Employer Terms

Term/Acronym	Stands For	Definition
MERS	Municipal Employees’ Retirement System of Michigan	MERS is an independent public not-for-profit organization that has partnered with Michigan municipalities for more than 65 years, helping them provide safe, secure retirement plans for their employees.
MERS Plans & Programs
457	457 Supplemental Retirement Program	The MERS 457 Program is a deferred compensation program for public sector employees.
DB	Defined Benefit	The MERS Defined Benefit Plan is a traditional pension plan that rewards longevity by providing employees with a lifetime retirement benefit.
DC	Defined Contribution	The MERS Defined Contribution Plan is a qualified retirement program under Section 401(a) of the Internal Revenue Code. Each participant has an account to which contributions are made and invested and the benefit is based on the total amount of money in the account.
GLD	Group Life & Disability	MERS partners with The Standard to offer several group life and disability benefits including short term and long term options.
H	Hybrid	The MERS Hybrid Plan is a combination of a fixed defined benefit plan with a flexible defined contribution plan.
HCSP	Health Care Savings Program	The MERS Health Care Savings Program is designed to help participants prepare for the cost of health care after they leave their employer with an invested account they manage. It’s an employer-sponsored program providing a tax-free medical savings account for covering the costs of post-employer medical expenses.
ISP	Investment Services Program	The MERS Investment Services Program provides non-membership access to the MERS Total Market Fund along with other pre-defined portfolio options. These funds are professionally managed by the MERS Investment team and provide access to our economies of scale and low fees.
MERS Premiere Advantage		MERS partners with Humana to provide health coverage exclusively for Medicare-eligible MERS retirees and their spouses with MERS Premiere Advantage.
RHFV	Retiree Health Funding Vehicle	The MERS Retiree Health Funding Vehicle helps employers set aside assets for funding their retiree health care liability, while benefiting from investing in the available MERS investment options.
Stable Income Annuity		The MERS Stable Income Annuity allows individuals to convert an account, like a 457, into a guaranteed income stream for life, or a period of their choice.
Defined Benefit Related Terms
AAV	Annual Actuarial Valuation	An annual actuarial valuation is an annual report that is produced for municipalities enrolled in defined benefit. This report measures funding progress, establishes contribution requires for the next fiscal year and provides actuarial information in connection with applicable Governmental Accounting Standards Board (GASB) statements
Act 88 (or Reciprocal Retirement Act)		Act 88 may be adopted by the governing body of a municipality with DB so service earned at non-MERS municipalities will be recognized for vesting and retirement eligibility requirements.
COLA	Cost of Living Adjustment	Municipalities have the option to adopt a COLA benefit for retirees, which automatically increases their annual benefit by a certain percentage to protect against inflation.
FAC	Final Average Compensation	Final average compensation is a participant’s average of the highest wages earned over a period of time determined by the employer.
Normal Cost		The retirement system’s cost of benefits accruing on the current service – if there is no unfunded liability and the actual experience meets the actuarial assumptions.
Service Credit		Service credit is the total amount of all qualified periods of work.
UAL (or UAAL)	Unfunded Accrued Liability (or Unfunded Annual Accrued Liability)	In a defined benefit pension plan or retiree healthcare plan, unfunded liability is the difference between the estimated cost of future benefits, and assets that have been set aside to pay for them.
Participant Directed Accounts Terms and Acronyms
Alerus Financial		Alerus Financial is a company that has partnered with MERS to provide trading and custodial services for our PDAs, as well as banking services for plan deposits and withdrawals.
PDA	Participant Directed Accounts	Participant directed accounts are the MERS programs that participants have the ability to change their own investments as desired. These programs are the MERS Defined Contribution Plan (including the DC portion of Hybrid), MERS 457 Program and MERS Health Care Savings Program.
Other Terms and Acronyms
Financial Report		An annual report (and report summary) that MERS produces that provides an in-depth look into the financial standings and actions within the organization. This report is created and posted on the MERS website in an effort to provide transparency and accountability.
Fiduciary		As the fiduciary of all our retirement plans and programs, MERs is responsible for establishing the plan document, determining the investment options available and monitoring fund performance. MERS also accepts full fiduciary responsibly for the plan.
Employer Events		Employer-focused free meetings held regionally and hosted by a MERS regional manager. These meetings typically highlight a topic or multiple topics of interested to employers and allow employers to provide feedback, ask questions and discuss concerns.
OPEB	Other Post Employment Benefit	Other Post Employment Benefits (OPEB) typically refers to the benefits that a retiree receives after employment such as retiree health care.
Participant Events		Participant-focused meetings held regionally and hosted by a MERS benefit education specialist. These meetings typically highlight a topic of interested for municipal workers enrolled in a MERS plan.
Quick Bite Webinars		Are webinars and are typically participant-focused. These free webinars are held during the lunch hour and allow participants to get information about a MERS topic and ask questions to MERS staff without having to leave their desk.

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