Link to the BHE website on the ORP transfer.
To Members involved in the Section 60 ORP-to-MSERS process
Contrary to information previously provided by the DHE, I am now hearing that TIAA will not waive the 2.5% surrender charge for anyone requesting liquidation of Traditional assets during the 120-day post-employment period.
I have also heard that the State Retirement Board may be claiming that it will demand from TIAA Traditional accounts (1) the amount equal to what a member has already paid toward the updated service cost from other sources, (2) those assets that originated with the transfer of pre-ORP money into the ORP and (3) any rollover assets from other retirement plans that a member might have added to the ORP.
Please monitor the DHE website for further details:
We are looking into these matters. Outcomes may depend on information and assistance from Nick Favorito, Esq., the Executive Director of the State Retirement Board.
If I learn anything more, I will send additional emails to MTA’s higher ed locals that have Section 60 members.
You can contact me directly at email@example.com.
Division of Higher Education
Massachusetts Teachers Association
Dear Section 60 Higher Ed Local Presidents,
Please distribute this email to your members directly or to your Chapter presidents for them to forward to their members. It contains an excerpt from the Department of Higher Education website.
The information below is of vital importance to those of your members who transferred from the ORP to the state system and who have any ORP assets in a TIAA Traditional account.
MTA cannot identify them individually, so we are asking for your help in reaching them. Of course this message will reach more than the targeted audience, but getting the word out in any way is essential.
Thank you for your assistance.
UPDATE March 31, 2017
CRITICAL S60 TRANSFER TIMING: 120-day Window
To MSERS Members with TIAA Traditional Account Assets Who are Retiring or Otherwise Terminating Employment: With the end of the academic year approaching, those MSERS members who have changed plans under Section 60 and who still hold assets in the TIAA Traditional Account must consider their termination of employment (with the Commonwealth) as the best opportunity to remit any funds that remain in the Traditional Account and are still due the Retirement Board, in a single sum. Click here<http://www.mass.edu/forfacstaff/orp/documents/TIAA%20Lump%20Sum%20Link%20Update%20No.%2021.pdf> for detailed information about this important matter.
Section 60 Status: To-date, the DHE and Retirement Board have completed Section 60 asset transfers for 1,331 participants. The total amount of ORP assets transferred to the Retirement Board is $270M.
The Retirement Board has completed its updated calculations of service and cost for an additional 104 participants. The DHE is currently working to research and submit requests for asset transfers to the respective Providers for these participants. These cases are managed chronologically, by the date the Retirement Board enters its updated service and cost calculation results in the Section 60 database that the two agencies share.
Currently, 28 of the 104 pending transfers are delayed for a variety of reasons, including paperwork issues*, source allocation corrections with Providers, and revisions to service and/or cost calculations at the Retirement Board.
*”Paperwork issues” include replacing lost forms or forms that were never received; forms that require edits to ensure the correct amount of “rollover” funds are transferred; and the most common reason: signatures on TIAA’s Direct Transfer forms that have become stale. Participants may hear from the DHE for any of these “paperwork issues.”
TIAA Traditional Account Update: As all participants using TIAA should know, assets held in the TIAA Traditional Account cannot be transferred to the Retirement Board in a single sum. Hence, assets in the Traditional Account remain in the ORP.
However, some or all of these Traditional Account assets are still due the Commonwealth under the terms of Section 60. Accordingly, the Retirement Board reports that it can, and will, withhold a MSERS member’s pension where these assets remain due but unpaid at the time of an individual’s retirement.
Under the terms of Section 60, participants who change plans must forfeit all rights to ORP assets attributable to the Commonwealth’s Employer Contributions. This approach obviates the accrual of employer-funded benefits under two plans for the same period of service.
Additionally, all ORP assets attributable to each participant’s own Employee Contributions must be remitted to the Retirement Board. These employee assets conveyed from the Traditional Account to the Retirement Board would be net of other, personal funds used to complete one’s S60 service purchase at and after the DHE’s initial attempt to transfer ORP assets to the Board. Additional information about this will be included in the FAQ section.
When & How to Transfer Traditional Account Holdings: The Retirement Board is currently working to determine “if, when and how” the TIAA Traditional Account assets can be remitted to the Board.
