MBTA Pension Benefit Calculator, Group A Plan and Group B Plan

This free MBTA pension benefit calculator gives you an estimate of your MBTA pension retirement benefits (including the effects of inflation on your benefit over time). It is based on the information you input about your high-3 years average salary, years of service, and retirement age. It works for both Group A Plan members and Group B Plan members. It also takes into account whether you joined the retirement plan before December 6, 2012 or on or after December 6, 2012. It is the only online calculator for the Massachusetts Bay Transit Authority pension.

This MBTA pension calculator does not require you to understand the contract language or formulas or to do any math. Simply scroll to the bottom of this page, check three boxes and give  your birthdate, date of retirement, years of service, and high 3 years of salary.

How Are MBTA Pension Benefits Calculated?

The ways in which your MBTA pension benefits are calculated depend on whether you are a member of Group Plan A or Group Plan B, and whether you were hired before, or on or after, December 6, 2012. Your eligibility also depends on your age and, in some cases, your years of service. The formulas for making these calculations are laid out, in a confusing way, in the 2023 MBTA contract. The MBTA Retirement Fund attempts to summarize the new features of this  agreement in this overview of 2023 pension pension agreement.

A key new feature of the agreement was the creation of a Group Plan B. The Group B Plan, unlike Group A, does not have any possibility of pension benefits until a participant reaches age 55, and for retirement before age 61, it sharply reduces benefits. This document gives an MBTARF summary of the differences between the Group A and Group B plans.

Normal Retirement Allowance Group A

If you are a member of Group A and at least 65 years old, then your annual pension benefit is calculated by multiplying three numbers together: your number of years of service times 2.46% times the average of your high three years of salary.

If you are a member of Group A, hired prior to December 6, 2012, AND have at least 23 years of service, your retirement is calculated in the same way as if you were 65 or older.

If you are a member of Group A, hired on or after December 6, 2012, are between the ages of 55 and 65, AND have at least 25 years of service, then your pension is also calculated as if you were 65 or older.

Early Reduced Retirement Allowance Group A

If you do not meet the conditions above for a “Normal Retirement Allowance”, you might still qualify for a “Early Reduced Retirement Allowance” if you are between 55 and 65 and have enough years of service.

Specifically, if you are a member of Group A, hired prior to December 6, 2012, have between 20 and 23 years of service, and are between ages 55 and 65, your retirement is calculated by calculating a Normal Retirement Allowance and then reducing the allowance by one-half percent for each month you are short of your 65th birthday. For example, if you were 64 when you retired, you would be 12 months  short of 65, so you would multiply 12 times .5%, resulting in a reduction of 6% from a Normal Retirement Allowance.

If you are a member of Group A, hired on or after December 6, 2012, have between 20 and 25 years of service, and are between ages 55 and 65, your retirement is calculated by calculating a Normal Retirement Allowance and then reducing the allowance by one-half percent for each month you are short of your 65th birthday.

Group B Retirement Allowance

To receive Group B retirement benefits, you must have completed at least 10 years of service and reached at least age 55. The annual benefit is calculated by multiplying three numbers together: a) your years of service, b) your high-3 average salary, and c) a percentage from the chart below.

As you can see, if you retire at age 61 or later, the percentage multiplier is the same as the multiplier for Group A so your benefit would be the same as if you were in Group A. For each year younger than 61 that you retire, your benefit is significantly reduced. The introduction of Group B encourages participants to retire at later ages, which lessens the longterm obligations of the plan to MBTA.

Despite this reform, outside experts generally see the MBTA Retirement Fund as badly underfunded. It has made contractual pension benefit promises to workers that it will not have enough money to pay.

MBTA Pensions in Massachusetts Divorce

There are two ways to divide your MBTA pension in divorce. 1) You can buy out your ex-spouse (so you keep your entire pension) by letting them keep something equally valuable, such as house equity and other retirement accounts.  Or 2) you can divide future benefit payments between yourself and your ex-spouse, based on the percentage of the pension that was earned during marriage. You can find a complete guide to dividing pensions in divorce here.

Because MBTA members hired before December 6, 2012 are able to retire at any age, as long as they have 20 years of service, they can retire relatively young, e.g. in their 40’s. This means that the present values of their pensions can easily exceed $1,000,000, even if the amount of the benefit is not very high.

Attorney Rueschemeyer mediates divorces, including MBTA pension division, for ALL Massachusetts counties and courts. To see how marital property is divided in divorce, see this marital property division page.

If you need to divide your MBTA pension in a divorce, Attorney Rueschemeyer can draft the required DRO (Domestic Relations Order). Finally, you can see how much your pension is worth today as a lump sum, by doing a present value calculation.

Note that MBTA pensions, unlike other public pensions in Massachusetts, are NOT governed by MA General Law Chapter 32. You can compare pension calculations for MTRS, MA State Retirement Board pensions (SERS),  MA State Police Group 3 pensions on this site. You can find further information about the MBTA Retirement Fund on their website.

How Inflation Will Affect the Value of Your Annual MBTA Pension Benefit Over Time

You may find this inflation calculator valuable for financial planning because it includes calculations showing the value of your projected MTBA pension in today’s dollars for each year until you reach age 100. Unlike other MA public pensions such as SERS and MTRS, the MTBA pension does not have any annual COLA, or cost of living adjustment. While none of the MA pensions (unlike Social Security) have big enough COLAs to keep up with inflation, the MBTA pension has no COLA and so will lose significant value over time because of inflation.

Take the example of a retiring 50-year-old with 23 years of service and a high 3-year salary average of $100,000. The retirement benefit will be 23*.0246*$100,000=$56,580. At age 60, a 3% inflation rate will have reduced the value (purchasing power) of that pension to $42,100. By age 70 that annual payment will only be worth $31,327. At age 80 the annual benefit will only purchase the equivalent of $23,310 in today’s dollars.

You can do your own calculations below and download your own .pdf report showing the year-by-year effects of inflation on your future annual pension benefits. You can change the projected inflation rate, which is set at 2.99 by default.