30-Plus 2 percent deduction calculation MTRS is expecting

Owned by Knowledge Assistant
Last updated: Oct 01, 2024
Description of Issue

How does MTRS require the 2% over 30k deduction to be calculated?

Context
  • Payroll
  • Massachusetts
  • MA Retirement
  • 2% over 30k
Cause

Informational

Resolution

From https://mtrs.state.ma.us/service/contribution-rates-explained/ - 


Employees who establish membership on or after 1/1/1979 and who are not participating in RetirementPlus contribute an additional 2% on all earnings over $30,000. This deduction is also known as the 30-plus deduction.

30-plus deductions are calculated on a pay period basis by taking all regular compensation on a pay date, subtracting the 30-plus exemption amount based on the member’s pay schedule (see table below) and then multiplying the result by two percent. (Note: Members who coach at a school district other than the one in which they qualify as a teacher, are required to make 30-plus contributions on all coaching pay in their secondary district if they earn more than $30,000 annually with their primary employer.)

The 30-plus (2%) deduction calculation formula
Regular compensation for pay period – 2% exemption amount = Earnings subject to 2% deduction

Earnings subject to 2% deduction x 2% = Amount due for 2% deduction

For example, Mary earns a base salary of $52,000 per year, and this year is also receiving a longevity payment of $2,000; she is paid in 26 bi-weekly payments. On this particular pay date, she is receiving her normal bi-weekly pay as well as the full $2,000 longevity payment, making her total compensation amount $4,000. Using the exemption amount for a 26 bi-weekly pay schedule (listed in the following section) the amount due for Mary’s 2% deductions would be $56.92, as shown below.

$4,000.00 – $1,153.85 = $2,846.15

$2,846.15 x 2% = $56.92

30-plus (2%) deductions exemption amounts, per pay date, by common pay schedules
Weekly
52 pays (12 months or LS)             $576.92
42 pays (10 months)                       $714.29

Bi-weekly
26 pays (12 months or LS)             $1,153.85
22 pays (10 months)                       $1,363.64
21 pays (10 months)                       $1,428.57

Semi-monthly
24 pays (12 months or LS)             $1,250.00
20 pays (10 months)                       $1,500.00

For additional information on the 30-plus deduction and how to calculate it, see PERAC’s Memo #43 of 1999.

Additional Information

How to set up the 30-plus 2 percent retirement deduction for MA