Friday, December 6, 2019

Ready to Retire

Are you ready to retire? Congratulations! You've reached that long-awaited milestone, and now it's time to reap the rewards of your many years of service.

How you apply for benefits in retirement depends on which MERS plan you have. If you're not sure what MERS Plan you have, click here for help.

I'd like retirement information about: Defined Benefit Plan  •  Defined Contribution Plan  •  Hybrid Plan  •  Health Care Savings Program  •  457 Program •  IRA

 

 

Defined Benefit Plan

You can begin receiving retirement benefits when you reach the age and service requirements under your plan provisions. If you are vested, the standard retirement age is 60.

When you meet the age and service requirements, you're ready to start the retirement process.

Here's how to get started:

  1. Apply for retirement.
    It’s important to apply within 45-90 days of your anticipated retirement date. Apply online through your myMERS account, by selecting your MERS Defined Benefit Plan and clicking the "Apply for Retirement" button.

    As part of the application process, you choose one of three methods of payment that works for you. Please select your payment option carefully. Once your first payment has been issued, you won’t be able to change your selection.
    • Straight Life — the highest monthly benefit paid for your lifetime, with no monthly survivor benefits
    • Life with 100%, 75%, or 50% to Survivor — provides a reduced monthly benefit to you for your lifetime, with the chosen percentage paid to one beneficiary for their lifetime if you die before they do
    • Life with 20, 15, 10, or 5 Years Certain — provides a reduced monthly benefit to you for your lifetime. If you die before the chosen period certain ends, your beneficiary(ies) will receive your monthly payment until the period certain ends

You can use the “Benefit Calculator” in your myMERS account to estimate how each of these payment options will affect your monthly benefit.

  1. Processing.
    This may take up to 6 weeks to review your file and make necessary calculations.
  2. Personalized Information.
    MERS will send a personalized calculation of your expected benefits with a letter confirming your retirement elections.
  3. Your Payment.
    Your retirement date will be the first day of the month following your termination date, or the first day of the month following MERS' receipt of your retirement application, whichever is later. Payments are issued electronically on the 18th of each month, unless it falls on a weekend or holiday, in which case the payment will be issued the business day prior.

Questions

Our Defined Benefit Retirement Guide (pdf) includes with detailed information about the process of retiring with MERS Defined Benefit Plan and other useful tips. If you have any questions contact our Service Center.

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Defined Contribution Plan

Whether you’re changing jobs or ready to retire, you have many choices for what to do with your Defined Contribution account.  

  • You can keep your account with MERS! By keeping your money in the MERS Defined Contribution Plan, you’ll continue to receive MERS excellent customer service throughout your retirement.
  • You can take advantage of our low administrative fees and easy-to-understand investment options by rolling funds from other qualified and/or pre-tax retirement accounts into your existing Defined Contribution Account. Our straightforward investment menu features low cost funds that keep more of your hard-earned money in your account. Rolling in your money from outside retirement accounts multiplies these benefits!
    As a MERS participant, you can also open a MERS Traditional IRA or Roth IRA which allows you to roll over post-tax funds. MERS IRAs use the same easy-to-understand investment menu as your Defined Contribution plan.
    Our Rollover Guide (pdf) provides a quick summary of which account types can be rolled into your Defined Contribution Plan and which types you’ll want to roll into a MERS IRA.
  • You can begin using your account after separating from your employer, but there may be penalties for doing so. If you leave your employer before January 1 of the year you turn 55 (age 50 for public safety employees), you must wait until age 59 1/2, to take withdrawals without penalty. You can withdraw money in periodic payments, substantially equal payments, an amount certain, a period certain, and/or a lump sum. Withdrawals are taxable in the calendar year you receive the money. Federal and state income taxes will be withheld as required by law, although in certain instances you may opt out of state income tax withholding. We encourage you to contact your financial advisor for more information.
     
    Withdrawal requests can be submitted online through your myMERS account. To do so, log into your myMERS account and select your Defined Contribution Plan. Click on the “Distributions” link in the left-hand navigation to make your request. All distributions requested online will be in the form of a check mailed to the address you have on file with MERS.

    Certain distribution requests require a Medallion Signature Guarantee, and therefore must be submitted via paper form. A Medallion Signature Guarantee is required for any transaction:
    • Over $100,000
    • Requiring a wire transfer or direct deposit
    • Being sent to a destination outside the United States
    • Being sent to an address other than the address of record on the account
     
    Distribution requests that require a Medallion Signature Guarantee cannot be accepted via e-mail, online or fax. You can download the Defined Contribution Distribution/Direct Rollover Form from the “Resource Library” in your myMERS account or call MERS Service Center to request one.
     
