Nos. 67 and 68
replaced the information required by Statement Nos. 25 and 27.
The information required by GASB 67 (plan) is to be reported and measured as of December 31 each year.
The information required by GASB 68 (employer) is to be reported as of the end of the fiscal year (June 30 for cities
and towns). We are allowed to select a measurement date at any date during the fiscal year. We have selected a
measurement date of December 31 which is consistent with GASB 67.
We have not provided any GASB 67 or 68 exhibits in this valuation report. We provided the disclosure exhibits under
separate cover.
Although GASB 25 no longer applies, we are including the schedule of funding progress previously required by the
Statement to provide historical context.
Schedule of Funding Progress
Actuarial
Valuation
Date
Actuarial Value
of Assets
(a)
Actuarial
Accrued
Liability
(AAL)*
(b)
Unfunded AAL
(UAAL)
(b-a)
Funded
Ratio
(a/b)
Covered
Payroll
(c)
UAAL
as a % of
Cov. Payroll
((b-a)/c)
1/1/25 $112,058,045 $103,038,753 ($9,019,292) 108.8% $16,389,734 (55.0%)
1/1/23 $98,643,398 $96,580,757 ($2,062,641) 102.1% $14,275,796 (14.4%)
1/1/21 $82,997,901 $89,526,129 $6,528,228 92.7% $13,001,168 50.2%
1/1/19 $71,085,354 $85,410,585 $14,325,231 83.2% $13,204,268 108.5%
1/1/17 $61,095,218 $75,606,098 $14,510,880 80.8% $12,853,218 112.9%
* excludes State reimbursed COLA

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8. INFORMATION ON SYSTEM MEMBERSHIP
A critical element of an actuarial valuation is accurate and up-to-date membership information. PERAC conducted an
extensive review of member data submitted for this valuation.
A | ACTIVE MEMBERS
Actives Vested Terminations
Number of Members 289 5
Average Age 48.7 49.0
Average Service 10.0 12.6
Average Salary $56,712 $43,139
Average Annuity Savings Fund Balance $47,494 $52,152
Age by Service Distribution of Active Members
Years of Service
Present
Age
0 - 4 5 – 9 10 - 14 15 - 19 20 - 24 25 - 29 30+ Total
0 - 25 11 11
25 - 29 21 2 23
30 - 34 16 7 23
35 - 39 13 9 5 1 28
40 - 44 15 7 1 2 25
45 - 49 14 4 6 5 1 1 31
50 - 54 13 10 7 5 2 2 1 40
55 - 59 5 5 8 5 5 2 6 36
60 - 64 9 7 3 6 5 5 6 41
65+ 6 5 4 4 5 3 4 31
Total 123 56 34 28 18 13 17 289

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8. INFORMATION ON SYSTEM MEMBERSHIP (continued)
A | ACTIVE MEMBERS (continued)
Salary by Age Distribution of Active Members
Present
Age
Number of
Members
Total
Salary
Average
Salary
0 - 24 11 $428,849 $38,986
25 - 29 23 $1,075,591 $46,765
30 - 34 23 $1,324,487 $57,586
35 - 39 28 $1,722,316 $61,511
40 - 44 25 $1,320,229 $52,809
45 - 49 31 $1,843,133 $59,456
50 - 54 40 $2,403,169 $60,079
55 - 59 36 $2,183,754 $60,660
60 - 64 41 $2,548,333 $62,154
65+ 31 $1,539,873 $49,673
Total 289 $16,389,734 $56,712

