Updated October 7, 2026. Quick answer: A Boston Retirement System member who retires with a pension picks one of three options. Option A pays the maximum monthly amount and leaves a survivor nothing. Option B pays on average 3 to 5 percent less and leaves unspent annuity reserve money as a lump sum. Option C pays on average 10 to 12 percent less and leaves a beneficiary two-thirds for life. The choice cannot be changed after retirement. Leaving with a refund forfeits any right to a retirement allowance, and 20% of the taxable portion is withheld if paid directly.
Massachusetts county and city retirement boards run their own systems under the state pension law: Norfolk County Retirement System decisions, Bristol County Retirement System decisions and Cambridge Retirement System decisions.
Massachusetts county and regional retirement boards run their own systems under the state pension law: Middlesex County Retirement System decisions and Worcester Regional Retirement System decisions.
What this page covers and what it does not
This page works from the Boston Retirement System’s own material: two Retirement Department pages on boston.gov (Your Retirement Options, last updated 6/5/26, and How the Boston retirement system works, last updated 10/30/25) and the system’s forms, whose footers date to May 2016 or March 2016. One Group 1 percentage chart hosted on boston.gov cites a different issuer, the Public Employee Retirement Administration Commission (PERAC). Every figure below is the system’s, or is labeled as a computed example from assumed inputs. The forms are headed “BOSTON RETIREMENT SYSTEM”. State tax questions are on Massachusetts retirement taxes and does Massachusetts tax pensions, and the separate state employees’ system is on Massachusetts state retirement decisions.
Who belongs, and what the groups mean
Membership is automatic on hire by the City of Boston and four related employers; the pages list the “Boston Public Health Commission” and the “Boston Water and Sewer Commission” among them.
“Your group classification determines the number used to calculate your benefit amount.” “Group 3 is for State Police. The group is not part of the Boston Retirement System.”
When a pension can start and what it pays
Age and service set the start. “You can retire at 55 or older, but you need at least 10 years of service at your job.” “If you have 20 years of service, you can retire at any time.” The pension is capped: “The maximum payable is 80 percent of your final average salary”.
The size of the pension turns on a formula. “We calculate your pension benefit by multiplying your group classification number by your years of public service.” The averaging period differs by hire date: “an average of three years of your highest pay (five years for those who started their membership after April 2, 2012)”. The other Boston page describes the salary base as “the average of three consecutive years of your highest annual salary”, with no hire date split; the first page gives five years for those who started their membership after April 2, 2012.
The Retirement Department’s worked example: “say you were a Group 1 worker, age 65, who chose Option A and had 30 years of service”. Its arithmetic is “2.5 x 30 = 75 percent”. Recomputed from those inputs: 2.5 times 30 is 75 percent, 75 percent of $50,000 is $37,500 a year, and divided by 12 months that is $3,125 a month, matching the page’s printed figures.
Two charts, keyed to hire date. The formula chart on the options page lists one set of Group 1 percentages by age, from 1.5 at age 55 to 2.5 at 65 and older, with 2 shown at age 60, so 20 years at 60 would be 2 times 20, a computed 40 percent of the average. A separate Group 1 chart hosted on boston.gov is headed “For Members-In-Service Hired ON OR AFTER APRIL 2, 2012”. For 20 years at age 60 it prints 29.0 percent, a computed 1.45 percent per year of service. The chart carries its own hire date in the heading and uses the average of the highest consecutive five-year annual rate of regular compensation. A second Group 1 chart is headed “For Members-In-Service Hired BEFORE April 2, 2012” and uses the highest consecutive three-year average. The headings key the charts to hire date, so the member’s hire date and chart should be confirmed with the Retirement Board. That chart is marked “FOR ESTIMATING PURPOSES ONLY”.
What members pay in, and when benefits vest
“When you become a member, we create an Annuity Savings Account for you.” The yearly rate depends on when the member joined:
| Date joined | Contribution each year |
|---|---|
| Before January 1, 1975 | 5% |
| January 1, 1975 to December 31, 1978 | 7% |
| January 1, 1979 to December 31, 1983 | 7%, plus an additional 2% of salary over $30,000 |
| January 1, 1984 to June 30, 1996 | 8%, plus an additional 2% of salary over $30,000 |
| After June 30, 1996 | 9%, plus an additional 2% of salary over $30,000 |
| Teachers Alternate Retirement Program (TARP) | 11% |
Vesting: “You’ll become vested after you’ve worked in your public service job for 10 years.”
