Massachusetts State Retirement Options: A, B, C and Refund

Updated October 2, 2026. Quick answer: Under Massachusetts General Laws chapter 32, a retiring member elects option (a), (b) or (c) in writing on a prescribed form, and if no election is in effect the allowance is paid under option (b). Option (c) continues two-thirds of the lesser allowance to a nominated beneficiary. A married member’s election needs the spouse’s signature, with a thirtieth day exception. A refund of deductions is paid in one sum within 60 days of a written request and is in lieu of an allowance. This page is built from chapter 32, not the board’s member guide.

More on public pension systems, topic by topic: Massachusetts retirement late entry and make-up payments, Massachusetts teacher out-of-state service credit and Massachusetts pension after leaving service.

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.

Boston city employees belong to a separate local system with its own rules: Boston Retirement System decisions.

What this page is built from, and what it is not

This page is built from four sections of Massachusetts General Laws chapter 32: section 12 (options on retirement), section 11 (return of accumulated total deductions), section 3 (membership, rejoining and make-up payments) and section 10 (leaving service). It is not built from the member guide of the Massachusetts State Retirement Board, which was not read, so board forms, board-set deadlines and current practice are outside it. Confirm them with the board.

Chapter 32 is not written only for state employees. Section 11 refers to “any retirement system established under this chapter”, so the text read reaches many Massachusetts public systems. This page says where a section is general and does not call a rule state-only unless the text does. Teachers have their own page: Massachusetts teachers retirement decisions. For state tax, see Massachusetts retirement taxes and does Massachusetts tax pensions.

The election at retirement: option (a), (b) or (c)

Section 12 lets a retiring member elect “any one of the three options”: option (a), option (b) or option (c). A fourth, option (d), is not a retirement choice and is covered below.

Section 12 sets no dollar amount for the reduction under options (b) and (c); that comes from an actuarial calculation the statute describes in words. For option (d) it does state dollar floors, and its under-retirement rule has an age tier. Under G.L. c. 32, s. 12(2) the statute says: “If such member dies before attaining age 55 and before being retired, such nominated eligible beneficiary shall receive the Option (c) allowance to which such member would have been entitled had the member attained age 55 at the time of the member’s death and had the member’s retirement taken place on the date of the member’s death.” For Group 1 members the section adds: “Notwithstanding the previous sentence, if a member of Group 1 who became such a member on or after April 2, 2012 dies before attaining age 60 and before being retired, such nominated eligible beneficiary shall receive the Option (c) allowance to which such member would have been entitled had the member attained age 60 at the time of the member’s death and had the member’s retirement taken place on the date of the member’s death.” For the general trade, see single-life versus joint-and-survivor pension.

Filing, timing and the default

The election is made in writing “on a prescribed form filed with the board”, and the member may change it by making a new election the same way. Timing limits that freedom. The section says “no election of an option shall be valid unless such election is filed with the board” by the date the board receives the written application for retirement, and it lists other windows, including a filing made by the date the allowance becomes effective or, where a department head files the application, within a further period.

The option takes effect with the allowance. If the member dies first, the section says that “such option shall not take effect” and the accumulated total deductions are returned under section 11.

If nothing is filed in time, the statute chooses: “the retirement allowance of such member shall be paid in accordance with the terms of option (b)”. A member who wants option (a) or (c) therefore has to file for it.

Options (a) and (b)

Option (a) pays “A full retirement allowance payable to such member”, made of an annuity worth the member’s accumulated regular deductions, a pension for the rest, and an additional annuity if there are additional deductions. Payments under any option end at death “except as otherwise provided for in the option elected”. Option (a) as read here names no beneficiary payment, so it is the largest allowance with no continuing allowance for anyone else.

Option (b) is “A lesser retirement allowance payable to such member”. Its annuity is sized so its value on the effective date is the actuarial equivalent of the member’s accumulated total deductions, and if the member dies before receiving that much in annuity payments, “the excess of such value over such total amount shall be paid in one sum”. The pension part is the same as under option (a).

