Human Resources & EO

Deferred State Retirement

Employees who are not at retirement age under the state rules when they leave state employment (must be age 55 or older), can with ten years of full service "defer" their retirement until they reach the minimum age of 55 or later.  Once the deferred retiree reaches age 55 they can then apply to receive their pension and can receive health and basic life insurance benefits at the "discounted" level.  Employees must keep their money in the retirement system until they retire and should at a minimum continue to carry basic life insurance while they are "deferred retirees" paying the full cost (which is minimal).

If the "deferred retiree" will not be receiving health coverage through another employer, they can retain their health and life insurance coverage through the Group Insurance Commission at full cost premium until they retire.  This coverage can continue until they retire, unlike COBRA which ends in 18 months.  Full cost is 2% less expensive than the COBRA rate per month.  Employees are required to retain the basic life insurance of $5,000 whenever they carry health insurance. They can also retain optional life insurance and the cost remains the same as the active employee rate per month.  Optional life insurance will increase in cost in five year age increments so the deferred retiree must decide whether they want to keep this or drop the optional and just retain the basic life insurance of $5,000. 

Deferred Retirees have two options under deferred retirement:

a) Keep basic life insurance paying 100% of the premium as a deferred retiree and receive health insurance elsewhere until retirement.  The Deferred Retiree could then resume GIC health coverage at retirement.  At retirement the Commonwealth will contribute the prevailing contribution percentage for retirees. This percentage is subject to change.
b) Keep basic life and health insurance paying 100% of the premium until retirement.  If a deferred retiree obtains health insurance through employment elsewhere, they must contact the Group Insurance to tell them they wish to stop their health insurance. Deferred retirees should remember to always retain their basic life insurance through the Commonwealth until they apply for retirement.  The purpose of retaining basic life insurance is that once a deferred retiree decides to retire and start retiree health insurance they will be considered to be "pre-qualified" for health insurance if they have retained the basic life insurance and they don’t have to wait for open enrollment to start their health insurance benefits.  Health insurance rates are subject to change every July 1st. 

For additional information on "deferred retirement" contact the State Retirement Board at 617.367.7770 and ask to speak to a retirement counselor.