The election: Options A, B and C
“There are three options to choose from for your retirement benefits.” The table restates the department’s description.
| Option | What the retiree receives | What a survivor receives |
|---|---|---|
| Option A | The maximum monthly payment for as long as the member lives | Benefits stop when the member dies and surviving beneficiaries receive nothing |
| Option B | On average 3 to 5 percent less than Option A, based on actuarial tables | A lump sum of any unspent money in the annuity reserve account; the beneficiary can be changed at any time and may include organizations |
| Option C (joint and last survivor) | On average 10 to 12 percent less than Option A, based on actuarial tables | Two-thirds of the member’s Option C benefit for life, to one named person |
Option B: “Your surviving beneficiary or beneficiaries receive a lump sum payment of any unspent monies from your annuity reserve account when you die.” The pages read give no figure for what that lump sum is likely to be.
Option C: “This is also known as the joint and last survivor allowance.” “Upon your death, your beneficiary will receive two-thirds of your Option C benefit for life.” “The Option C beneficiary must be either a spouse, former spouse who has not remarried, child, parent, or sibling.” The general trade-off is on single-life versus joint-and-survivor pension, and the survivor side with a government pension is on survivor benefit with a government pension.
A worked example with assumed figures
A computed example from an assumed $3,000 monthly Option A benefit, not a Boston Retirement System figure. The published reductions are averages, so the real reduction depends on the actuarial tables; the results only show the shape of the trade.
Option B at 3 percent less is 3,000 times (100 minus 3) divided by 100, a computed $2,910 a month, and at 5 percent less is a computed $2,850. Option C at 10 percent less is a computed $2,700 a month, and at 12 percent less is a computed $2,640. Two-thirds of those Option C amounts is $2,700 times 2 divided by 3, a computed $1,800 a month, and $2,640 times 2 divided by 3, a computed $1,760 a month, for the beneficiary’s life. Option A pays the full assumed $3,000 and leaves nothing to a survivor.
What cannot be changed after retiring
“You may not change your option selection for any reason after you retire.” Option C differs from Option B on naming: “You may only nominate one person as an Option C beneficiary”. Anyone weighing an option should ask the Retirement Board, before filing, for the figures for their own ages and service.
If a member dies before retiring: Option D and the lump sum
Before retirement, a separate election applies. “The Option D Beneficiary Selection Form allows a member to select one eligible beneficiary to receive a retirement allowance for life, should the member die before retirement.” The department’s page puts it as: “you may choose one person as a beneficiary who would receive a lifetime pension upon your pre-retirement death”. “You can only name one beneficiary, but you can cancel or change your beneficiary before you retire by sending us a written notice.” The Option D form adds that “upon my retirement this form becomes void”.
Without an Option D election the default is a lump sum: “If you don’t use Option D and your spouse decides not to take a lifetime allowance, we will give the amount left in your account in one lump sum to your surviving beneficiaries”. The Lump Sum beneficiary form says “I understand that my accumulated deductions in my account will be paid to my beneficiary(ies) if my death occurs prior to my retirement”, and that “Any person or entity may be a beneficiary”. It adds a limit: “My selection may be superseded by a selection under G.L. c. 32, § 12(2)(d) or if I die leaving an eligible spouse who elects to receive a monthly benefit”. The Option D form says a person nominated for that benefit is “ineligible for a lump sum benefit”.
A spouse can override the form. “your surviving spouse decides to take the benefit, even if they’re not listed as your Option D beneficiary”. The conditions: “you’ve been married for at least one year, and you die while working for the City with at least two years of service”, and “You also need to have been living together at the time of your death, or have a justifiable reason for the two of you living apart.” The department also notes that “If you die before the age of 55 and you weren’t retired, your beneficiary can take the Option C allowance”.
If a member dies within 30 days of retiring
“If you die within 30 days of retiring, your spouse can decide to take Option D benefits.” “This is true even if you decided to pick Option A or B when you retired.”
Lump sums and rollovers: what the pages describe
The pages read describe lump sums as the Option B survivor payment, the pre-retirement death payment and the refund below. They do not describe a lump-sum retirement option, a partial lump sum or a deferred retirement option plan. The general framework is on pension lump sum versus monthly annuity break-even.