A computed example from assumed figures, not a Massachusetts figure: if the deductions’ value on the effective date is $40,000 and the member has received $15,000 in annuity payments at death, the excess is 40,000 minus 15,000, a computed $25,000 paid in one sum to the beneficiary. Once payments reach the full value, nothing remains.

Option (c): the joint and last survivor allowance

Option (c) gives the member a lesser allowance, with “two-thirds of the yearly amount of such lesser retirement allowance” continued to the nominated beneficiary for life, and the beneficiary receives “not less than two-thirds of the retirement allowance such member is receiving at the time of his death”.

A computed example from an assumed lesser allowance, not a Massachusetts figure: if the lesser allowance were $3,000 a month, two-thirds of it is 3,000 times 2 divided by 3, a computed $2,000 a month to the beneficiary. The pages read give no reduction table, so no member’s actual reduction is stated.

Three conditions matter. The beneficiary must be an eligible person: the list starts with the spouse and a former spouse who has not remarried and goes on to “child, father, mother, sister or brother of such member”. If the beneficiary dies after retirement, the statute says the member “thereafter shall be paid a full retirement allowance and may not choose another option”. If the beneficiary dies before the allowance is effective, the option does not take effect and the member may make a new election. The statute (G.L. c. 32, s. 12(2)(c)) says the new election must be requested in writing before the allowance would have started: “If such beneficiary dies before the date such retirement allowance becomes effective, this option shall not take effect, and in such case such member, upon his written request on a prescribed form filed with the board prior to such effective date, may make a new election of any one of the first three options specified in this subdivision.” The total is also capped, but in the statute the cap closes the option (d) paragraph rather than option (c): “The total annual allowance derived from and payable under the provisions of this option, together with any allowance payable under the provisions of section twelve B, shall at no time be greater than the annual rate of regular compensation, payable to such member on the date of death of such member.”

Spouse signature

The statute is direct on married members: “For any member who is married, an election shall not be valid unless it is accompanied by the signature of the member’s spouse indicating the member’s spouse’s knowledge and understanding of the retirement option selected.” If the signature is missing, the board notifies the spouse by registered mail, and the statute adds that “no such signature shall be required if the spouse fails to submit such signed acknowledgment on or before the thirtieth day” after the spouse receives the information. Until signed the election does not take effect, apart from that rule.

The requirement does not apply to a divorced member who has filed a probate court order providing for the option.

Option (d) and a closed change window

Under option (d), a member by written notice may name an eligible beneficiary who, if the member dies before retiring, “shall receive the yearly amount of the option (c) allowance” the member would have been entitled to. The nomination can be cancelled by written notice before death. The monthly member-survivor allowance for a spouse “shall not be less than $500 for members of the state teachers’ and state employees’ retirement system”. That $500 paragraph begins with a date: “Beginning April 2, 2012, the normal monthly member-survivor allowance provided for under this option to a spouse of a deceased member shall not be less than $500 for members of the state teachers’ and state employees’ retirement system.” The earlier paragraph of the same option states the floor with conditions: “The normal monthly member-survivor allowance provided for under this option to a spouse of a deceased member shall not be less than $250 or $500 a month, whichever is applicable to such spouse, subject to the provisions of paragraph (e) of section one hundred and two; provided, however that the deceased member was a member in service as described in subparagraph (i) of paragraph (a) of subdivision (1) of section three on the date of death and that the member had not less than two full years of creditable service and had been married to such spouse for not less than one year; and provided, further, that such member and such spouse were living together on the date of death of the member, or that the board finds that they were living apart for justifiable cause other than desertion or moral turpitude on the part of such spouse.” For other systems, the paragraph “shall take effect for the members of a retirement system of any other political subdivision by a majority vote of the board of such system and by the local legislative body”, so that floor is not automatic everywhere.

