Thursday, July 19, 2018


The MERS Defined Benefit Plan is a traditional pension plan. Eligible employees earn a retirement benefit based upon a three-part formula:

MERS Defined Benefit Plan Formula

A Closer Look

Final average compensation (FAC)

The average of the highest consecutive wages over a defined period of time as determined by the employer, usually three to five years.

Service credit

The total amount of qualified periods of work, including any purchased service credit. Employees earn service credit for each month of work that meets the employer's requirement.

Employers may define their own requirements for a "month of service;" however, the standard definition of a qualified month is 10 full-time days. The employer can adopt a different standard month of service, such as 10 six-hour days per month or 80 hours per month. A day of work is determined by the employer, but it is typically considered eight working hours.

For more information on Service Credit Purchases, click here.

Benefit multiplier

The benefit multiplier ranges from 1.0% to 2.5%, and is chosen by the employer. Multipliers of 2.25% and higher have a maximum benefit of 80% of FAC.

How Plans are Funded

Defined benefit plans can be funded by three sources: employer contributions, employee contributions and earnings on investments (watch DB Funding video). MERS investment earnings fund more than half the contributions.

In a defined benefit plan contributions vary from one year to the next (watch Investment Return Assumption video). Required contributions are reported in the Annual Actuarial Valuation and consist of two components: Normal Cost and Amortization of any Unfunded Accrued Liability (UAL). For more information, click here.

Investing in Retirement

MERS invests in a diversified fund utilizing various management strategies to provide downside market protection with upside market participation. For more information on our investments, click here.

Plan Handbook

For more details on plan provisions such as cost-of-living adjustments, disability and death provisions, etc., click here.

Service Credit Purchase

Click here for the Service Credit Purchase request form and information.

Invoice Change Request

Open Defined Benefit divisions can change their billing type with MERS. Click here for the online form.

Annual Actuarial Valuation (AAV)

View our guide to your Annual Actuarial Valuation.

Contribution Limits & Reporting Data

Click here to view data sheet.

MERS Social Media MERS Facebook MERS TwitterMERS LinkedInMERS Youtube

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).