Deferred Compensation Plan For Government Employees In Massachusetts
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If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
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FAQ
OBRA or the Omnibus Budget Reconciliation Act of 1990 is a Massachusetts state mandated employee-funded 457 deferred compensation plan for part-time, seasonal, and/or short-term public employees.
The Risks Of Deferred Compensation Plans The biggest downside to most of these plans is the risk of the company declaring bankruptcy. It is surprising that most, if not all, of these plans aren't in a trust that cannot be touched by creditors.
You may voluntarily defer additional income into the 457(b) plan/MA SMART Plan through Empower Retirement up to the IRS limit of $23,500 if you are under 50 years of age, or $31,000 if you are 50 years or older. New for calendar year 2025, if you are aged 60-63, your limit is $34,750.
Certain government pensions, however, are exempt under Massachusetts law. In general, exempt pensions include contributory pensions from the U.S. Government or the Commonwealth of Massachusetts and its political subdivisions, and noncontributory military pensions.
My withdrawal may be subject to fees and/or loss of interest based upon my investment options, my length of time in the Plan and other possible considerations. If I have not been advised of the fees and risks associated with my withdrawal, I may contact Service Provider for a withdrawal quote at 1-877-457-1900.
OBRA is the mandatory employee-funded defined contribution plan for part-time, seasonal, and short-term public employees—this includes many DCE unit members.
Distributions made to you from a federal employee contributory plan are excluded from Massachusetts gross income. For federal purposes, any amount of distribution representing previously taxed contributions is excluded. However, distributions above previously taxed contributions are included in federal gross income.