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8. INFORMATION ON SYSTEM MEMBERSHIP (continued)
B | RETIREES AND SURVIVORS
Superannuation
Accidental
Disability
Ordinary
Disability Survivors Total
Number of Members 158 13 0 25 196
Average Age 75.4 72.1 0 74.7 75.1
Average Annual Benefit $29,040 $39,158 $0 $20,188 $28,582
Benefit by Payment and Retirement Type
Superannuation
Accidental
Disability
Ordinary
Disability Survivors Total
Total Annuity $950,704 $53,509 $0 $92,451 $1,096,664
Pension (excluding State
reimbursed COLA)
$3,630,714 $455,139 $0 $410,084 $4,495,937
State reimbursed COLA $6,822 $405 $0 $2,156 $9,383
Total $4,588,241 $509,053 $0 $504,691 $5,601,985

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8. INFORMATION ON SYSTEM MEMBERSHIP (continued)
B | RETIREES & SURVIVORS (continued)
Benefit by Age Distribution
Present Age
Number of
Members Total Benefits Average Benefits
45 - 49 1 $34,998 $34,998
50 - 54 1 $40,888 $40,888
55 - 59 11 $476,459 $43,314
60 - 64 13 $415,945 $31,996
65 - 69 37 $1,390,128 $37,571
70 - 74 32 $888,575 $27,768
75 - 79 41 $1,079,447 $26,328
80 - 84 32 $634,630 $19,832
85 - 89 14 $323,159 $23,083
90+ 14 $317,756 $22,697
Totals 196 $5,601,985 $28,582

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9. VALUATION COST METHODS
A | ACTUARIAL COST METHOD
The Actuarial Cost Method which was used to determine pension liabilities in this valuation is known as the Entry
Age Normal Cost Method . Under this method the Normal Cost for each active member on the valuation date is
determined as the level percent of salary, which, if paid annually from the date the employee first became a member
of the retirement system, would fully fund by retirement, death, disability or termination, the projected benefits which
the member is expected to receive. The Actuarial Liability for each member is determined as the present value as of
the valuation date of all projected benefits which the member is expected to receive, minus the present value of future
annual Normal Cost payments expected to be made to the fund. Since only active members have a Normal Cost, the
Actuarial Liability for inactive members, retirees and survivors is simply equal to the present value of all projected
benefits. The sum of Normal Cost and Actuarial Liability for each member is equal to the Normal Cost and Actuarial
Liability for the Plan. The Unfunded Actuarial Liability is the Actuarial Liability less current assets.
The Normal Cost for a member will remain a level percent of salary for each year of membership except for changes
in provisions of the Plan or the actuarial assumptions employed in projection of benefits and present value
determinations. The Normal Cost for the entire system will also change due to the addition of new members or the
retirement, death or termination of members. The Actuarial Liability for a member will increase each year to reflect
the additional accrual of Normal Cost. It will also change if the Plan provisions or actuarial assumptions are changed.
Differences each year between the actual experience of the Plan and the experience projected by the actuarial
assumptions are reflected by adjustments to the Unfunded Actuarial Liability. An experience difference which
increases the Unfunded Actuarial Liability is called an Actuarial Loss and one which decreases the Unfunded Actuarial
Liability is called an Actuarial Gain.
B | ASSET VALUATION METHOD
The actuarial value of assets is determined in accordance with the deferred recognition method under which 20% of
the gains or losses occurring in the prior year are recognized, 40% of those occurring 2 years ago are recognized, etc.,
so that 100% of gains or losses occurring 5 years ago are recognized. The actuarial value of assets will be adjusted, if
necessary, in order to remain between 90% and 110% of market value.
C | LOW-DEFAULT-RISK OBLIGATION MEASURE (LDROM)
The Low-Default-Risk Obligation Measure (LDROM) was determined using the Entry Age Normal Cost Method (the
same method used to determine the plan’s actuarial liabilities). The LDROM was calculated using the same
assumptions as used to determine the plan’s actuarial liabilities except the LDROM was calculated using a 5.44%
discount rate.
For more information on the LDROM, see our discussion in Section 10 of this report.