A one-time change of option for 2004 retirees is closed: “The change of election under this subdivision shall be made on or before July 1, 2006, and shall be retroactive to the date of retirement.” The opening sentence of that subdivision limits who qualified (G.L. c. 32, s. 12(4)): “Any person who retired under chapter 32 between July 1, 2004 and December 27, 2004, inclusive, or the surviving spouse of any such person who is deceased, who elected Option (a) or Option (b) of subdivision (2) may change such selection to Option (b) or Option (c) of said subdivision (2).”

Leaving service before retirement

A member who leaves covered service has three paths: an allowance now, a deferred allowance with deductions left in, or a refund. Section 10 gives a Group 1, Group 2 or Group 4 member the right to apply for an allowance after “twenty or more years of creditable service”, and the same right to a member who has “attained age fifty-five”. The whole sentence also requires a qualifying separation (G.L. c. 32, s. 10(1)): “Any member classified in Group 1, Group 2 or Group 4 who after completing twenty or more years of creditable service, resigns or voluntarily terminates his service, or fails of reappointment, or whose office or position is abolished, or is removed or discharged from his office or position without moral turpitude on his part, or any member who, after having attained age fifty-five, resigns, or fails of reappointment or is removed or discharged from his office or position without moral turpitude on his part, or any such member whose office or position is abolished, shall, upon his written application on a prescribed form filed with the board, receive a superannuation retirement allowance to become effective as provided in subdivision (3) of this section.” The subdivision then ends: “This subdivision shall not apply to any member who entered service on or after April 2, 2012.” The pages read do not define the groups.

If the allowance starts before age fifty-five, the percent used is “the per cent for age fifty-five as appearing in the table in paragraph (a) of said subdivision (2) with one tenth of one per cent subtracted for each year the age at last birthday preceding retirement is under age fifty-five”. That reduction is the Group 1 and Group 2 rule. For a Group 1 or Group 2 member under 55 at termination, the statute also says (G.L. c. 32, s. 10(1)): “If any such member, classified in either Group 1 or Group 2, has not attained age fifty-five on the date of his termination of service the normal yearly amount of such allowance shall be equal to that prescribed for a member classified in Group 1; otherwise it shall be equal to that prescribed for a member in the group in which he is classified.” For a Group 4 member the rule is keyed to age 45 (G.L. c. 32, s. 10(1)): “if such member, classified in Group 4, has not attained age forty-five on the date of his termination of service the normal yearly amount of such allowance shall be equal to that prescribed for a member classified in Group 1, and if such retirement allowance becomes effective before such member has attained age forty-five the per cent to be used in computing such allowance shall be the per cent for age forty-five as appearing in paragraph (a) of said subdivision (2) with one tenth of one per cent subtracted for each year the age at last birthday preceding retirement is under age forty-five.” A computed example from an assumed age, not a Massachusetts figure: a member whose age at last birthday is 52 is 3 years under age fifty-five, and 3 times 0.1 is a computed 0.3 of a percentage point off the percent for age fifty-five. That table is in section 5, which was not read, so no pension amount is stated. The section adds: “This subdivision shall not apply to any member who entered service on or after April 2, 2012.”

A member with ten years of service who resigns and “leaves his accumulated total deductions in the annuity savings fund of the system of which he is a member” has “the right upon attaining age fifty-five, or at any time thereafter, to apply for a termination retirement allowance”. For those who joined on or after April 2, 2012, the right begins at “the minimum retirement age for the member’s Group”. The allowance starts at termination only if the member applies within sixty days; otherwise it is deferred. Its size rests on service “only for the period prior to the actual date of his termination of service”, unless the member is later reinstated. The pages read do not name vesting.

