What: See below
Action Required: None
Key Dates: Enhancements were approved and are effective as of 9/26/22
Impacted Audiences: Defined Contribution Participants - Specifically those who are active and 60+ or those who are rehired after retiring
For More Information: Contact your regional manager
Key Information:
On September 26, 2022, the MERS Retirement Board also approved the following enhancements to the MERS Defined Contribution (DC) Plan:
- The first enhancement defines when a DC Plan participant is considered a retiree. This change clarifies for employers and participants when a rehired DC Plan participant is subject to the working in retirement guidelines. Moving forward, a DC participant is a retiree if they have separated from service on or after reaching normal retirement age. For most municipalities, the normal retirement age is 60. However, some municipalities have adopted a different normal retirement.
- The second enhancement clarifies how the working in retirement guidelines are applied to the MERS DC plan. This revision allows re-enrollment of a rehired retiree into the DC plan, if the participant meets the definition of an eligible employee. A bona fide termination is still required, meaning a 60 day separation is needed before returning to work. As a reminder, the DC plan does not have any hour restrictions for rehired retirees.
- The third enhancement makes an adjustment to the age when active DC participants are eligible to begin taking in-service distributions. This change lowers the age for in-service withdrawals from the current age of 72 down to the age of 60. In short, this lower age will allow more flexibility to participants who reach the DC Plan’s default Normal Retirement Age of 60 to access their DC Plan balance. This change is intended to offer employers and participants more options to transition towards retirement.