Research Methodology & Formulas
We believe in showing our work. Here are the exact official formulas and assumptions used to generate your estimates.
Research Basis
This page documents the logic derived from M.G.L. c. 32 and MSRB regulations. While we strive for 100% statutory accuracy, these results are approximations for planning purposes. Official final determinations are always made by the State Retirement Board.
1The Core Pension Formula
Annual Pension = Avg. Salary × Years of Service × Benefit Factor
- Average Salary: The average of your highest 36 consecutive months of regular compensation (or highest 5 years for those hired after April 2, 2012).
- Benefit Factor: A percentage based on your age at retirement and your Group classification (1, 2, or 4). This typically ranges from 1.5% to 2.5% per year of service.
- The 80% Cap: Your base pension cannot exceed 80% of your average salary.
2Cost of Living Adjustment (COLA)
Massachusetts state retirees typically receive an annual COLA. The current statutory base is often misunderstood.
The "$13,000 Base"
The standard 3% COLA is only applied to the first $13,000 of your annual pension allowance, not the total amount.
Maximum Annual Increase
This results in a maximum increase of roughly $390/year (or $32.50/month), compounding annually over time.
3Survivor Options (Rate Factors)
We calculate Option C based on the actuarial tables provided by PERAC. The reduction factor depends on the age difference between you and your beneficiary.
- Option A: No survivor benefits suitable (100% payout).
- Option B: Declining account balance (approx. 1-3% reduction).
- Option C: Joint and Survivor annuity (~9-12% reduction typ.).