Audit of the Public Employee Retirement Administration Commission (June 22, 2023)

This is a state performance audit of the Public Employee Retirement Administration Commission, known as PERAC, covering July 1, 2019 through June 30, 2021.

“In accordance with Section 12 of Chapter 11 of the Massachusetts General Laws, the Office of the State Auditor has conducted a performance audit of the Public Employee Retirement Administration Commission (PERAC) for the period July 1, 2019 through June 30, 2021.”

The audit looked at whether PERAC approved disability retirement applications on time and correctly calculated benefits for retirees who earned more than allowed.

“In this performance audit, we determined whether PERAC approved members’ applications for accidental and ordinary disability retirement1 within 30 days in accordance with Section 21(1)(d) of Chapter 32 of the General Laws.”

PERAC oversees Massachusetts public retirement boards and helps make sure public pension systems are run fairly, legally, and ethically.

“According to PERAC’s website, its “mission is to provide regulatory oversight and guidance for the effective, equitable, and ethical operation of the Commonwealth of Massachusetts’ public pension systems.””

If you are a public employee, retiree, taxpayer, or family member, this audit gives some assurance that the sampled disability retirement decisions and excess-earner benefit calculations were handled properly.

“Below is a list of our audit objectives, indicating each question we intended our audit to answer and the conclusion we reached regarding each objective.”

For the areas tested, PERAC met the audit’s requirements: applications were approved within the required timeframe, and excess-earner benefit amounts were calculated correctly.

“Does PERAC calculate the correct amount of retirement benefits for excess earners in accordance with Section 91A of Chapter 32 of the General Laws?”

The report does not identify significant noncompliance requiring public reporting, so it does not present corrective findings or recommendations.

“Our audit revealed no significant instances of noncompliance by PERAC that must be reported under generally accepted government auditing standards.”

The audit matters because PERAC oversees 104 public retirement boards across Massachusetts, so its work affects public pension oversight statewide.

“The Public Employee Retirement Administration Commission (PERAC) was established by Chapter 306 of the Acts of 1996 to oversee and regulate the 104 public retirement boards in the Commonwealth of Massachusetts.”

Disability retirement means a public employee retires because of an injury or illness; accidental disability is work-related, while ordinary disability is not work-related.

“Accidental disability retirement is when an employee retires because of an injury or illness they sustained at work while performing their job duties.”