Instituted in 1937, The Needham Retirement System is a member of the Massachusetts Contributory Retirement Systems and is governed by Chapter 32 of the Massachusetts General Laws. The System, is overseen by a five member Board. The five members include two appointed by the Town, two elected by the members and retirees, and a fifth member chosen by the other four members with the approval of the Public Employee Retirement Administration Commission.
The Board is responsible to its members, the employees of the Town, for the investment of their retirement funds, to inform them of their rights to retirement benefits, and convey any changes in the law which may impact benefits. The Board joined the Pension Reserves Investment Trust in June 1985.
Membership in the plan is mandatory immediately upon commencement of employment for all permanent employees. The plan is a contributory defined benefit plan covering all town employees deemed eligible by the retirement board, with the exception of School Teachers. Needham Teachers are administered by the Teachers’ Retirement Board. Active members contribute either 5, 7, 8, or 9% of their regular compensation. This is determined by the date upon which the employee becomes a member of the System.
Members become vested after ten years of service. The System provides for retirement allowance benefits up to a maximum of 80% of a member’s highest three year average annual rate of regular compensation. Benefit payments are based upon a member’s age, length of creditable service, salary and group classification.
The maximum retirement allowance is funded 20% by the employee and 80% by the Town. The Town annually appropriates the amount determined by an independent actuarial study, which incorporates current and future pensions costs.