Frequently Asked Questions

All permanent full-time and part-time employees have a mandatory deduction withheld from their regular compensation. You do not pay into social security.

These contributions are a source of income to the Hingham Retirement Board to help fund a lasting resource of pension benefits.

Yes, the funds are fully invested by the Pension Reserves Investment Board (PRIM) based on the rules and regulations set by legislation.

The most anyone can collect as an annual retirement allowance is approximately 80% of his or her average 3 high consecutive years of regular salary.

Your contributions are placed in an individual annuity savings fund where it earns annual interest at a statutory rate comparable to that of a passbook savings account. The interest rate is determined by the Public Employee Retirement Administration Commission and the Commissioner of Banks. This annual interest rate is independent of that earned on the Retirement System's investments.

No. Employee contributions are never used to fund administrative expenses. The System's operating expenses, including all fees associated with actuarial and audit services, investment management, consultant and custodial fees, are funded solely through the system's investment income.

When you are vested, you have earned the right to a retirement allowance at a later date. You no longer have to remain in service to be eligible to collect it.

You are eligible to retire at age 55 or older if you have at least 10 years of creditable service or at any age with 20 years or more of service.

Because the Hingham Retirement Board is a defined benefit plan, your benefits are determined by a formula and are not affected by the amount of money in your annuity account at the time of retirement. The factors used to determine your benefit are: your age at the time of retirement, your amount of creditable service, your group classification and an average of your 3 consecutive years of regular compensation.

If you were a member of another retirement system subject to the provisions of Chapter 32 of the General Laws, and you withdrew your retirement funds, it is possible to buy back your prior creditable service. The Retirement Office will verify your prior service then calculate the amount of your buyback. You must repay the amount withdrawn, plus interest to the date of repayment. You may complete a buy back as a lump sum payment or a payment plan up to the number of years you wish to buy back, but not more than 5 years.

If you have retirement contributions from a previous public employer directly transferred to our system, you are entitled to maintain the level of contribution you were paying in your previous employment. If you received a refund of retirement contributions from your previous retirement system and later became a member of the Hingham Retirement Board, your contribution rate with Hingham Retirement Board will be at the new member rate, regardless of what you were paying in the prior system. If you should later purchase your prior creditable service through a buyback, your contribution level will remain at the new member rate and will not be reduced to your previous rate.

No. Regular compensation is the portion of your salary that is subject to retirement contributions. Overtime, bonus pay, severance pay, payments made for unused sick time, and certain other payments, are not considered regular compensation, are not subject to retirement and cannot be used towards your 3-year average for the purpose of determining your retirement allowance.

No. Your retirement benefit is separate from and not related to participation in the deferred compensation plan. The plan is an optional savings vehicle, which allows you to supplement your retirement savings on a tax-deferred basis. It is strongly recommended that this plan be considered as an option by members.

If you leave your job and are not going to work for another governmental unit which comes under the provisions of Chapter 32, you may be eligible to receive a refund of your contributions. If you are leaving to accept a position with a Massachusetts political subdivision subject to Chapter 32, you must transfer your retirement contributions directly to your new retirement system.

Effective July 1, 2010, members who first joined the retirement system after January 1, 1984 and who have less than 10 years of creditable service, and voluntarily withdraws his contributions, are entitled to annual interest of 3% upon withdrawal of their accumulated total retirement deductions. Members who established an earlier date of membership, or who have more than 10 years of service, will receive 100% of the rate of regular interest upon withdrawal of their accumulated deductions. "Regular interest" is defined as interest at a rate established by PERAC obtained from the average rates paid on individual savings accounts by no less than 10 financial institutions.

No. You may request a refund of your funds at any time after termination. If you leave your funds on deposit, however, and later seek a refund, your deductions will only earn interest for 2 years after termination. The prior answer outlines the criteria used to determine your interest eligibility.

Any member who terminates employment may be eligible to withdraw retirement funds. If the member is vested and has earned the right to a retirement allowance at a later date, careful consideration should be given to the value of the retirement benefit he or she may be forfeiting in exchange for a refund.

If you are vested and terminate employment, you can choose to "defer" your retirement by leaving your money in the system until you are ready to retire.

No. There is no loan provision in this plan. An active member cannot withdraw or borrow any contributions from the fund under any circumstances.

Your contributions and all the interest you receive from your account are subject to federal income tax (with exception of any contributions made prior to January 12, 1988). When processing a refund of retirement contributions, the Retirement Office is required to withhold 20% of the taxable portion of your refund for federal tax. The 20% tax payment is required only if the refund is made directly to the member. To defer tax payments, you must make a direct rollover of your retirement funds to an Individual Retirement Account (IRA) or another type of retirement account with a financial institution. With a direct rollover, no tax is withheld and the entire taxable portion of your refund is transferred. If you have both taxable and nontaxable contributions, you may accept receipt of the nontaxable portion of your refund without tax consequence and the taxable portion may be rolled over.

If you are married and die before you retire, your surviving spouse will have the option of collecting a monthly benefit, including a monthly allowance for children under the age of 18 or if a student in an accredited institution until age 22, or receiving a lump sum payment of your contributions. Contact the Retirement Office for more information.