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 you have? Help figuring out what MERS program you have.
Jump to your program:
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:
- Apply for retirement.
It’s important to apply within 45-90 days of your anticipated retirement date. Apply online through your myPension account, by clicking the “Apply for Retirement” button. As part of the application process, you choose one of three methods of payment that works for you.
Benefit Payment Option Video
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 online account to estimate how each of these payment options will affect your monthly benefit.
- Processing.
This may take up to 6 weeks to review your file and make necessary calculations.- Personalized Calculation.
MERS will send a personalized calculation of your expected benefits with a letter confirming your retirement elections.- Enjoy Your Retirement.
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.We’re here to help
Our Service Center offers friendly, knowledgeable, over-the-phone assistance for a wide variety of benefit questions and issues. Service Center staff is available weekdays 8:30 a.m. – 5:00 p.m. at 800.767.6377.
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.
Distributions/Withdrawals
Once you’ve retired, there are different ways to receive payments from your Defined Contribution account — payment intervals (installments), or one-time lump sums.
The MERS team at Empower will support you through the withdrawal process. Call 833.500.6377.
Please note that all withdrawals are taxable in the calendar year you receive the money. We are also required to apply mandatory withholding for federal or any applicable state income taxes, although in some instances you may opt out of this withholding.
If you are married and your vested balance is equal to or more than $1,000, you must choose the Qualified Joint and Survivor Annuity, unless your spouse consents in writing to another form of payment.
Required Minimum Distributions
After you have terminated employment and reached age 73, you (or your beneficiary) must begin taking minimum distributions from your plan every year. This IRS mandatory withdrawal is called a Required Minimum Distribution. Your initial distribution can be deferred until April 1 of the following year if you’ve reached the age 73 (if you were born 1/1/1951 or after), age 72 (f you were born before 1/1/1951), or age 70½ (if you were born before 7/1/49); unless you have recently left your employment. If so, next year you’ll receive your distribution by April 1 and at the end of the year to cover the current year.
Example: You turn age 72 in August 2022. You defer your first required distribution until April 2023. Your second required distribution will occur by December 2023. Your distribution is subject to income tax withholding. If you do not take your required minimum distribution when required, there is a significant IRS penalty.
For more information about your distribution options, please see the MERS Defined Contribution Plan Member Handbook.
Insurance Premium Tax Benefit for Public Safety Officers
If you are a former public safety officer as defined by the IRS*, you may be eligible for a tax exemption. Beginning January 1, 2023, the IRS modified previous regulations that insurance premium payments would only qualify for tax exemptions if these payments were paid directly by pension provider. This rule was modified in 2023 to remove the payment by provider restriction, making this benefit more accessible to public safety officers. Review this with your tax professional to see if you qualify.*A public safety officer as defined by the IRS is an individual serving a public agency in an official capacity, with or without compensation, as a law enforcement officer, as a firefighter, as a chaplain, or as a member of a rescue squad or ambulance crew.
We’re here to help
If you have any questions, please consult your Defined Contribution Participant Handbook (pdf) or contact the MERS team at Empower at 833.500.6377.The MERS team at Empower is available:
• Weekdays: 8:00 a.m. to 10:00 p.m.
• Saturdays: 9:00 a.m. to 5:30 p.m.
• Automated system available 24/7
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.
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 you separate from employment, you will see a transfer of up to $1,000 your assets (depending on your account balance) deposited into an HRA Guaranteed Protection Fund. This ensures appropriate assets are available for reimbursement at the time you begin using your account for reimbursement of medical expenses. Your total account balance will always reflect the full market value as of the last business day and claims will be processed until your account reaches zero balance.
Reimbursements
You will receive a claims card in the mail approximatively seven days from the time your employer reports your termination to MERS. The claims card is a convenient way to use your Health Care Savings Program account for reimbursement of eligible medical expenses. Unlike a traditional debit card, the claims card automatically identifies a medical expense at the time of purchase. It is important to keep your receipts as you will likely be asked to submit them for verification. For your security, the claims card has a daily swipe limit of $10,000.
You can also request reimbursements online by using the Request Reimbursement selection of your account overview, or the Claims section within the Empower Benefit Accounts app. From here, you can update banking information for direct deposit, and upload third party receipts showing which expenses have been paid. Processing your request may take up to three business days, this may be longer if additional documentation is needed.
Additionally, you can pay providers directly through your online account. Simply follow the instructions for uploading the bill you received, enter the payment information for the vendor and schedule the direct payment. Participants utilizing this payment option should monitor their account to ensure the payment was distributed from their account in a timely manner.
You can also submit your requests by mail. A reimbursement form along with a copy of the applicable receipts is required. Reimbursements are processed within 10 business days.
If you have any questions regarding your claims, please call the the MERS team at Empower, weekdays and Saturdays at 833.500.6377.
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 — Aptia365 — 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 the MERS team at Empower at 833.500.6377.The MERS team at Empower is available:
• Weekdays: 8:00 a.m. to 10:00 p.m.
• Saturdays: 9:00 a.m. to 5:30 p.m.
• Automated system available 24/7
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.
Rollovers
With a MERS 457, you can roll over funds from our outside retirement accounts, making it easy to manage your finances in one place. Our Rollover Guide provides a quick summary of which account types can be rolled into your MERS 457.
Distributions/Withdrawals
You can withdrawal from your MERS 457 at any time after leaving employment. Taxes, fees, and any applicable penalties depend on your plan type and individual circumstances.
There are different ways to receive payments from your MERS 457 — payment intervals (installments), or one-time lump sums.
The MERS team at Empower will support you through the withdrawal process. Call 833.500.6377 or log in to your online account to get started.
Required Minimum Distributions
You must take the required minimum distributions from your plan every year after your initial distribution. Your initial distribution can be deferred until April 1 of the calendar year following the year you turn age 72, or terminate employment, whichever is later. The subsequent payments must be taken by December 31 of each year.
You can begin using your account as soon as you leave employment, or you can continue to keep your assets invested.
Please remember, you must begin taking Required Minimum Distributions when you reach age 72 for any pre-tax assets held in your account.
Insurance Premium Tax Benefit for Public Safety Officers
If you are a former public safety officer as defined by the IRS*, you may be eligible for a tax exemption. Beginning January 1, 2023, the IRS modified previous regulations that insurance premium payments would only qualify for tax exemptions if these payments were paid directly by pension provider. This rule was modified in 2023 to remove the payment by provider restriction, making this benefit more accessible to public safety officers. Review this with your tax professional to see if you qualify.*A public safety officer as defined by the IRS is an individual serving a public agency in an official capacity, with or without compensation, as a law enforcement officer, as a firefighter, as a chaplain, or as a member of a rescue squad or ambulance crew.
Questions
For more information on this program, consult your MERS 457 Participant Handbook (pdf) or contact our Service Center.
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!
- Download the IRA Incoming Rollover/Transfer Form (Roth and Traditional)
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 59½;
- 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 59½.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.
We’re here to help
For more information, consult your MERS IRA Participant Handbook (pdf) or contact the MERS team at Empower at 833.500.6377.The MERS team at Empower is available:
• Weekdays: 8:00 a.m. to 10:00 p.m.
• Saturdays: 9:00 a.m. to 5:30 p.m.
• Automated system available 24/7