MERS is partnering with a new recordkeeper

As part of this transition, we will be changing the way employers report information for DC, 457, and HCSP plans.  To best support employers, we worked with Empower to review individual plan structures and responses to they payroll survey completed in 2025 to provide a personalized recommendation on the best contribution reporting option to meet each employer’s unique needs.

You should have received information regarding changes to your payroll submission process previously. There are three methods of payroll submission: (1) Payroll Bridge (PB), which is used for larger plans utilizing a payroll provider that has an automated connection to Empower; (2) Payroll Data Interchange (PDI), which is used for mid to larger plans that utilize a predefined template that is used to upload payroll and participant demographics; and (3) Guided Payroll Process (GPP), which is used for smaller plans that allows for manual entry of payroll and demographic information. Employers that utilize BS&A for payroll, will have a custom payroll submission process.

All payroll submission methods require ACH banking for funding.

Yes. In addition to changes in how employers will report, there will also be updates to what information employers are required to report.

• Report compensation (DC, 457, and HCSP):
  This is essential for maintaining compliance with retirement plan regulations. It also provides critical data for a new financial wellness tool we’re introducing in partnership with Empower – the Lifetime Income Score. This tool allows employees to estimate their projected monthly income in retirement, helping them make informed decisions and better prepare for the future.
• Report elective deferral rates (457 and DC post-tax):
  Providing any elective deferral rates participants are enrolled in allows them to be more engaged with their overall financial health. They will be able to model and project their retirement income based on their compensation, to assist them in planning for retirement. It also streamlines the compliance process and aligns to IRS contribution maximum limitations.
• Submit full employee roster (457):
  This enables us to proactively reach out to employees who are eligible to participate. This outreach helps them better understand the benefits of this valuable employer-sponsored option and encourages them to take action.

Starting in the spring of 2026, we are introducing several changes to streamline processes.

• All elective contribution changes (457 and DC post-tax) will need to be initiated directly by participants through the Empower online system. Once a participant submits a change, employers will receive a notification with updated information, enabling them to adjust payroll withholding accurately and in a timely manner. This will provide uniformity across all adopting employers and allow participants to easily make all transactions on their retirement accounts directly with Empower.
• Active employees will be required to update their mailing address information directly through their employer. This updated information will then be included in the employer’s ongoing reports to Empower. This change is designed to ensure consistency between systems, reduce discrepancies, and maintain accurate address records. Once an employee separates from service, they will be able to update their address directly through their online account.

Yes, you can expect a few updates to the Plan design:

• Loans (DC, 457): Beginning 9/1/2025, plans that offer loans will be required to apply the loans across all divisions under the employer umbrella. This modifies the option to offer loans only in certain divisions.
• Mandatory Contribution Ranges (DC): Beginning January 1, 2026, all DC plans that offer a required pre-tax employee contribution range or choice of options, will be updated to provide employees with the full range of allowable contribution options. This means that for all employees hired on or after January 1, 2026, the available contribution range will be from 0% to 99%, subject to the annual IRS limits. If your current range or option set has a minimum greater than 0% (or $0), participants will be required to contribute at least that much, meaning the range will start at the minimum and go up to 99%, or the IRS limit.
• Probationary Periods (457, DC, and HCSP): Beginning in the spring of 2026, vesting in the DC and HCSP plans will begin on an employee’s original date of hire, rather than after the probationary period ends. DC and 457 employees may roll funds into their plan right away. For DC, 457, and HCSP, employers will report all new employees on their hire date, regardless of their probationary period.
• DC+ Plans: Starting with the transition to Empower, DC+ plans will be split into two distinct plans: DC & 457. Upon log-in, participants will see separate DC and 457 plans with Empower, and employers will be required to submit contribution reports for both plans.
• Post-Tax Distribution Limitation (DC): Beginning January 1, 2026, participants are no longer limited to 2 post-tax distributions per year.
• Claims Eligibility (HCSP): Effective January 1, 2026, participants must be terminated from employment to access their account for reimbursement of medical expenses.  Participants who were on medical leave greater than 6 months as of January 1, 2026, will be grandfathered in, allowing them to continue using their funds until they return to work, or terminate employment.
• Transfers/Rehires (DC, HCSP): Effective with the transition to Empower, employees who transfer between divisions will retain the original vesting schedule applied to their existing employer contributions. Any new employer contributions made after the transfer will follow the vesting schedule of the employee’s new division.

As new Plan design changes are approved by MERS Retirement Board, they will be communicated to impacted parties and added to this list.

At a high level, participants will need to create a new online account with Empower to view their account balances, change voluntary contributions, designate beneficiaries, change investments, view statements, and more.

A transition guide (pdf), which provides detailed information on what to expect during and after the transition, will be delivered to all participants. Claims eligible HCSP participants will a special guide detailing information specific to claims processing.