HELPING YOU STAY ON THE RIGHT RETIREMENT TRACK
When you planned for your retirement you dreamed it would be worry free, and in your control. As a retired member of MERS Hybrid Plan, you have the best of both worlds — the stability and security of a defined benefit plan, combined with the flexibility and investment choice of a defined contribution plan.
As a MERS Hybrid Plan retiree, you receive both a lifetime benefit (Hybrid Part I) and a separate account you manage (Hybrid Part II).
How It Works
Your Hybrid Part I — defined benefit portion is based on the number of years you’ve worked, your salary, and a multiplier selected by your employer.
Your Hybrid Part II — defined contribution portion, offers you 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.
Hybrid Part II Distributions
There are several ways to receive payments from the defined contribution portion of your account — lump sum, substantially equal payments, periodic, amount certain, or period certain.
To begin taking distributions, or to change your distributions, download and return the Distribution/Direct Rollover Form (MD-304).
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.
Hybrid Part II 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 (RMD). 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 (if 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 Hybrid Plan Member Handbook.
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 and the Investment Menu Summary.
The MERS Defined Contribution & Hybrid Plan Investment Menu consists of:
- LifePath Target Date Funds
- 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 Hybrid Plan.
- MyMERS Account
- You can also log into your account to find up-to-the-minute information about your MERS retirement at any time.
- 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.
- 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.
Working in Retirement
If you retire and later decide to return to the workplace, your pension benefits can be affected under certain conditions. There are no restrictions if you are hired anywhere other than the municipality you retired from.
If you rehire at the municipality you retired from, certain rules apply.
Taxability of MERS Benefits
Federal income tax, and under certain conditions, state tax is required on your MERS pension, with the exception of any post-tax employee contributions you may have made. You choose how you want your taxes to be withheld at the time of your first payment. You may change your tax choice at any time.
Please see the Pension Recipient’s Federal Income Tax Withholding Authorization (Form 31).