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10. ACTUARIAL DISCLOSURES
A | RISK
Risk is defined as the potential for differences in future plan measurements resulting from actual future experience
deviating from actual assumed experience. The plan is subject to a number of risks that could affect the plan’s future
financial condition. Examples of risk include the following:
Investment risk – the potential that investment returns will be different than expected;
Asset/liability mismatch risk – the potential that changes in asset values are not matched by changes in the liabilities;
Interest rate risk – the potential that interest rates will be different than expected;
Longevity and demographic risk – the potential that mortality or other demographic experience will be different than
expected;
Contribution risk – the potential that employer contributions to the plan will not be made or will not be made at the
assumed level.
In this section, we provide a brief analysis of several risk measures that we believe are most significant for the plan.
A more detailed risk assessment that includes further scenario testing (assessing the impact of one or several events
on the plan’s fi nancial condition, for example projecting plan investment returns), stress testing (assessing the impact
of an adverse change in one or several factors), sensitivity testing (assessing the impact of a change in an actuarial
assumption), or stochastic modeling (generating numerous possible outcomes by allowing for random variations in
input items to assess the distribution of the outcomes) may provide a better understanding than the analysis in this
section.
Unfunded Actuarial Liability and Funded Ratio
The plan’s unfunded actuarial liability (UAL) and the funded ratio for the past 10 years are shown below. The UAL
is the Actuarial Liability less the Actuarial Value of Assets. The funded ratio is the Actuarial Value of Assets divided
by the Actuarial Liability. The retirement system is said to be fully funded when the UAL is zero, or said another
way, when the funded ratio is 100%. Actuarial valuations have been performed every two years over this period and
the valuation results are determined as of January 1.
Valuation Date
2015 2017 2019 2021 2023 2025
UAL (in millions) $16.8 $14.5 $14.3 $6.5 ($2.1) ($9.0)
Funded Ratio 75.9% 80.8% 83.2% 92.7% 102.1% 108.8%
The UAL has decreased in each valuation over this period. Reductions in the investment return assumption and
changes to the mortality assumption in the past 10 years have increased the plan’s actuarial liability and therefore the
UAL. The plan has reduced its investment return assumption several times from 7.50% in the 2015 valuation to the
current assumption. The mortality assumption has also been updated several times including the adoption of a fully
generational table in 2015 and the update described in this report. For comparison, using the January 1, 2015 plan
assumptions, as of January 1, 2025 the plan would be overfunded by approximately $17 million.
The funded ratio has generally increased in each valuation over this period. The assumption changes described above
have also significantly impacted the funded ratio. For comparison, using the 2015 plan assumptions, the 2025 funded
ratio would be approximately 118%.

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10. ACTUARIAL DISCLOSURES (continued)
A | RISK (continued)
Investment Return Assumption and Funding Schedule
Investment return assumption: 7.0%
Amortization of UAL basis: Total cost payments are phased down to normal cost and net 3(8)(c) payments by
FY29.
The System maintained the investment return assumption at 6.75% in this valuation. For comparison, currently 78
Massachusetts systems use an assumption of 7.0% or below. There are 27 systems that use an assumption less than
7.0%.
When a system becomes fully funded, PERAC does not recommend that it immediately reduces the appropriation
payment to only normal cost. PERAC recommends funding to a level greater than 100% (say 120%-130%). This can
be accomplished either by maintaining the level of appropriation for a few years, or gradually phasing down the
appropriation to the normal cost. This allows the system to build a surplus which can be used to offset any future
increases to the UAL (i.e. actuarial losses, changes in assumptions or plan provisions that increase the plan’s
liabilities).

