Regular Compensation

Regular compensation is the amount of earnings upon which a member pays retirement contributions. Regular compensation will be used in determining a member’s final average salary, which is one of the factors used in calculating a retirement allowance.  Compensation must comply with statutory and regulatory requirements in order to be pensionable.  For a full description of “regular compensation” as defined by the Massachusetts General Laws, please see 840 CMR 15.03 .

Regular compensation generally includes:

  • the annual rate of compensation in a member’s salary schedule,
  • educational incentives,
  • longevity payments made for length of service,
  • premiums for holidays and shift differentials for police and fire,
  • payments for rendering instructional training,
  • hazmat pay for police and fire,
  • on call or standby pay,

Regular compensation generally excludes:

  • amounts paid for hours worked beyond the member’s normal work schedule (i.e., overtime),
  • amounts paid as bonuses other than cost-of-living bonuses,
  • payments which will not recur, and payments which will recur for only a limited or definite term (i.e., salary augmentation plan),
  • amounts paid for unused vacation, sick leave, or other leave,
  • severance pay,
  • amounts paid as early retirement incentives,
  • any payments made as a result of giving notice of retirement,
  • amounts paid for housing and lodging,
  • amounts paid for travel,
  • amounts paid for clothing, uniform, tool allowances,
  • amounts paid for annuities,
  • amounts paid for expense payments,
  • amounts paid for automobile usage,
  • amounts paid for insurance premiums or for not participating in the employer’s health insurance plan.

 

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