    Note: A Medallion Signature Guarantee is not the same as a notary stamp.
    A Medallion Signature Guarantee can be obtained at most banks and credit unions. This guarantee authenticates the validity of the request and protects you by making it harder for people to take your money by forging your signature. Please consult with your Medallion signature provider regarding possible additional fees.
    For more information on Medallion signature guarantees, click here.

Questions

If you have any questions, please consult your Defined Contribution Participant Handbook (pdf) or contact our Service Center.

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Hybrid Plan

The MERS Hybrid Plan is made up of two parts:

  • Hybrid Part I – Defined Benefit Plan
  • Hybrid Part II – Defined Contribution Plan

When you meet the age and service requirements under your plan provisions, you're ready to start the retirement process.

Learn more about applying for retirement under your Hybrid Part I – Defined Benefit Plan.
Learn more about using your Hybrid Part II – Defined Contribution Plan.

Questions

For more information, consult the MERS Hybrid Plan Handbook (pdf) or contact our Service Center.

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Health Care Savings Program

Once you separate from your employer (either at retirement or otherwise), you can begin to use your Health Care Savings Program account to pay for qualified medical expenses.
 
Once your employer notifies MERS of your eligibility, $1,000 will be transferred from your current investment allocation into the Alerus Money Market Fund. This ensures you will have sufficient funds available to spend. No additional assets will transfer into this fund, and your overall account balance will always be reported to you including this amount. You can continue to invest any assets over the $1,000 in any of the options on the MERS Health Care Savings Program Investment Menu. Assets in your account are paid out until your account reaches a zero balance.
 
Using Your Account
You can access funds in your Health Care Savings Program Account in a variety of ways:

  • Health Benefits Card - Following verification of your eligibility to begin using your account, you will receive two MERS/Alerus Heath Benefits Visa® cards. These cards can be used at participating vendors to automatically debit your account when making qualified medical expense purchases.
  • Bill Payment Direct to Provider - You can request that a payment be made directly to your provider through the Expense Tracker section of the Claims Management site.
  • Out-of-Pocket Reimbursement - You can also request reimbursement for qualified medical expenses that you pay for out-of-pocket. Reimbursement requests can be made online either through the "Claims Management" link within your myMERS account or through the Alerus Health Benefits app on your mobile device. If you prefer to submit a reimbursement request by mail, you can find the Reimbursement Claim Form in the “Resource Library” in your myMERS account, or you can call MERS Service Center to request one.
Private Health Care Exchange
Did you know that money in your Health Care Savings Program Account can be used to pay for health care insurance premiums? As a pre-65 or Medicare-eligible MERS retiree, you have access to a private health care exchange — Mercer Marketplace 365 — to support you in choosing a health care plan that best meets your needs. They offer a comprehensive menu of individual insurance plans in Michigan and across the country, providing you with the comfort and familiarity of well-known national insurance carriers as well as strong local plans with a variety of options.

Questions

For more information, consult the MERS Health Care Savings Program Participant Handbook (pdf) or contact our Service Center.

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457 Program

Whether you’re changing jobs or ready to retire, you have many choices for what to do with your MERS 457 Program account.  

  • You can keep your account with MERS! By keeping your money in MERS 457 Program, you’ll continue to receive MERS excellent customer service throughout your retirement.
  • You can take advantage of our low administrative fees and easy-to-understand investment options by rolling funds from other retirement qualified, pre-tax and/or Roth accounts into your existing 457 Program account. Our straightforward investment menu features low cost funds that keep more of your hard-earned money in your account. Rolling in your money from outside retirement accounts multiplies these benefits!
    • Download the 457 Program Incoming Rollover Form

    As a MERS participant, you can also open a MERS Traditional IRA or Roth IRA which allows you to roll over an even wider variety of post-tax funds. MERS IRAs use the same easy-to-understand investment menu as your Defined Contribution plan.

    Our Rollover Guide provides a quick summary of which account types can be rolled into your 457 Program and which types you’ll want to roll into a MERS IRA.
  • You can begin using your account after you leave employment. You can withdraw money in periodic payments, substantially equal payments, an amount certain, a period certain, and/or a lump sum. Withdrawals of pre-tax amounts are taxable in the calendar year you receive the money. Federal and state income taxes will be withheld as required by law, although in certain instances you may opt out of state income tax withholding. For Roth contributions or rollovers, withdrawals and associated earnings are tax-free, as long as the requirements for a “qualified distribution” are met. We encourage you to contact your financial advisor for more information.
     