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10. ACTUARIAL DISCLOSURES (continued)
A | RISK (continued)
Maturity and Volatility Measures
There are several plan maturity and volatility ratios that can provide significant insight into the level of a plan’s risk.
To illustrate, we are providing two such measures. In both cases, we show the 10-year history of the ratio. In addition,
we comment on how the results compare with other local systems. We believe that these measures are more useful
when compared to historical averages and the results of other plans. See our notes earlier in this section regarding the
assumption changes over this period which significantly affect these results.
Retiree Actuarial Liability / Total Actuarial Liability
This ratio measures the percentage of actuarial liability due to the plan’s retirees. Higher ratios and/or an increase in
this ratio indicate a system that is more mature or becoming more mature. As this ratio increases, it generally indicates
the retired population is increasing faster than the active member population and there is a greater likelihood of
negative cash flow (benefit payments exceeding employer and employee contributions). Retirees in pay status are
more expensive than younger members. As a plan matures, it becomes more sensitive to investment volatility and the
plan will have more difficulty recovering from losses even with increases in employer contributions.
Valuation Date
2015 2017 2019 2021 2023 2025
Retiree/Total Liability 0.48 0.43 0.49 0.54 0.54 0.54
The ratios have been consistent over the past three valuations indicating the plan has become more mature. Public
sector plans often have aging populations generating an increase in this ratio. We have found this to be generally true
for the systems for which PERAC is the actuary. In 2015, this ratio ranged from .35 to .63. In recent valuations this
range has increased to .50 to .67. Many local systems have seen an increase in this ratio over the past 10-15 years as
the number of retirees, and specifically the retiree liability has increased as a percentage of the total. A number of
systems have had fairly consistent ratios and a few have had decreasing ratios. Such systems have already reached
and or maintained a more mature level.
Actuarial Liability / Pay
This measure reflects how a change in actuarial liability (and therefore UAL) may impact the adequacy of
contributions. As this ratio increases, plan contributions (using a traditional amortization schedule) increase as a
percentage of pay. Furthermore, like the Retiree Liability ratio noted above, higher ratios exacerbate the impact of
investment losses on plan contributions.
Valuation Date
2015 2017 2019 2021 2023 2025
Actuarial Liability/Pay 5.9 5.9 6.5 6.9 6.8 6.3
This system showed increasing rates before they began to decrease in 2023. For comparison with other PERAC
systems, in 2015, this ratio ranged from 4.5 to 8.0. For more recent valuations this range has increased. The ratios
currently range from 4.9 to 8.5. This ratio has increased for most local systems indicating increasing levels of risk.

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10. ACTUARIAL DISCLOSURES (continued)
A | RISK (continued)
Impact of Investment Returns on Unfunded Liability and Funded Ratio (Market Value Basis)
We have prepared a simple 5-year projection illustrating the potential impact of actual investment returns on funding
levels. For this estimate, we used the market value of assets and did not attempt to develop an actuarial value of assets.
In projecting the actuarial liability, we assumed the January 1, 2025 actuarial assumptions are exactly realized over
the next 5 years and that there are no changes in assumptions over this period.
We first projected the market value of assets assuming the actual return for each of the next 5 years is 6.75% (the
assumption used in the valuation). For comparison, we have also shown the results if the return were 3.0% each year.
The 3.0% assumption is not intended to be a worst-case basis, but only to reflect the impact of a lower short-term
return than the current plan assumption. As discussed earlier in the Executive Summary, projected returns are lower
over the next 10 years than over the next 30 years.
Valuation Date
2025 2026 2027 2028 2029 2030
UAL (in millions)
6.75% ($8.7) ($9.8) ($10.6) ($11.3) ($11.8) ($12.2)
3.00% ($8.7) ($5.6) ($2.0) $2.1 $6.9 $11.9
Funded Ratio
6.75% 108.5% 109.1% 109.5% 109.7% 109.6% 109.6%
3.00% 108.5% 105.2% 101.8% 98.2% 94.4% 90.7%
For this comparison, we assumed that for the 3.0% projections, the appropriation for the next 5 years would remain
as in the current funding schedule (and the same as that if the actual returns were 6.75% per year). If returns were
actually 3.0% per year, the funding schedule might have to be increased before FY30.
Cash Flow
Cash flow reflects receipts (primarily employee and employer contributions) less disbursements (primarily benefit
payments and expenses). We use the information provided in the Annual Statement but subtract any investment
income credit or excess investment income entries from the total receipts. Then we measure the ratio of receipts to
disbursements. A ratio greater than 1.0 means receipts are greater than disbursements (positive cash flow). Likewise,
a ratio less than 1.0 means receipts are less than disbursements (negative cash flow).
Most Massachusetts public systems have negative cash flow. This is not a significant issue for long-term funding but
presents potential issues for short-term funding. All else being equal, over the short term, a negative cash flow
produces a yearly funded ratio lower than it would have been if there were positive cash flow. This is because a
portion of the investment earnings are being used to pay the net benefits and expenses. Therefore, less of the
investment earnings are included in the end of the year value of the plan assets resulting in a lower MVA and a lower
funded ratio. This may dampen funded ratio expectations somewhat when reviewing 5-year projections. This plan
had a ratio of 0.88, 0.85 and 0.80 using the 2022-2024 Annual Statements respectively. Since the ratio is near 1.0 and
the plan is fully funded, there is not a significant impact on our 5-year funded ratio projections.