Refund of deductions versus leaving them in

The refund and the allowance are alternatives, with one exception the statute states (G.L. c. 32, s. 10(4)): “Any retirement allowance granted to a member in accordance with the provisions of sections one to twenty-eight inclusive, except as otherwise provided for in subdivision (3) of section twenty-five, shall be in lieu of the payment to him of his accumulated total deductions.” On the refund, the same subdivision says: “Any member not entitled to a retirement allowance in accordance with the provisions of sections one to twenty-eight inclusive, or any member entitled to a retirement allowance as provided for in this section whose allowance has not become effective, shall be paid the amount of his accumulated total deductions as provided for in subdivision (1) of section eleven upon his written request therefor on a prescribed form filed with the board on or after the date of his termination of service, except as provided for in section 11 or section fifteen.” Under section 11 the member is to “be paid in 1 sum the amount of his accumulated total deductions” within 60 days of the request. The whole sentence is conditioned (G.L. c. 32, s. 11(1)(a)): “A member entitled to a return of the member’s accumulated total deductions as provided for in paragraph (c) or (d) of subdivision (1) of section 4, in subdivision (4) of section 10, in paragraph (b) of subdivision (2) of section 13 or in subdivision (3) of section 25 shall, subject to subdivision (8) of section 3, this section and section 15, be paid in 1 sum the amount of his accumulated total deductions within 60 days after the member’s filing with the board on a prescribed form his written request therefor.”

Interest depends on the member. For one who joined after January 1, 1984 and voluntarily withdraws with less than 120 months of creditable service, “the rate of regular interest for purposes of calculating accumulated total deductions shall be 3 per cent”. Other members get “100 per cent of the rate of regular interest payable”. Interest also stops accruing at a point, and the board must then tell the member so in writing. The payment can be held for child support arrears, or until an employer plan obligation is satisfied. Deductions of a member whose service ended at least ten years ago may be moved to a reserve fund, but a person “may establish a claim therefor at any time”. The transfer applies only to certain members (G.L. c. 32, s. 11(3)): “The accumulated total deductions of any member not having the right to receive a retirement allowance under the provisions of section five, six, seven or ten, and whose service has been terminated for at least ten years, or any amounts due to any designated beneficiary or beneficiaries or to the estate of a deceased member which has not been claimed within ten years of the date of death of such member shall be transferred to the Pension Reserve Fund or the Commonwealth’s Pension Liability Fund established under section twenty-two.”

The deferred allowance is stated for a member who leaves deductions in the fund, and an allowance falls due at the maximum age “unless prior to such age his accumulated total deductions have been returned”. The pages read do not say what a refund does to credited service, but the repayment rules below treat withdrawn deductions as something to repay with interest to restore credit. A refund is therefore a decision about giving up service credit; the general trade is in pension refund versus leaving it.

Buying back service

Section 3 restores withdrawn service by repayment. A former member who returns within two years may “pay into the annuity savings fund of the system in one make-up sum, or in installments”, an amount equal to the deductions withdrawn plus buyback interest, and then is “entitled to all creditable service resulting from such previous employment”. The statute limits the two-year rule to a return to the same governmental unit (G.L. c. 32, s. 3(6)(c)): “Any former member who is reinstated to or who re-enters the active service of the governmental unit in which he was formerly employed to serve in a position which is subject to the provisions of this chapter, within two years from the date of his separation therefrom, may again become a member in service and may pay into the annuity savings fund of the system in one make-up sum, or in installments upon such terms and conditions as the board may prescribe, an amount equal to the accumulated regular deduction withdrawn by him, together with the buyback interest to the date of reemployment.” Until repayment, such a member is not eligible for any disability benefit under the chapter.

After a longer gap the member may repay in one sum or instalments before the allowance is effective (G.L. c. 32, s. 3(6)(d)): “Any former member who is reinstated to or who re-enters the active service of the governmental unit in which he was formerly employed to serve in a position which is subject to the provision of this chapter, more than two years after the date of his last separation therefrom may, before the date any retirement allowance becomes effective for him, pay into the annuity savings fund of the system in one sum, or in instalments, upon such terms and conditions as the board may prescribe, make-up payments of an amount equal to the accumulated regular deductions withdrawn by him, together with buyback interest.” If payments are still being made at that point, the member will “be entitled to credit for that proportion of his previous creditable service” that tracks the payments actually made. Section 1 defines buyback interest as “one-half of actuarial assumed interest”.