Leaving before retirement: refund or leave the account
The refund application says an eligible member “has terminated his/her employment with a governmental unit” and “does not have funds on account with any other Public Retirement System”. The Retirement Department adds “You may not refund your account while you’re still an active employee”.
What a refund gives up is the larger question. “If you have over ten years of creditable service, you may be eligible for a retirement allowance.” “Taking a withdrawal of your accumulated total deductions, you shall forfeit any right to a retirement allowance.” The application advises members to “ask the Boston Retirement System for a personalized estimate of any benefits that you will forego by withdrawing”. Its certification says “if I have 10 years of creditable service, I am waiving my right to monthly pension benefits upon reaching the age of 55”. The warning says over ten years while the certification says 10 years, and the pages read do not reconcile the two, so a member at exactly 10 years should ask the system.
There is no partial option: “You may not take a percentage of the retirement money and leave a balance nor may you borrow against your retirement”. More on the choice is on pension refund versus leaving it.
What a refund pays, and how long it takes
“You will receive your total amount of retirement deductions paid into the retirement system plus interest.” “We will issue your refund within 60 days.” On interest, “The amount of interest that you receive will vary, depending upon the years of creditable service and the nature of the separation from employment”. On child support arrears, the application says “If in arrears, that money will be deducted from the refund”.
How a refund is paid and what is withheld
The department lists three ways to take it. Direct pay: “We will pay you a lump sum plus interest, but less Federal withholding.” Direct rollover: “You may make a direct rollover to an eligible retirement plan.” Partial rollover: “You can roll over part of your contributions to another retirement plan and take the rest as a lump sum payment.” “You may have to pay taxes on whatever you take for yourself.”
Tax details from the same page: “If you are rolling over to a Roth IRA, you’ll have to pay the standard 20 percent federal withholding tax”. The application form offers a check labeled “Refund Request (Taxable)”, a payment to a financial institution labeled “Rollover Request (Non-Taxable)”, or a mix by percentage. In the form’s certification, the member acknowledges that “20% of the taxable portion of such return will be withheld and paid to the Internal Revenue Service”.
A computed example from an assumed $10,000 taxable refund paid directly, not a Boston Retirement System figure: 20% of $10,000 is a computed $2,000 withheld, leaving a computed $8,000 before any other tax. The IRS rules are below. See 20% withholding on a pension lump sum.
Coming back, and buying service credit
A refund is not easy to undo. In the application a member certifies that on re-entry “I will do so with a status of a new member and at the contribution rate then in effect”, and “I will not be entitled to creditable service for my previous service unless I buyback my refund, with interest to date, before my retirement date”.
The enrollment form describes the cost side: a member who re-enters service “will be billed at the buyback rate if an installment agreement is established within one year of the date of re-entry”. “The interest rate for a purchase of creditable service after your first year of re-entry is the full actuarial rate which is substantially higher than the buyback interest rate.”
The Buyback Request Form is where a purchase starts. It asks first: “Are you an active member of the Boston Retirement System (currently making contributions, on a leave of absence, or on workers’ comp)?” and states “Inactive members cannot purchase creditable service”. “If eligible to purchase service, the bill must be paid in full prior to your retirement date.”
It also carries a service warning for refunded time: “you may not be eligible to receive a retirement allowance until you have been in active membership service for at least two consecutive years following the start of your new employment with the Boston Retirement System”. No price, rate figure or schedule appears on the forms read. The general pricing logic is on pension buyback calculator.
Working after retirement
The Retirement Department says working in another public job has limits: “your earnings during the calendar year plus your pension payment can’t be more than what your salary was before you retired”, and “you can’t work more than 1,200 hours during the calendar year”.
What the IRS adds on tax
A refund or lump sum from a public pension is a distribution, so the IRS rules apply on top of the Boston Retirement System’s own. On withholding, the IRS says that a taxable eligible rollover distribution paid to you “is subject to mandatory income tax withholding (generally at a rate of 20%), even if you intend to roll it over later”, and that if you roll it over yourself “you’ll have to add funds from other sources equal to the amount withheld”. The Boston refund application describes the same 20% withholding on a direct payment and points members to the IRS special tax notice. The rollover clock, if the money is paid to you: “you have 60 days from the date you receive it to roll it over to another eligible retirement plan”.
