KEEPING YOU ON THE RIGHT ROAD IN RETIREMENT
You’ve worked hard for your money, and now that you’re in retirement, you can let your money work for you. Your MERS Defined Contribution Plan can be an important source of your income, and a great way to stay on the right road in retirement.
As a retired member, you have an invested account you manage, with flexibility and investment choice.
How It Works
As a MERS Defined Contribution Plan retiree, you have a variety of options on how to use your account. You can leave your account invested with MERS, roll your funds into an eligible plan, or take distributions.
By keeping your account in the MERS Defined Contribution Plan, you’ll continue to receive the benefits of MERS Investment Menu, low administrative fees, and excellent customer service.
Distributions
There are several ways to receive payments from your Defined Contribution account — lump sum, substantially equal payments, periodic, amount certain, or period certain. In-Service distributions are allowed while you are active, as long as you are at least age 60.
To begin taking distributions, or to change your distributions, download and return the Distribution/Direct Rollover Form (MD-005).
Please note that all payments 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 Option Public Safety Officers
If you are a former public safety officer as defined by the IRS*, you may be eligible for a tax exemption by using funds in your DC account to pay your insurance provider directly for health insurance premiums.
Please note:
- Payments must be made directly to your insurance provider. You cannot make a payment and then request a reimbursement.
- Using the Public Safety – Insurance Payment Form (form MD-012), you must self-substantiate that you:
- Meet definition of public safety officer as defined by the IRS* AND
- Are enrolled in the insurance provider plan as listed on the form
You will be sent a 1099-R in January reflecting any distributions paid to the insurance provider and should file this documentation with your taxes.
* 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.
MERS Investments
When it comes to investing, it’s important to understand all your options, needs and goals. That’s the first step to finding an investment strategy that best suits you. Even if you are a confident investor, it’s a good idea to make a regular evaluation of your investment choices. The MERS Defined Contribution Plan and the Defined Contribution portion of the Hybrid Plan have four strategic investment categories designed to help you meet your retirement goals. This streamlined approach offers a simple way to choose investments. You should also consult your financial advisor when choosing your investments. For more information, please read Understanding the MERS Investment Menu.
The MERS Defined Contribution & Hybrid Plan Investment Menu consists of:
- Retirement Strategies
- Diversified Portfolios
- Expanded Funds
- Self-Directed Brokerage Window
Please remember, it’s always a good idea for you to review your investment options on a regular basis because investment objectives can change due to changes in your life circumstances, risk tolerances or finances.
Want to learn more? Click the links below for more about the MERS Defined Contribution Plan.
- Publications
- You’ll receive quarterly statements detailing your retirement account.
- You’ll also receive the Retiree News, a quarterly newsletter full of important information about MERS, your benefits, and the issues affecting you.
- You can also log into your account at mymers.mersofmich.com to find up-to-the-minute information about your MERS retirement at any time.
- Frequently Asked Questions
- Forms
- Calculators
- Service Center
- Our Service Center offers friendly, knowledgeable, over-the-phone assistance for a wide variety of benefit questions and issues. The Service Center is available during business hours at 800.767.6377.
Getting Ready For Retirement?
Make sure you’re prepared! Just follow these simple steps:
- Complete any necessary paperwork your employer requires
- Download and complete the Rollover Form (MD-004)
- Submit this form:
- Online through your myMERS account (instructions to do so are located on the form), or
- mail to:
Alerus Retirement & Benefits
P.O. Box 64535
St. Paul, MN 55164
Working in Retirement
MERS defines a “retiree” for Defined Contribution has someone who has separated from employment at or after normal retirement age (generally, this is age 60, employers may have adopted a different age). This means that you can begin taking distributions from your account at any time without tax penalty for early distributions.
After you have left employment, if you find yourself considering a rehired position with the same employer, note that you must have a bona fide separation of employment and the separation must be at least 60 days. If you are rehired into the same covered position, your employer will re-enroll you in the same plan and you will be subject to the required contributions in that division (this applies to any rehire dates after 9/26/2022). While your service will pick up any previous employment to be used toward vesting in your rehired plan, any previously forfeited assets are not subject to reinstatement.
If you were previously taking distributions from your account, or if you have need to do so after returning to work, you may do so by requesting an In-Service distribution (view Form MD-008).
Online Forms
Want to change your investments, or your named beneficiary? Log in to myMERS.
MERS Investment Menu
Streamlined MERS DC Investment Menu.
Stay On Track
Are you still on the right road in retirement? Estimate your future costs.