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10. ACTUARIAL DISCLOSURES (continued)
B | LOW-DEFAULT-RISK OBLIGATION MEASURE (LDROM)
For plan years after February 15, 2023, Actuarial Standard of Practice Number 4 (ASOP 4) requires the disclosure of
a new liability measure. This measure is known as the Low-Default-Risk Obligation Measure (LDROM). The
LDROM is calculated using a different discount rate than the discount rate used for funding purposes. The discount
rate used for the LDROM is based on the short duration Financial Times Stock Exchange (FTSE) Pension Liability
Index published as of December 31, 2024. The LDROM discount rate will typically be vastly lower than the discount
rate based on the plan’s actual investment portfolio. As a result, the LDROM will be significantly greater than the
plan’s funding liability. For the LDROM calculation, we used a discount rate of 5.44%.
The LDROM is not intended to be a measure of the plan’s funding nor is it intended to be a measure of the plan’s
health. Most importantly, the LDROM is not the “true measure” of the plan’s liabilities.
LDROM Liability as of January 1, 2025 $117,992,095
Funding Actuarial Accrued Liability as of January 1, 2025 $103,038,753
The LDROM helps understand the cost of investing in an all-bond portfolio and significantly lowering expected long-
term investment returns. The funded status and Actuarially Determined Contributions are determined using the
expected return on assets which reflects the actual investment portfolio. Benefit security for members of the plan relies
on a combination of the assets in the plan, the investment returns generated on those assets and the promise of future
contributions from the plan sponsors.
Since the assets are not invested in an all-bond portfolio, the LDROM does not indicate the funding status or progress,
nor provide information on necessary plan contributions or the security of plan participants. The difference between
the plan’s Actuaria l Accrued Liability and the LDROM can be thought of as representing the expected taxpayer
savings from investing in the plan’s diversified portfolio compared to investing only in high quality bonds.
C | REASONABLE ACTUARIALLY DETERMINED CONTRIBUTION (ADC)
For plan years after February 15, 2023, Actuarial Standard of Practice Number 4 (ASOP 4) also requires the disclosure
of a reasonable Actuarially Determined Contribution (ADC). This reasonable ADC, if different from the System’s
scheduled ADC, is not intended to be the System’s true funding measure. We believe that the system’s current
schedule meets the requirements of a reasonable amortization method under ASOP 4 . As such, the System’s
reasonable ADC for FY26 is equal to the scheduled FY26 payment of $3.40 million.
D | ACTUARIAL MODELS
The software used in our actuarial valuations measures the present value of the plan’s actuarial liabilities from which
we develop funding schedules that determine annual appropriations for each system. The software was created and is
maintained by a national vendor of actuarial software. We have used this software for over 25 years. We periodically
review the results of the software by analyzing detailed individual test lives and have compared our results to those of
other actuaries using the same data set. The valuation output is prepared before a final review by the actuary.
In addition, we used a simple projection model prepared in a spreadsheet, to perform a rough analysis of the impact
of investment returns on the unfunded actuarial liability and funded ratio for the next five years. The work is tailored
to each valuation and reviewed by the actuary.

