Hybrid Plan Administration


Here you will find the information you need to administer your MERS Hybrid Plan.

In order to generate Snapshot retirement readiness reports for your employees enrolled in the MERS Hybrid Plan, we ask that you report wages and contributions for these employees. Click here for more information.

Connecting Your New Hires with Their MERS Benefits

Here’s what your new hires can expect when you enroll them in a MERS plan:

Within two weeks of enrolling, new hires they will receive:

  • A welcome email introducing MERS and giving an overview of the plan(s) your new hire is enrolled in, along with immediate action items. Included in this email will be a link to the MERS New Participant resource page.

Here, new hires can find:

  • Plan information
  • Video explaining plan features
  • Information on the benefits of a myMERS account

Important! It is highly encouraged that you submit an email address for your new hire upon enrollment in order for MERS to generate a welcome email for your new hires. If you do not include an email address, your new hires will continue to receive welcome kits via postal mail within six weeks of enrollment.

 Participant Handbook

* New hires who are new to a MERS product will receive a product welcome letter.

Rehired employees (that are not considered “retirees” for purposes of MERS Defined Benefit) are placed in the open active plan even if it is different from the plan they retired from. Please refer to the “New Hire” section on this page for more information.

When you have an employee transferring from one division to another, the standard rules place them into the active plan at the time of a transfer. Treating transferred employees the same will provide consistency and effortless recordkeeping during transitions. Your municipality may adopt the plan continuation rules using the Employer Resolution Establishing a Uniform Transfer Provision.

Standard Transfer Rules and Plan Continuation Rules
Under the Standard Transfer Rules, if an employee transfers from one division to another, they must participate in the open, active retirement plan of the new division. Under the Plan Continuation Rules, the employer will enroll a transfer or rehired employee into the closed plan that is the same plan type as the plan the employee transferred from (or was formerly enrolled in), whether open or closed, if such plan exists. When both open and closed plans of that type exist, the employee will be enrolled in the open plan. If the same plan type does not exist, the employee is enrolled in the open plan for that division, regardless of plan type.

Under either rule, where a plan offers an option in employee contributions, the plans’ default rate will apply to the returning or transferring employee.

A Participant Transfer Certification form is required regardless of which rules are adopted. Employers may adopt the Plan Continuation Rules by Resolution Establishing Uniform Transfer Provision.

Transfer Form

If you have an employee that retires and later decide to return to the workplace, there are restrictions that can affect their MERS pension under certain conditions. These restrictions apply only if they become re-employed by the same employer they retired from. There are also different rules for elected officials than regular employees. There are no restrictions if they are hired anywhere other than the employer they retired from.

If the employee retires and returns to a regular (non-elected/appointed) position, the following rules apply:

  • They must complete and submit the Working in Retirement Certification (Form F-29c), signed by both the employee and the employer, to MERS.
  • They must have a bona fide termination before returning to work, per IRS rules. Bona fide termination is defined as no formal or informal agreement to return to work prior to retirement.
  • They must have 60 days of separation.
  • They may work up to 1,000 hours in a calendar year.

If an employee retires and returns to an elected/ appointed position, the following rules apply:

  • They must complete and submit the Working in Retirement Certification (Form F-29c), signed by both the employee and the employer, to MERS.
  • They must have a bona fide retirement before returning to work, per IRS rules. Bona fide retirement is defined as no formal or informal agreement to return to work prior to retirement.
  • If they are re-elected/appointed into the same position, they must have two years of separation.
  • If they are elected/appointed into a different position, they must have 60 days of separation.
  • They are not subject to any hour limitation.

To terminate an employee from Part I (defined benefit portion):

  1. If they are retiring, have them complete and sign the Application for Service Retirement and return it to us 45-90 days before their retirement date. You will also need to sign their Certificate of Termination, which they return to us.
  2. When you report their final wages, change their employment status by logging in to the MERS Employer Portal.
  3. Click ‘Defined Benefit’ under the ‘Reporting’ tab.
  4. Click ‘Prepare Reports’ under the ‘Wage Reporting’ tab.
  5. Click ‘Search for Member,’ and then click on their name.
  6. Change their employment status to ‘Terminated’ followed by the appropriate reason (i.e., ‘Retired’).

To terminate an employee from Part II (defined contribution portion):

  1. When you report their final contributions, change their employment status by logging in to the MERS Employer Portal.
  2. Click ‘Defined Contribution’ under the ‘Reporting’ tab./MERS/Resources/Log-In
  3. Click ‘Prepare Reports’ under the ‘Wage Reporting’ tab.
  4. Click ‘Search for Member,’ and then click on their name.
  5. Change their employment status to ‘Terminated’ followed by the appropriate reason (i.e., ‘Retired’).

It is important to note that terminated employees do NOT have to roll out their Hybrid Part II account balance upon termination. In fact, there are many benefits to keeping their money with MERS even throughout retirement. For more information on these benefits, view our rollover information.

One of the most important things employees can do for themselves and their family is to name a beneficiary. Equally important is to make sure beneficiary information remains up-to-date.

Employees should name their beneficiaries when filling out the Hybrid Enrollment Form (Form MD-300). They can add, edit or change contact information through their myMERS account.

Please note: If employees choose to make these updates by completing the Hybrid Beneficiary Designation Form (Form MD-303), you can send the completed form to MERS.