At this time, the Board is not positioned to receive installment remittances from the TIAA Transfer Payout Annuity.
Consequently, it appears that in most cases, payment of TIAA Traditional assets may not be possible until the member’s termination of employment with the Commonwealth. At that time, a lump sum distribution of the Traditional Account assets is available to each participant.
This method of accessing these assets requires careful planning and timing. Click here<http://www.mass.edu/forfacstaff/orp/documents/TIAA%20Lump%20Sum%20Link%20Update%20No.%2021.pdf> for more information about this matter.
Additional information about this will be included in the FAQ section. Members should monitor the Retirement Board’s web site for updated information about transferring Traditional Account assets to the Board under Section 60.
“Employer Assets” Reminder: Under the terms of Section 60, ORP assets attributable to the Commonwealth’s Employer Contributions cannot be used to purchase service. These assets must be remitted to the state’s Pension Reserve Fund, which pays the Commonwealth’s share of each MSERS Retiree’s monthly pension.
April 27, 2016:
Latest news from Donna Sirutis at MTA:
TO MEMBERS IN THE SECTION 60 ORP-MSERS PROCESS:
Hundreds of you are waiting for your ORP assets to be transferred to the MSERS. Implementation of this phase of Section 60 started in April, 2015. At the beginning of April of this year only 223 former ORP participants had seen their ORP assets transferred to the MSERS.
The process may be about to speed up, because the SRB has generated over 700 updated cost calculations for the DHE to use in making asset transfer requests. The DHE has hired two temporary employees to help with the asset transfers.
The DHE will be prioritizing those with retirement dates before 1-1-17.
However, some of you who intend to retire before 1-1-17 have not sent a Section 60 retirement application to the DHE.
Some of you may have sent the application to the SRB instead of to the DHE.
Some of you may be waiting because you think it is premature to send a retirement application.
But it is important for the DHE to receive a Section 60 retirement application from you so that you will be identified as having an upcoming retirement date. This will help expedite your ORP asset transfer. (The DHE will submit the application to the SRB in the time frame required by the SRB for processing them.)
For those of you with assets in a TIAA Traditional account there is another reason for making sure that the DHE knows of your retirement date. Assets in TIAA Traditional accounts are not liquid, except in limited circumstances. You may recall having heard this before. If your TIAA Traditional assets are less than $5,000.00 total, they can be liquidated. If you are retiring before 1-1-17, your TIAA Traditional account can be liquidated.
Otherwise, the lack of liquidity means that in order to transfer those assets, e.g., with a TPA, you will encounter problems and obstacles. Some of you have already met up with difficulties.
If your retirement date precedes 1-1-17, you can liquidate the assets in a TIAA Traditional account, but if the DHE does not know your retirement date, TIAA will refuse to transfer assets in a Traditional account. That will cause you needless complications.
Please, if you intend to retire before 1-1-17, contact the DHE to see if they have you as “retiring soon.” If you are not identified as “retiring soon,” tell them your intended retirement date and request a Section 60 retirement application. Complete the application and send it back to the DHE at 11 Beacon Street. Do not send it to the SRB.
Please let me know if you have questions. I can be reached at firstname.lastname@example.org.
February 12, 2016:
Latest news from Donna Sirutis at MTA:
To Members in the Section 60 Process:
This may be redundant for most of you.
It is a reminder for some of you, and for some of you it will come as a surprise—you cannot use the money the employer contributed to your ORP account or the earnings on that money to purchase service when you transfer to the MSERS.
When you look at your ORP account statement, you should be able to identify which assets are based on your contributions, and which are based on the employer’s contributions. Only the assets based on your contributions can be used to pay for your ORP time in order to add that time to your MSERS creditable service.
And the Section 60 law does not permit you to keep the assets based on the employer’s contributions.
The employer’s contributions plus net investment gains and interest on those contributions will be paid to the Pension Reserve Fund according to Section 60.
I am sending this message because I still hear that some former ORP Participants are shocked to find this out.
Please email me if you have questions about this or about other aspects of Section 60.
I can be reached at email@example.com.