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11. ACTUARIAL ASSUMPTIONS
Investment Return/Discount Rate
6.75% per year net of investment expenses .
The investment return assumption is a long-term assumption and is based on capital market expectations by asset
class, historical returns, and professional judgment. We considered analysis prepared by PRIM’s investment advisor
using a building block approach which included expected returns by asset class, risk analysis, and the determination
of a 30-year expected target rate of return.
Discount Rate (for LDROM only)
5.44% (based on short duration FTSE Pension Liability Index published as of December 31, 2024)
Inflation
2.5% per year
Interest Rate Credited to the Annuity Savings Fund
3.5% per year
Assumed Rate of Cost-of-Living Increases (COLA)
3.0% per year (on the first $14,000 of an allowance)
Mortality
Pre-retirement mortality reflects the RP-2014 Blue Collar Employees table projected generationally with Scale MP-
2021 (gender distinct).
Post-retirement mortality reflects the RP-2014 Blue Collar Healthy Annuitant table projected generationally with
Scale MP-2021 (gender distinct).
For disabled members, the mortality rate is assumed to be in accordance with the RP-2014 Blue Collar Healthy
Annuitant Table (set forward one year for both males and females) projected generationally with Scale MP-2021
(gender distinct).
It is assumed that 55% of pre-retirement deaths are job-related for Group 1 and 2 members and 90% are job-related
for Group 4 members. For members retired under an Accidental Disability, 40% of deaths are assumed to be from the
same cause as the disability.
We completed a local system retiree mortality study in 2019. As part of our analysis, we compared our experience to
the new public retirement plan mortality tables released in early 2019 (the Pub-2010 Mortality Tables). Public plans
from Massachusetts were not included in this study. We found that our experience was not consistent with these
tables. The mortality assumptions selected reflect observed current mortality and expected mortality improvement as
well as professional judgement.

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11. ACTUARIAL ASSUMPTIONS (continued)
Salary Increase
Service Group 1 Group 2 Group 4
0 6.00% 6.00% 7.00%
1 5.50% 5.50% 6.50%
2 5.50% 5.50% 6.00%
3 5.25% 5.25% 5.75%
4 5.25% 5.25% 5.25%
5 4.75% 4.75% 5.25%
6 4.75% 4.75% 4.75%
7 4.50% 4.50% 4.75%
8 4.50% 4.50% 4.75%
9 4.25% 4.50% 4.75%
10+ 4.25% 4.50% 4.75%
The salary increase assumption reflects both prior experience and professional judgment.
Withdrawal
Based on analysis of past experience. Annual rates are based on years of service. Sample annual rates for Groups 1
and 2 are shown below. For Group 4 members the rate is 0.015 each year for service up to and including 10 years. No
withdrawal is assumed thereafter.
Service Groups 1 & 2
0 0.150
5 0.076
10 0.054
15 0.033
20 0.020
Withdrawal rates are based on our most recent experience analysis which reviewed age, gender and job group. The
assumption reflects this analysis as well as professional judgment.
Disability
Based on an analysis of past experience. It is also assumed that the percentage of job-related disabilities is 55% for
Groups 1 & 2 and 90% for Group 4.
Age Groups 1 & 2 Group 4
20 0.00010 0.0010
30 0.00030 0.0030
40 0.00101 0.0030
50 0.00192 0.0125
60 0.00280 0.0085
Disability rates are based on our most recent experience analysis which reviewed age, gender and job group. The
assumption reflects this analysis as well as professional judgment.

