How It Works

The MERS Defined Contribution Plan (MERS DC) is a qualified retirement plan under Section 401(a) of the Internal Revenue Code. This plan allows employers and employees to make pre-tax contributions to an account that accumulates tax-deferred. Upon retirement, the benefit is based on the total amount of money in an employee’s account.


An employee’s benefit at retirement is based on a four part formula:

DC Formula
Employer Contributions + Employee Contributions + Earnings or Losses in the Market – Fees = Account Balance

Quick Links

 Plan Handbook

Funding The Plan

View Funding Details

Employer and Employee Contributions

Employer Contributions

  • Made on a pre-tax basis
  • Not taxable until withdrawn from the plan
  • Employer contributions may be subject to vesting
  • Three contribution formulas permitted under the plan:
    1. Fixed dollar or percentage, without any required employee contributions
    2. Fixed dollar or percentage, with required employee contributions
    3. Fixed percentage of employee contributions is matched

Employee Contributions

  • You can require your employees to contribute a set dollar amount or percentage of their pay
  • You may offer a match contribution rate, where your contributions are tied to the amount employees contributes
    • Employees make a one-time election of their contribution at the time of enrollment
    • Once the employee contribution rate has been established, it cannot be changed unless you as the employer makes changes to the plan
  • Required contributions are pre-tax for state and federal income tax purposes
    • Subject to Social Security FICA taxes
    • You may structure your plan to match employees voluntary contributions in the MERS 457

Plan Advantages

There are many benefits of the MERS Defined Contribution Plan.


Because we operate on a not-for-profit basis, the MERS DC Plan is offered at no cost to employers, while participants pay low costs under a straightforward fee structure.


It is available to both full-time and part-time employees.

Sound Investments

The DC investment menu provides your employees with select investment options to design a diversified portfolio to match their investment needs.

Participant-outcome Focused

MERS employs behavioral economics to design a streamlined investment menu that guides participants to make decisions in their own best interest, while giving them the freedom to pursue their own investment choices.

 Participant Engagement

DC plan participants are provided ongoing, customized educational opportunities with a focus and frequency that meet your needs as the employer, and provide your employees the information they need to plan for a financially secure retirement.

 Financial Fitness Tool
The Financial Fitness tool is available to MERS participants through myMERS. The tool includes a series of workouts they can engage in to help determine their current Financial Fitness Score in the areas of emergency savings, debt management and planning for the future along with the ability to create a budget to manage their day-to-day spending and as a bonus, workouts to help with insurance and health savings account management (if applicable).

Defined Contribution Plus

We’ve made flexibility an option! MERS Defined Contribution PLUS is an optional enhancement that pairs our traditional MERS Defined Contribution Plan with a 457(b) supplemental savings program to function as a single, flexible plan with multiple benefits.

  • Employers can require mandatory participation in the Defined Contribution portion of this plan
  • Employers can incentivize employee savings through matching pre-tax contributions

Please contact your regional manager to learn more.

Fiduciary Responsibility

shield icon As the sole fiduciary for our retirement plans, MERS takes on the liability for selecting the investment options, monitoring fund performance, and ensuring fees are reasonable. Learn more about fiduciary responsibility.

Disclaimer: The information contained in this Web site is being made available as a public service. The information is not intended to constitute legal, tax, accounting or investment advice, or to replace official versions of that information. Benefit Estimates or Service Credit Purchase estimates requested through this Web site are not official descriptions of any benefits, and do not represent a promise by MERS to provide any benefit(s) to any person(s). No one can detrimentally rely upon the information provided in, or requested through this Web site. MERS reserves the right to correct any errors, and presents this information without warranties, express or implied, regarding the information's accuracy, timeliness or completeness. If you believe the information is inaccurate, out-of-date, or incomplete, or if you have problems accessing or reading the information, please call MERS at 800.767.6377.