On early distributions the IRS says “the law imposes a 10% additional tax on certain early distributions from certain retirement plans”. Its list of exceptions includes “Distributions made to you after you separated from service with your employer after attainment of age 55” and “Distributions made to a qualified public safety employee from a governmental plan” if the employee separated from service during or after the year they attained age 50 or 25 years of service under the plan, whichever is earlier. Whether an exception fits a particular refund depends on your own plan and facts, so confirm it with a tax preparer before you take one.
What this page could not settle
- The pages read do not state the interest rate credited on contributions or on a refund, only that the amount varies.
- The pages read give no reduction for Options B and C by age, only the averages of 3 to 5 percent and 10 to 12 percent.
- The Group 1 percentage charts are headed by hire date (before April 2, 2012 with a three-year average, on or after April 2, 2012 with a five-year average), but the pages read do not say which chart the options-page formula table matches.
- The pages read do not state a cost-of-living adjustment rule or amount; the retirement checklist PDF linked from the options page has no text layer and could not be read.
- The pages read do not describe a DROP.
- The pages read do not give a price for any service credit purchase, only the buyback rate rule and the one-year installment window.
- The application’s wording (over ten years) and its certification (10 years) are not reconciled, and the Roth IRA withholding sentence on the options page is not reconciled with the application’s wording on a direct payment.
- The forms read carry May 2016 or March 2016 revision dates; the pages read do not say whether later revisions exist.
Common mistakes
- Treating the retirement option as changeable later; the department says it cannot be changed for any reason after retirement.
- Taking a refund without asking for a personalized estimate; a withdrawal forfeits any right to a retirement allowance and cannot be partial.
- Expecting the whole refund by check; 20% of the taxable portion is withheld when it is paid directly.
Related on this site: Massachusetts retirement taxes, does Massachusetts tax pensions, Massachusetts state retirement decisions, pension refund versus leaving it, single-life versus joint-and-survivor pension, pension buyback calculator, 20% withholding on a pension lump sum, pension lump sum versus monthly annuity break-even, survivor benefit with a government pension and public pension retirement decisions by system.
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Answer againSources
- City of Boston, Retirement Department (Boston Retirement System), Your Retirement Options (page last updated 6/5/26): https://www.boston.gov/departments/retirement/your-retirement-options
- City of Boston, Retirement Department (Boston Retirement System), How the Boston retirement system works (page last updated 10/30/25): https://www.boston.gov/departments/retirement/how-boston-retirement-system-works
- Boston Retirement System, Application for Withdrawal of Accumulated Total Deductions (Refund/Rollover Request) (last revision May 2016): https://www.boston.gov/sites/default/files/embed/b/brs-refund.pdf
- Boston Retirement System, New Member Packet 7-20-2026 (Member Enrollment Form last revision March 2016; Beneficiary Selection Form Lump Sum; Option D form): https://www.boston.gov/sites/default/files/file/2026/07/New%20Member%20Packet%207-20-2026.pdf
- Boston Retirement System, Option D Beneficiary Selection Form (If Member Dies Before Retirement) (last revision May 2016): https://www.boston.gov/sites/default/files/file/2021/09/011%20Option%20D%20Bene%20Selection%20Form_Online_No%20Barcode_tcm3-9854.pdf
- Boston Retirement System, Beneficiary Selection Form (Lump Sum) (last revision May 2016): https://www.boston.gov/sites/default/files/file/2024/10/Beneficiary%20Selection%20Form%20Lump%20Sum.pdf
- Boston Retirement System, Buyback Request Form (Non-Teaching Service) (last revision May 2016): https://www.boston.gov/sites/default/files/embed/f/f107_-_ma_pub_svc_credit_purch_app_v0.4_website_version.pdf
- Massachusetts Group 1 Retirement Percentage Chart, hosted on boston.gov (charts dated 10/2016 and 03/2015; chart cites PERAC, a different issuer, as its source): https://www.boston.gov/sites/default/files/file/2026/06/Group%201.pdf
- IRS, Topic no. 413, Rollovers from retirement plans (irs.gov): https://www.irs.gov/taxtopics/tc413
- IRS, Topic no. 558, Additional tax on early distributions from retirement plans other than IRAs (irs.gov): https://www.irs.gov/taxtopics/tc558
Sources: the primary documents linked above, read on October 7, 2026. General information from each system’s own published materials, not legal, tax or financial advice. Your own member statement and the system’s current rules decide your benefit, and a pension counsellor at the system or a fee-only adviser is the right place to confirm anything consequential.