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11. ACTUARIAL ASSUMPTIONS (continued)
Expenses
An amount of $680,000 has been included in the Normal Cost for FY26. This amount includes $170,000 which
represents the estimated administrative expenses and $510,000 which represents a portion of the investment related
expenses. This amount is assumed to increase by 4.5% each year.
Members Hired on or After April 2, 2012
Chapter 176 of the Acts of 2011 changed the retirement eligibility for the different job groups. For example, Group
1 eligibility changed from 55 years old with 10 years of service to 60 years old with 10 years of service (Chapter 176
removed the provision that allowed retirement at any age with 20 years of service). Our software system is
programmed such that at any given age, a member is assumed to either retire or terminate, but not both. Therefore,
we adjusted the retirement and termination rates for members impacted by Chapter 176. For example, for Group 1
members, we removed retirement rates for ages 50-59. Termination rates remain in effect for those years. We will
monitor these assumptions going forward.
Retirement
Age Groups 1 & 2 Group 4
Male Female
45-49 0.000 0.000 0.010
50 0.010 0.015 0.020
51 0.010 0.015 0.020
52 0.010 0.020 0.020
53 0.010 0.025 0.050
54 0.020 0.025 0.075
55 0.020 0.055 0.150
56 0.025 0.065 0.100
57 0.025 0.065 0.100
58 0.050 0.065 0.100
59 0.065 0.065 0.150
60 0.120 0.050 0.200
61 0.200 0.130 0.200
62 0.300 0.150 0.250
63 0.250 0.125 0.250
64 0.220 0.180 0.300
65 0.400 0.150 1.000
66 0.250 0.200 1.000
67 0.250 0.200 1.000
68 0.300 0.250 1.000
69 0.300 0.200 1.000
70 and after 1.000 1.000 1.000
Retirement rates are based on our most recent experience analysis which reviewed age, service, gender and job group.
The assumption reflects this analysis as well as professional judgment.

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12. SUMMARY OF PLAN PROVISIONS
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 under Chapter 32, but one of these classes, Group 3, is made up exclusively of the
State Police who are in the State Retirement System. 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.
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.

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12. SUMMARY OF PLAN PROVISIONS (continued)
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 2 and 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.
AMOUNT OF SUPERANNUATION 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 ca nnot exceed 80% of the member’s highest three year (or five year salary 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.
• Salary is defined as gross regular compensation. For persons 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
for members who retire af ter April 2, 2012 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.

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12. SUMMARY OF PLAN PROVISIONS (continued)
AMOUNT OF BENEFIT (continued)
• 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 73.
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.

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12. SUMMARY OF PLAN PROVISIONS (continued)
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 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 preced ing 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 dur ing 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 is entitled.
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 $ 1,125.36 per year (or $312.00 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.

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12. SUMMARY OF PLAN PROVISIONS (continued)
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 $1,125.36 per year, per child (or $312.00 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 $300,000.00 from the State Retirement
Board.
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 mem ber’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 and for Systems that
accept the provisions of Section 65 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 minimum 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 minimum superannuation retirement age, the age 60 benefi t 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 who became a member on or after April 2,
2012 and whose death occurred prior to the member’s minimum superannuation retirement age, the benefit shall be
calculated using an age 55 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.

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12. SUMMARY OF PLAN PROVISIONS (continued)
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%. The
first $12,000 (or the increased COLA base if adopted by the Board) 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
was calculated upon the fi rst $12,000 of a retiree’s allowance. Now the maximum base upon which the COLA is
calculated varies from System to System. Each increase must be accepted by a majority vote of the Retirement Board
and approved by the legislative body.
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 is unmarried at the time of retirement for a member whose retirement becomes effective on or
after February 2, 1992, 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. 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 will not be undertaken.
This is because such a person will receive a separate retirement allowance from each system.

