What happens if I get a retroactive payment?

It is fairly common for members who are already retired to receive a retroactive payment for a period that they were previously working.  This usually happens when a union settles a contract, which results in a payment to all members of that union who were employed after a certain date.  Members who are getting close to retirement often express concern about “missing out” on this increased pay if they retire before their contract is settled.  Luckily, these types of payments can still be included in a retirement calculation even if a member has already retired.

Typically, once a contract is settled, retroactive pay will be issued to affected employees within a few weeks.  Retired employees will have a check mailed to them.  Ideally, this pay would have a retirement deduction withheld in advance.  However, in cases where the payroll office is unable to do this, we may require that employees write a check to the Cambridge Retirement System for the amount that should have been withheld.  Once we have received deductions, our office will recalculate your allowance, including the additional pay.  We can usually complete the process within 1-2 months and then you will see your monthly allowance increase.

Keep in mind that we are only able to include pay from within a 3-year window.  A person retiring on July 1, 2018 would usually have their retirement allowance based on pay between July 1, 2015 and June 30, 2018.  If that person subsequently received a retroactive pay that covered a period between 2014 and 2018, a certain amount of the payment would have to be excluded from the calculation.