    Withdrawal requests can be submitted online through your myMERS account. To do so, log into your myMERS account and select your Defined Contribution Plan. Click on the “Distributions” link in the left-hand navigation to make your request. All distributions requested online will be in the form of a check mailed to the address you have on file with MERS.
     
    Certain distribution requests require a Medallion Signature Guarantee, and therefore must be submitted via paper form. A Medallion Signature Guarantee is required for any transaction:
    • Over $100,000
    • Requiring a wire transfer or direct deposit
    • Being sent to a destination outside the United States
    • Being sent to an address other than the address of record on the account
    Distribution requests that require a Medallion Signature Guarantee cannot be accepted via e-mail, online or fax. You can download the 457 Distribution/Direct Rollover Form from the “Resource Library” in your myMERS account or call MERS Service Center to request one.

    Note:
    A Medallion Signature Guarantee is not the same as a notary stamp.
    A Medallion Signature Guarantee can be obtained at most banks and credit unions. This guarantee authenticates the validity of the request and protects you by making it harder for people to take your money by forging your signature. Please consult with your Medallion signature provider regarding possible additional fees.

    For more information on Medallion signature guarantees, click here.

Questions

For more information on this program, consult your MERS 457 Supplemental Retirement Program Participant Handbook (pdf) or contact our Service Center.

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Individual Retirement Account (IRA)

Your MERS IRA can not only be a source of income during your retirement years, but it can also be a useful tool for consolidating your outside retirement accounts too! Our straightforward investment menu features low cost funds that keep more of your hard-earned money in your account. Rolling in your money from outside retirement accounts multiplies these benefits!

Our Rollover Guide provides a quick summary of which account types can be rolled into your Traditional IRA and which types you’ll want to roll into a MERS Roth IRA.
Funds in your MERS Roth or Traditional IRA are available to you at any time, although taxes and penalties may apply if certain criteria are not met. These criteria are different for Roth and Traditional IRAs.

Withdrawals from a Roth IRA
Assets in your Roth IRA are tracked separately as either contributions you made or earnings from investment activity. You can withdraw your contributions at any time without penalty or tax. Any withdrawals you make from your account will come from your contributions, until those contributions have been depleted.
 
After all your contributions have been withdrawn, you may withdraw your earnings. However, you may pay income tax and a 10% penalty on withdrawals of your earnings, unless the criteria for a qualified distribution are met.

Your withdrawal is considered a qualified distribution if:

  • It has been at least five years since the year you first made a contribution to a Roth IRA (counting the first year as part of the five), AND
  • The distribution is taken:
  • on or after the day you reach age 59 1/2;
  • because you are disabled; or
  • by your beneficiary or your estate after your death.

You can download the Roth IRA Distribution/Direct Rollover Form from the “Resource Library” in your myMERS account or call MERS Service Center to request one.

Withdrawals from a Traditional IRA

Funds in your Traditional IRA are available to you at any time. However, you may pay a 10% early withdrawal penalty if you withdraw funds before age 59 1/2.
 
Your earnings grow tax-deferred until you take a distribution, and then you pay federal income tax and applicable state and local taxes on the taxable amount of your distribution. Your contributions and investment earnings are tracked separately for tax purposes, but each withdrawal you make will contain both contributions and earnings.
 
Distributions may be fully or partly taxable, depending on whether your IRA includes any non-deductible contributions.

  • Fully taxable - if contributions to your IRA were eligible for full deduction, then distributions are fully taxable.
  • Partly taxable - if you made non-deductible contributions to your IRA or were not eligible for a full deduction, then the amount equal to those contributions is taxable. Only the part of the distribution that represents non-deductible contributions are not taxed when distributed. If nondeductible contributions have been made, the distribution consists of both non-deductible and taxable contributions.

You can download the Traditional IRA Distribution/Direct Rollover Form from the “Resource Library” in your myMERS account or call MERS Service Center to request one.

Questions

For more information, consult your MERS IRA Participant Handbook (pdf) or contact our Service Center.

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Disclaimer
The information contained in this Web site is being made available as a public service. The information is not intended to constitute legal or investment advice, or to replace official versions of that information. Benefit Estimates or Service Credit Purchase estimates requested through this Web site are not official descriptions of any benefits, and do not represent a promise by MERS to provide any benefit(s) to any person(s). No one can detrimentally rely upon the information provided in, or requested through this Web site. MERS reserves the right to correct any errors, and presents this information without warranties, express or implied, regarding the information?s accuracy, timeliness or completeness. If you believe the information is inaccurate, out-of-date, or incomplete, or if you have problems accessing or reading the information, please call MERS at 800.767.MERS (6377).