Clarifying the state’s retirement plan


To the Editor: 

After reading a recent Letter to the Editor (“Corruption in retirement plan for public employees,” Feb. 8), it appears there is some confusion about the Massachusetts SMART Plan that I would like to clear up. The Massachusetts Employees Defined Contribution SMART Plan (SMART Plan) is a 457(b) plan available to all state and municipal employees that assists participants in preparing for retirement. 

Participation in the SMART Plan is mandatory for part-time or seasonal (generally otherwise unbenefited) employees. This mandatory component of the plan is administered in compliance with the federal Omnibus Budget Reconciliation Act of 1990 (OBRA), which requires all employers to ensure their employees are saving for retirement. Because state and municipal government employees are not eligible for Social Security, governmental employers are required to facilitate an alternative retirement system to satisfy the OBRA requirements. Simply stated, this mandatory portion of the SMART Plan is offered to participating municipalities to satisfy that federal requirement. 

The OBRA SMART Plan is low-cost, and gives participants various investment options, the default of which is conservative, diversified, and provides a reasonable rate of return. The plan is administered with great care and diligence on behalf of our participants to protect their assets, as required by law. 


David Lynch, executive director
Massachusetts Deferred Contribution Plans
Office of the State Treasurer and Receiver General