Whether your retirement years are around the corner, or seem a world away, it takes the right tools to meet your goals. The MERS Hybrid Plan offers you two important tools — the stability and security of a defined benefit plan, combined with the flexibility and investment choice of a defined contribution plan — to help put you on the right road to retirement.
At retirement, you’ll receive both a modest lifetime benefit (Hybrid Part I) and a separate account you manage – (Hybrid Part II).
How It Works
Your Hybrid Plan Part I - defined benefit portion, is based on the number of years you’ve worked, your salary, and a multiplier selected by your employer. To qualify for benefits when you retire, you must meet your employer’s requirements, including age and years of service, called vesting.
The Benefit Formula
The Hybrid Plan Part I formula is as follows: Benefit plan multiplier, multiplied by final average compensation (FAC), multiplied by years and months of service, divided by 12 for your monthly (Straight Life) amount.
Example: .015 (multiplier of 1.5%) x $45,000 (FAC) x 25 (years) = $16,875 yearly or $1,406.25 monthly.
Your Hybrid Plan Part II - defined contribution portion is made up of any contributions from you and your employer, and investment interest earned. When you enroll in the Hybrid Plan, you select from the streamlined MERS Investment Menu. For more information, please read Understanding the MERS Investment Menu found here.
Contributions are deposited into your individual account, and invested under your direction. At retirement, your benefits are based on the total amount of money in your account. This amount is determined by:
- your contributions
- any employer contributions
- market performance, minus fees
You must be vested at termination to withdraw your employer’s contributions.
You can begin receiving your retirement benefits when you reach the age and service requirements under your plan provisions. Your MERS Hybrid Plan has two separate retirement provisions.
Click here to learn about the Defined Contribution Plan retirement process.
Click here to learn about the Defined Benefit retirement process.