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Audit Shows 25 Percent of Newly Retired Massachusetts Educators Received Delayed Retirement Benefit Payments 

BostonIn an audit released today, the Office of State Auditor Suzanne M. Bump (OSA) found that nearly 25 percent of newly retired educators did not receive their first monthly benefit payments from the Massachusetts Teachers’ Retirement System (MTRS) within the mandated timeframe. The audit, which examined the period July 1, 2017 through June 30, 2019, notes these delays may have resulted in financial hardship for retirees. MTRS is the largest of the Commonwealth’s 104 contributory retirement systems and provides retirement, disability and survivor benefits to Massachusetts teachers, administrators and their families.

A similar audit released by the OSA in January 2021 found that 97 percent of all new retirees did not receive their first payments from the Massachusetts State Retirement Board within the mandated timeframe.

Under Massachusetts state law, MTRS must distribute initial benefit payments within 62 days of the employee’s retirement date. For the 4,907 retirements included in the audit analysis, processing times ranged from 1 day to 1,064 days, with the average being 55 days. The audit notes that MTRS more frequently experiences delays in issuing first benefit payments when applications are received 60 days or less before the proposed retirement date. To streamline the process, the audit recommends MTRS consider redeploying existing resources toward processing retirement applications received within this timeframe.  

“Eliminating the delays in issuance of retirement benefits requires action by both applicants and the MTRS. Members need to be encouraged to apply for their benefits sooner, and MTRS needs to dedicate more existing resources to processing applications received on short notice,” said Auditor Bump.

MTRS agreed that 25 percent of initial payments were delayed and also indicated that delays in processing are sometimes caused by retirees or employing school districts submitting inaccurate or incomplete retirement information. Additionally, the audit revealed that MTRS paid a total of approximately $1,470 in monthly benefit payments (approximately $40 per month) under an invalid social security number (SSN) to an individual. MTRS reported the invalid SSN to the Department of the Treasury’s Internal Revenue Service (IRS) for tax purposes. MTRS indicated that it had corrected the member’s SSN and issued corrected tax forms to both the member and the IRS.

The audit does note that MTRS has been properly ensuring that adjustments are made to monthly benefit payments, as a result of changes to wage and service time, and that beneficiaries’ benefit payments are adjusted or terminated accurately after a related retiree passes away.

MTRS is administered by the Massachusetts Teachers’ Retirement Board, and it is overseen and regulated by the Public Employee Retirement Administration Commission. The Board is comprised of seven members, one of which is the Auditor of the Commonwealth of Massachusetts or her designee. In fiscal year 2019, MTRS issued more than $3 billion in benefit payments to more than 67,000 retirees and survivors.

The full audit report is available here.