A rejoining member cannot receive a superannuation, ordinary disability or termination allowance “unless and until he shall have been in active service for at least two consecutive years”, with an exception where “he was eligible to receive a retirement allowance under the provisions of section ten at the time of his last separation from service”. In the statute that exception is confined to some members and carries a transfer carve-out (G.L. c. 32, s. 3(6)(e)): “or unless, in the case of any member who is reinstated to or who re-enters active service as provided for in paragraph (b) of this subdivision or who transfers his membership as provided for in paragraph (8) (a) of this section, he was eligible to receive a retirement allowance under the provisions of section ten at the time of his last separation from service; provided that, in the case of a member whose account is transferred under said paragraph (8) (a), this paragraph shall not apply after the member has rendered service or attained an age so that he would have been eligible to retire if he had continued to be a member of the retirement system from which his account was transferred.” A late-entry member gets full credit for earlier service only after make-up payments with buyback interest, and a former member of another system joining a new one may repay deductions withdrawn from the earlier one. See the pension buyback calculator, and ask the board for the interest and installment terms.

Cost-of-living adjustments

The four sections read do not state a cost-of-living adjustment. This page makes no claim about COLAs.

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 Massachusetts’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 four chapter 32 sections read do not describe rollovers or withholding on a refund, so the IRS statements here are the only ones on the page; confirm how a refund would be paid and withheld with the board before requesting one. 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”. 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.

Figures stated in the four sections

The numbers below are the ones the four sections state. Each is taken from its section, and none is a reduction factor or a benefit percent.

What this page could not settle

• The pages read do not state the amount of the reduction under option (b) or option (c); the statute describes an actuarial equivalent without a table or factors.
• The pages read do not state the benefit formula percent table, the retirement ages by group, or the groups into which jobs fall; those are in sections not read.
• The pages read do not state whether a retiree can change option after the allowance has started, beyond the closed one-time window for 2004 retirees.
• The pages read do not state the rate of buyback interest, or the installment terms the board may prescribe.
• The pages read do not state what a refund does to membership or credited service in terms, beyond the repayment rules and the deferred allowance conditions quoted.
• The pages read do not state a cost-of-living adjustment or a vesting rule by name.
• The pages read do not state whether the conditions on the earlier member-survivor minimum also govern the later $500 floor.
• The pages read do not describe a lump sum retirement option, a partial lump sum, or a deferred retirement option program, and do not describe withholding or rollover treatment of a refund.
• The pages read are statute text only; the Massachusetts State Retirement Board’s member guide, forms and calculators were not read.

Massachusetts state retirement topic pages

Each row links to the page that reads one topic in the Massachusetts state retirement member documents: the topic, then the summary that page carries.

Common mistakes

• Assuming the board will pick option (a) for a member who files nothing; if no election is in effect, the statute pays the allowance under option (b).
• Filing an option election late; the statute makes an election invalid unless it is filed by the stated deadlines.
• Overlooking the spouse’s signature on a married member’s election; the election does not take effect until the signature is on file, apart from the thirtieth day rule.
• Treating option (c) as reversible after retirement; if the beneficiary dies first the member is paid a full allowance and may not choose another option.
• Taking a refund of deductions without pricing what repaying the withdrawn deductions with buyback interest would cost if the member returns to covered service.
• Assuming a rule in chapter 32 is specific to the state employees’ system when the text applies to retirement systems established under the chapter generally.

Related on this site: Massachusetts retirement taxes, does Massachusetts tax pensions, Massachusetts teachers retirement decisions, single-life versus joint-and-survivor pension, pension refund versus leaving it, pension buyback calculator and public pension retirement decisions by system.

Sources

• Massachusetts General Laws chapter 32 (MSERS), source 1: https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIV/Chapter32/Section12
• Massachusetts General Laws chapter 32 (MSERS), source 2: https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIV/Chapter32/Section11
• Massachusetts General Laws chapter 32 (MSERS), source 3: https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIV/Chapter32/Section3
• Massachusetts General Laws chapter 32 (MSERS), source 4: https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIV/Chapter32/Section10
• 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 2, 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.