Understanding Your UMass Memorial Health Care Pension 

The pension should not be viewed in isolation. Your retirement date, 401(k) or 403(b), Social Security, other savings, taxes, healthcare costs, and personal priorities all affect how the benefit fits into your broader plan.

Much of what follows comes from the plan’s own annual filing with the Department of Labor. The Form 5500 for the plan year ending September 30, 2025 includes the plan’s summary of provisions, prepared by the plan’s actuary. It is public, and it states in plain terms several things that benefits summaries tend to leave general.

Is the pension still open? Yes, with one important qualification

The plan’s actuary describes it as partially frozen. Partially frozen is not the same as closed, and the participant data shows why. As of the October 1, 2024 valuation, 9,506 employees were actively accruing benefits. Of those, 3,515 had between one and four years of credited service, which means employees hired within the last few years are still entering the plan. The active count rose over the following year.

Eligibility begins on the first day of the month after you complete a twelve-month, 1,000-hour year of service. Two groups sit outside the plan, and one of them involves a choice you may have made years ago without realizing how it affected pension eligibility.

What the pension provides

The UMass Memorial Health Care Pension Plan is a defined benefit plan funded by the employer. You do not contribute to it or choose its investments. Instead, the plan calculates your benefit using formulas based on factors such as your pay and years of service.

For participants in the main UMass group, the calculation has two parts, divided at the end of 2016.

For credited service before January 1, 2017, the monthly benefit is $3.60 plus 1.25% of average monthly earnings above $550, multiplied by years of credited service, counting up to 30 years. Average monthly earnings are the higher of your best five consecutive years or your final sixty months.

For service after December 31, 2016, each year adds 1.25% of that year’s monthly earnings. For SHARE-represented employees at the Medical Center, the amended plan description appended to the collective bargaining agreement credits the greater of $452 or 1.25% of that year’s pensionable earnings for each year worked after 2016. Your own provisions may differ.

You do not need to calculate the formula yourself. Your benefit estimate will show what the plan expects to pay based on your employment history and proposed retirement date. Understanding the formula is useful because it helps explain why an estimate changes when the assumptions change.

Vesting, and which rule applies to you

Vesting generally requires three years of vesting service, with a year being a plan year in which you complete at least 1,000 hours. The actuarial filing notes that a five-year requirement still applies to certain collectively bargained employees, and the plan’s audited financial statements record that participants represented by the National Association of Government Employees moved from five years to three effective March 1, 2018.

The hours requirement matters for part-time staff, per diem clinicians, and anyone who has moved between employment statuses. Three calendar years of employment and three vesting years are not necessarily the same measurement.

Start by confirming which provisions apply to you

Not every UMass Memorial employee participates in the same pension arrangement. The current plan includes different provisions for the main UMass group and for participants from legacy plans that were merged into it, including the former Marlborough Hospital Retirement Plan, which merged in effective December 1, 2019, and the former Clinton Hospital Pension Plan, which was frozen in 1996 and merged in at the end of 2009.

Your hire date, employing entity, service history, union representation, and past elections can therefore matter. Before making retirement decisions, request a current written estimate and the plan information that applies specifically to you. A coworker with a similar career may still have a different benefit.

When you start matters as much as how long you worked

Normal retirement age is 65. Benefits that begin earlier are reduced on a fixed schedule.

The lump sum follows its own reduction schedule rather than the annuity schedule. A lump sum taken at 60 is 85% of the amount payable at 65, at 55 it is 70%, and at 50 it is 55%. Because the two schedules differ, comparing an early annuity with an early lump sum requires looking at each form separately.

Working past 65 moves in the other direction. If you continue working and do not begin the annuity, the benefit is increased to reflect a shorter expected payment period, by roughly 2.1% at 66 and about 12.4% by age 70.

Turning the pension into retirement income

When you are ready to begin receiving the pension, several payment forms may be available. The default is a single life annuity if you are unmarried and a 50% joint and survivor annuity if you are married. Choosing anything other than the married default requires witnessed or notarized spousal consent.

Monthly payments can create a dependable source of income that continues throughout your life. Survivor options can continue a portion of that income to a spouse after your death. A lump sum gives you control over how the money is invested and withdrawn, and it also shifts responsibility for investment decisions, market risk, taxes, and making the money last to you. The better choice depends on your retirement expenses, health, other income, assets, risk tolerance, and the people or priorities you want the benefit to support.

How the lump sum is calculated

The lump sum payable at normal retirement age is the greater of two amounts. The first is a formula amount: $380 plus 11% of average annual earnings above $6,600, multiplied by credited service through 2016 and capped at 30 years, plus 11% of each year’s earnings after 2016. The second is the present value of your accrued benefit, calculated under the interest rate and mortality rules of Internal Revenue Code Section 417(e)(3).

That second calculation moves with interest rates, while the first does not. When rates rise, present values fall, which can change which of the two calculations governs and can change the lump sum from one year to the next without any change in your service or pay. That is one reason to request estimates at more than one prospective retirement date. During the plan year ending September 30, 2025, 194 participants received their benefit as a single sum.

Effective January 1, 2024, the plan’s automatic cashout threshold for small benefits rose from $5,000 to $7,000.

