Permits municipalities the local option of providing a tax exemption to National Guard members and reservists

2025 Regular Session Introduced by Jake Ashby and 2 co-sponsors

The bill lets a member nominate beneficiaries for Option (d) survivor benefits, with shares based on the youngest beneficiary and divided among survivors after a beneficiary dies.

REFERRED TO VETERANS, HOMELAND SECURITY AND MILITARY AFFAIRS

Summary — S.1868 (An Act relative to Option (d) beneficiaries)

Status & Procedural Notes
- Bill title: An Act relative to Option (d) beneficiaries
- Senate Docket No.: 1205; Filed 01/15/2025; Presented by Sen. Cindy F. Friedman
- Introduced / read twice in the Senate: 05/22/2025; referred to Committee on Veterans, Homeland Security and Military Affairs (hearing scheduled 06/25/2025, 1:00–5:00 PM in A‑1).
- This bill would amend Section 12 of Chapter 32 of the Massachusetts General Laws (public employee retirement).

Purpose / Intent
- To revise the rules governing the “Option (d) — Member Survivor Allowance” so that a member of the public retirement system may nominate one or more eligible beneficiaries to receive a portion of the Option (c) survivor allowance if the member dies before retirement, and to clarify how benefits are calculated and redistributed after the death of a beneficiary.

Key Provisions
- Replaces an existing paragraph in Section 12, Chapter 32 with a new Option (d) paragraph that:
- Allows a member, by written notice on a prescribed form filed with the pension board prior to the member’s death, to nominate one or more eligible beneficiaries (as defined under Option (c)).
- Permits the member to specify on that form the portion each nominated beneficiary is to receive of the yearly amount of the Option (c) allowance that the member would have been entitled to had the member retired on the date of death.
- Provides that if multiple beneficiaries are nominated, the survivor benefit payable will be calculated using the youngest beneficiary’s age at the time of the member’s death (i.e., the actuarial reduction or factor is based on the youngest beneficiary’s age).
- States that upon the death of a beneficiary, that beneficiary’s allocated portion is divided evenly among the surviving beneficiaries.

Who is affected
- Active and future members of the Massachusetts public employee retirement systems governed by Chapter 32 who elect or later modify Option (d) nominations.
- Individuals named as Option (d) beneficiaries (spouses, dependents, other eligible beneficiaries under Option (c)).
- Retirement boards and employers (municipalities, state agencies) administering Chapter 32 pensions may experience administrative and actuarial impacts.

Potential impact / considerations
- Actuarial cost: Calculating the survivor benefit using the youngest beneficiary’s age may increase the survivor allowance (younger ages usually produce larger actuarially reduced survivor payments), likely increasing pension liabilities and employer contribution requirements over time.
- Redistribution rule (dividing a deceased beneficiary’s share among survivors) avoids reversion to estate but may alter long‑term payout patterns; administrative rules/forms will need updating.
- Fiscal effects would depend on uptake by members, ages of nominated beneficiaries, and actuarial factors; a fiscal note from the relevant retirement boards or the state’s actuary would quantify impacts.

Related / Background
- The bill text notes similar/related matters filed in prior sessions (e.g., Senate No. 1679 of 2023–2024). A companion bill is listed as A 515.