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13. GLOSSARY OF TERMS
Actuarial Accrued Liability – That portion of the Actuarial Present Value of pension plan benefits which is not
provided by future Normal Costs or employee contributions. It is the portion of the Actuarial Present Value attributable
to service rendered as of the Valuation Date.
Actuarial Assumptions – Assumptions, based upon past experience or standard tables, used to predict the occurrence
of future events affecting the amount and duration of pension benefits, such as: mortality, withdrawal, disablement
and retirement; changes in compensation; rates of investment earnings and asset appreciation or depreciation; and any
other relevant items.
Actuarial Cost Method (or Funding Method) – A procedure for allocating the Actuarial Present Value of all past and
future pension plan benefits to the Normal Cost and the Actuarial Accrued Liability.
Actuarial Gain or Loss (or Experience Gain or Loss) – A measure of the difference between actual experience and
that expected based upon the set of Actuarial Assumptions, during the period between two Actuarial Valuation dates.
Note: The effect on the Accrued Liability and/or the Normal Cost resulting from changes in the Actuarial
Assumptions, the Actuarial Cost Method, or pension plan provisions would be described as such, not as an
Actuarial Gain (Loss).
Actuarial Present Value – The dollar value on the valuation date of all benefits expected to be paid to current members
based upon the Actuarial Assumptions and the terms of the Plan.
Amortization Payment – That portion of the pension plan appropriation which represents payments made to pay
interest on and the reduction of the Unfunded Accrued Liability.
Annual Statement - The statement submitted to PERAC each year that describes the asset holdings and Fund balances
as of December 3l and the transactions during the calendar year that affected the financial condition of the retirement
system.
Annuity Reserve Fund – The fund into which total accumulated deductions, including interest, is transferred at the
time a member retires, and from which annuity payments are made.
Annuity Savings Fund – The fund in which employee contributions plus interest credited are held for active members
and for former members who have not withdrawn their contributions and are not yet receiving a benefit (inactive
members).
Assets – The value of securities as described in Section 8.
Cost of Benefits – The estimated payment from the pension system for benefits for the fiscal year. This was the
minimum amount payable during the first six years of some funding schedules.
Funding Schedule – The schedule based upon the most recently approved actuarial valuation which sets forth the
amount which would be appropriated to the pension system in accordance with Section 22(6A), Section 22D or Section
22F of M.G.L. Chapter 32.
GASB – Governmental Accounting Standards Board
Normal Cost – Total Normal Cost is that portion of the Actuarial Present Value of pension plan benefits, which is to
be paid in a single fiscal year. The Employee Normal Cost is the amount of the expected employee contributions for
the fiscal year. The Employer Normal Cost is the difference between the Total Normal Cost and the Employee Normal
Cost.

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13. GLOSSARY OF TERMS (continued)
Pension Fund – The fund into which appropriation amounts as determined by PERAC are deposited and from which
pension benefits are paid.
Pension Reserve Fund – The fund which shall be credited with all amounts set aside by a system for the purpose of
establishing a reserve to meet future pension liabilities. These amounts would include excess interest earnings.
Present Value of Future Benefits - The value on the valuation date of all of the future benefits that are expected to
be paid to members of the System discounted with interest and the probability of benefit receipt
Special Fund for Military Service Credit – The fund which is credited with amounts paid by the retirement board
equal to the amount which would have been contributed by a member during a military leave of absence as if the
member had remained in active service of the retirement board. In the event of retirement or a non-job related death,
such amount is transferred to the Annuity Reserve Fund. In the event of termination prior to retirement or death, such
amount shall be transferred to the Pension Fund.
Unfunded Actuarial Accrued Liability – The excess of the Actuarial Accrued Liability over the Assets.

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COMMONWEALTH OF MASSACHUSETTS
Public Employee Retirement Administration Commission
10 Cabot Road, Suite 300 | Medford, MA 02155
Phone: 617-666-4446 | Fax: 617-628-4002
Web: www.mass.gov/perac