How the pension fits into your retirement plan

Retirement income often comes from several places. Your pension may cover part of your regular expenses, while Social Security and withdrawals from retirement accounts provide the rest. Looking at these sources together helps answer the larger question: when can you retire with the income and flexibility you need?

Begin with the expenses you expect to have in retirement. Then compare them with the income available from your pension and Social Security. Your 401(k), 403(b), IRAs, and other savings can be used to fill the remaining gap, fund larger expenses, and provide flexibility when your needs change.

The plan’s summary of provisions lists no cost-of-living adjustment. If that applies to your benefit, the monthly payment would not automatically rise with inflation, making the role of your retirement savings particularly important over a long retirement.

Coordinating the pension with your workplace savings

Depending on your employing entity and eligibility, you may also have access to the UMass Memorial 401(k), 403(b), or both. The 401(k) includes an employer match for many employees, making the contribution rate an important part of retirement planning. For SHARE-represented employees, the match is 50 cents on each dollar contributed, up to the first 4% of pay. Confirm the match that applies to your position, and remember that a different, enhanced match replaces pension participation for employees who elected it.

Your savings accounts serve a different purpose from the pension. You control how much you contribute, whether contributions are pre-tax or Roth when available, and how the money is invested. These accounts can provide growth, liquidity, inflation protection, and assets that may remain for beneficiaries.

Some employee groups may also have access to a 457(b) deferred compensation plan. Availability varies across the workforce, so confirm the plans offered for your position before building them into your retirement strategy.

For how the 401(k) and 403(b) work alongside each other, including the single deferral limit that applies across both plans and the catch-up provisions available to long-tenured hospital employees, see our companion guide to UMass Memorial retirement benefits.

Coordinating the pension with Social Security

The date you begin Social Security can significantly affect your retirement income. You may claim as early as age 62, but claiming before full retirement age reduces the monthly benefit, while delaying beyond full retirement age increases it until age 70.

Your pension may give you more flexibility in choosing when to claim. Pension income and planned withdrawals from savings could help support the first years of retirement while you delay Social Security. In other situations, beginning Social Security earlier may reduce the amount you need to withdraw from investments.

The goal is not simply to maximize one benefit. It is to coordinate pension, Social Security, and investment withdrawals around spending needs, taxes, and the amount of reliable income you want throughout retirement.

Accounting for taxes and healthcare

Pension income is generally taxable for federal purposes, and Massachusetts taxes income from most private pensions. The timing and form of your pension can therefore affect your taxable income, along with Social Security and retirement account withdrawals.

If you choose an eligible lump sum, a direct rollover to an IRA or another eligible retirement account generally allows you to defer taxation until withdrawals begin. A lump sum paid directly to you is generally subject to mandatory federal withholding of 20%.

Healthcare also belongs in the calculation, particularly if you plan to retire before becoming eligible for Medicare. Premiums, deductibles, and out-of-pocket costs can materially change the amount of income you need during the first years of retirement.

A note on the plan’s financial condition

For the plan year ending September 30, 2025, the plan reported approximately $1.29 billion in net assets available for benefits, a funding target attainment percentage of 83.45%, and an employer contribution of $43.2 million during the year. The plan is covered by Pension Benefit Guaranty Corporation insurance, and the filing records that no resolution to terminate the plan has been adopted.

Those figures describe one measurement date under assumptions prescribed by law. Funding percentages can change as interest rates, contributions, and other assumptions change. They provide context rather than a prediction, and no single year’s figure determines an individual’s benefit.

What to gather before making a decision

Start with a written pension estimate showing the monthly and lump-sum options available to you. Ask for estimates at the retirement dates you are considering, along with the current plan description that applies to your employment group.

Bring that information together with:

• Your most recent 401(k), 403(b), 457(b), and IRA statements
• Your Social Security estimate
• Your expected retirement expenses
• Information about other income and assets
• Your anticipated healthcare costs
• Your beneficiary and estate-planning priorities

Together, these details provide a clearer picture than any pension election viewed by itself.

Finivi Inc. is a registered investment adviser. Finivi Inc. is not affiliated with, endorsed by, or sponsored by UMass Memorial Health Care, Inc., UMass Chan Medical School, the University of Massachusetts, or any affiliated entity. UMass Memorial is named here only to identify a group of employees the firm serves. This article is provided for educational purposes and is not individualized investment, tax, or legal advice. Pension provisions can vary by employing entity, legacy group, hire date, union representation, and employment history. The plan provisions, formulas, reduction schedules, participant counts, and financial figures cited here are drawn from the plan’s Form 5500 and its attached actuarial and audited financial statements for the plan year ending September 30, 2025, and from the SHARE collective bargaining agreement and the amended summary plan description appended to it, which govern SHARE-represented employees at UMass Memorial Medical Center. Employees who are not represented by SHARE, and employees of other UMass Memorial entities, may be subject to different provisions and should not rely on these figures. Plan provisions are amended from time to time, and figures reflect the most recent filing available as of publication. The official plan documents that apply to your own employment govern in all cases. Request your individual benefit information from UMass Memorial and consult appropriate tax or legal professionals regarding your circumstances.