How It Works

The MERS Retiree Health Funding Vehicle (RHFV) provides employers with a simple answer to a complex problem — how to establish an irrevocable trust for funding other post-employment benefits (OPEB) with cost-effective, diversified investments.

As an established Section 115 Trust, RHFV makes it easy for employers to set aside assets to fund their OPEB liability while benefitting from investing in MERS’s low-cost investment options.

Program Advantages

There are many benefits of the MERS Retiree Health Funding Vehicle.

We’re Local
MERS serves Michigan municipalities exclusively

Peace of Mind
MERS provides employers with peace of mind because MERS acts as sole fiduciary for the default investment fund ― while also providing employers access to a menu of other investment options ― monitoring fund performance, and ensuring fees are reasonable

Holistic Oversight
The MERS Retiree Health Funding Vehicle is a turn-key program, including plan administration, recordkeeping, investment menu oversight and acting as trustee of the programs’ assets

IRS-Approved Solution
The Trust has been approved by a Private Letter Ruling from the IRS

Higher Discount Rate
By pre-funding your OPEB liability through a Trust, you can use a higher discount rate to calculate your unfunded liability

Reduced Liabilities
Earnings on assets will reduce your long-term contributions and unfunded liability

Potential to Reduce OPEB Liability
Funding may prevent your net OPEB obligation from becoming a significant liability on your balance sheet

Flexibility
The Retiree Health Funding Vehicle can be used alone or in conjunction with the MERS Health Care Savings Program