Present value calculator for MA State Employee Retirement System

MA SERS Pension Present Value Calculator

This present value calculator provides the present value of Massachusetts State Employee Retirement System pensions. Couples who are divorcing are often required to document the present value of their pensions in order to achieve a fair division of the couple’s financial assets. Present value calculations translate the predicted value of a future stream of pension payments into the equivalent lump sum cash value that they would have today.

This PV calculator accounts for both mortality (rates at which people survive each year and collect more pension benefits) and interest rates, making thousands of calculations in a split second. You can see a sample pension present value report by clicking here. The report produced by this site shows, year-by-year, how interest and mortality discounting interact with pension benefits and cost of living adjustments. Actuaries, financial planners, and accountants generally charge $175-$225 to provide a present value.

You do not need to calculate your projected, future benefits for your MA SERS pension. This calculator does it for you, using formulas drawn directly from the MA SERS website. You simply need to enter information about years of service, age, salary, and projected retirement date. The calculator is designed to be used for  division of assets in divorce, so you will also need to enter your marriage date and when you began (and perhaps ended) participation in the pension plan. The calculator will provide with you a “coverture ratio”–the proportion of your pension plan participation during which you were married–and will calculate the dollar amount of the total present value that is “marital”, i.e., the part of the present value that belongs to the marriage. Generally, the marital portion of the pension is considered to belong jointly to the pension participant and non-participant spouse.

This calculator  has the standard MA SERS cost-of-living-adjustment (“COLA”) built into it: 3% of the first $13,000 of your pension each year, starting in the July benefit payments after you have been retired for 1 full year. (If you retire June 31, you wait 1 full year for the first application of COLA; if you retire July 1, you wait 2 full years before you receive a COLA.)

This calculator works for individuals who entered the MA SERS BEFORE April 2, 2012.

If you are a member of a different pension system, you can use this present value calculator on the homepage of this site. It requires you to contact your pension administrator and  find out what your projected monthly or annual benefit would be with your years of service at a given retirement age. If you are a Massachusetts Teachers’ Retirement System (MTRS) member, you can download this calculator form to figure out your projected monthly benefit.

You must make one entry in the calculator that may be confusing. In #11), you must enter the number of years and months of creditable service that you have TODAY. Even though you will have entered a planned retirement date in the future (e.g., age 60, 62, 65, etc.) under #7), for #11) you must enter the years and months of creditable service you have RIGHT NOW. This is because the calculator determines a PRESENT value of the pension, based only on years of service you have earned until now. (This idea is difficult because we usually use these calculators to estimate our monthly benefits based on the number of years of service we will have in the future, at retirement, not the number of years we have TODAY, pre-retirement.)


The results provided by this calculator are calculations that depend on assumptions about future interest rates, cost of living adjustments, and life expectancies as well as the numbers you enter into this calculator. You should consult with a professional pension valuator or actuary to determine the present value of your pension for the purposes of dividing marital assets or other financial planning.
Disclaimer. Before filling out the form, check this box to indicate that you understand and agree with the above disclaimer.
This calculator provides estimates for Massachusetts SERS participants entering service BEFORE April 2, 2012.

9) Select a Group number 1, 2 or 4 Group 1 members are officials and general employees including clerical, administrative and technical workers, laborers, mechanics, and all others not otherwise classified.
 
Group 2 members include probation officers, court officers, certain correctional positions whose major duties require them to have the care, custody, instruction or supervision of prisoners, and certain positions who provide direct care, custody, instruction or supervision of persons with mental illness or developmental disabilities.
Group 4 members include certain public safety officers and officials, correction officers and certain other correction positions, and parole officers or parole supervisors.

10) Are you a military veteran?

 



Below is the information you have input and the corresponding monthly and annual pension benefit amounts. To make changes, simply scroll up and make changes, then press “Confirm my inputs” again.
Years of participation in pension:
Years of marriage during pension participation:
Projected age at retirement:
Mortality Table:
Predicted COLA:

Years of Creditable Service:
Allowable % of Salary Average:
Average Annual Salary:
Veteran Bonus:

Calculated monthly and annual pension benefits based on your inputs:

Monthly Pension Benefit Amount:
Annual Pension Benefit Amount:

To make any changes to what you have input, simply scroll up, make changes, and click the CONFIRM MY INPUTS button again.

Age Year Basic annual pension payment before any cost of living adjust (COLA), if any Cost of living adjustment (COLA), if any

Results
Present value of pension as of :
Marital portion of present value of pension:
Coverture ratio (percent of the pension participation time during which you were married):
Years of participation in pension:
Years of marriage during pension participation:
Projected age at retirement:
Mortality Table:
Predicted COLA:

Years of Creditable Service:
Allowable % of Salary Average:
Average Annual Salary:
Veteran Bonus:

Calculated monthly and annual pension benefits based on your inputs:

Monthly Pension Benefit Amount:
Annual Pension Benefit Amount:

Age Year during which Age starts Partial Year Gross Annual Benefit Dollar value of annual COLA in Gross Annual Benefit Interest discount rate Probability of Surviving each year Present Value of Annual Benefit