Employees who would like to verify MERS-to-MERS time for inclusion Hybrid Part II service should contact the MERS Service Center at 800.767.MERS (6377) or fill out and submit the MERS-to-MERS Service Verification Form (form md-016). MERS-to-MERS time will only apply before a Hybrid Part II distribution is taken or a forfeiture occurs, ensuring that employers will not incur future liabilities.

To view IRS-established retirement plan contribution limits and reporting data for the current year, click here (pdf).

Hybrid Part I:
There are two types of Hybrid Part I (defined benefit plan portion) disability retirement: Non-duty disability and duty disability. Employees may apply for disability retirement benefits if they have incurred a total and permanent disability, or you as the employer can submit the application your employees’ behalf. Applications must be filed within one year of termination. In addition to an independent medical examination MERS requires the employee to undergo, we may ask the employer’s designated contact additional questions regarding the employees’ situation.

After review of all information, the final decision regarding disability pension requests will be determined by MERS. MERS will mail a written notice to the employer when a disability application for one of its employees is approved or denied. An employer may appeal a decision that it does not agree with by requesting a contested case hearing.

To apply for disability benefits, the employee or employer should:

  1. Complete and submit the Application for Disability Retirement (Form 51), or by calling the MERS Service Center at 800.767.6377.
    Current medical records will need to be submitted to MERS with the application, including two separate Physician’s Statements. If the illness or injury was a result of a work-related cause MERS will need a copy of Employer’s Basic Report of Injury and all documents relating to worker’s compensation. Please review the instructions on Form 51 for further details.
  2. The application and any medical documentation will be evaluated by Managed Medical Review Organization, Inc. (MMRO), MERS’ disability vendor. The employee will be contacted by MMRO within 5 business days of receiving the application to discuss next steps in the disability evaluation process. The evaluation process may take up to 3 months to complete.
  3. We will notify both the employee and employer of the results once the disability evaluation is complete. If the application is approved, the employee will be eligible to apply for retirement benefits. The disability approval letter will detail next steps in order to start collecting a benefit.

For more information on disability retirement, please consult the Participant Handbook or contact our Service Center.

Hybrid Part II:
In the event an employee becomes permanently disabled while actively employed, all funds from Hybrid Part II (defined contribution portion) become fully vested. The Internal Revenue Code definition of disability, Section 72(m)(7), states that “an individual shall be considered to be disabled if they are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite duration.”

To request a distribution, the employee must obtain a signed letter verifying his or her qualification under the Internal Revenue Code definition of disability, Section 72(m)(7), from his or her physician. When the employee has received this document, he or she will need to submit it, along with a completed Defined Contribution Distribution Form (Form MD-005), to MERS’ record keeper, Alerus Retirement Solutions. Instructions to submit these documents are located on the form. When MERS has processed the employee’s request, he or she will either be notified by Alerus that more information is needed or, if approved, will receive the distribution.

For more information on disability retirement, please contact our Service Center.

You can change the method in which you pay your monthly invoices for open defined benefit divisions.

  • For more information, click here.
  • If you would like to change your billing method, access the online form.

Unless otherwise adopted by the employer, defined contribution plans (including Hybrid Part II) earn service based on elapsed time. Elapsed time looks at only the date of hire and date of termination to calculate time toward meeting vesting.

Example: If an employee has a hire date of 10/1/2013 and termination date of 10/5/2014, one year of service is earned toward vesting. If the termination date was 9/15/2014, no service would be earned.

Elapsed time has been applied to all active participant records. Participants who were terminated prior to October 2015 will have service calculated based on when contributions were reported by their employer in each month. When applying service credit from defined contribution to defined benefit, months can still be applied to help a participant reach their defined benefit vesting. When applying service toward a defined contribution record from a defined benefit or another defined contribution plan, all time (by months) will be considered, although only full year increments count to reach vesting.

It is important to monitor the forfeiture balance of the defined contribution (DC) portion of your MERS Hybrid Plan throughout the year to ensure you use your funds in accordance with Internal Revenue Service (IRS) guidelines.

What is a forfeiture?

A forfeiture is the non-vested employer contributions of a participant’s account that they give up upon separating from employment before meeting vesting requirements and:

1. Fulfill a 12-month separation of employment (date of termination + 12 months), OR
2. Take a distribution from their account following termination

You can view which participant accounts are included in the last forfeiture deposit through the Request Reports function in your Employer Portal. Page 19 of the Wage, Contribution and Employer Portal Guide shows the steps to generate this report.

How can forfeitures be used?

Per IRS regulations, funds in your forfeiture account must be used within the DC plan in the plan year they occur and can be used in three ways:

  1. Funds may be used to offset future employer contributions – the majority of plans use this option.
  2. Funds can be used to offset employee fees.
  3. Funds can be equally distributed across all employee accounts

MERS will initiate a forfeiture of non-vested funds from former employees after a period of five years has passed from the date of termination. However, any participant with a termination date of January 1, 2017 or later who has not met the requirements to become vested in their employer contributions will forfeit non-vested assets after a period of one year or a withdrawal of his or her entire vested account balance has occurred. MERS-to-MERS or Act 88 time may be used to meet vesting requirements as long as the time is earned before the forfeiture occurs. Additionally, time earned at the former employer may be used toward vesting and eligibility at a future MERS employer.

Forfeitures are pulled from affected participant accounts four times per year – February, May, July and November.


 Wage, Contribution and Employer Portal Guide (pdf)

 Understanding Forfeitures (video)

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.