Some of the frequently asked questions that we have received regarding the COVID-19 outbreak include:
- Pension Payments Will Be Paid On Time
MERS continues to remain operational and will process pension payments on time.
- Help Us Help You by Using myMERS
We are asking participants to use their myMERS account as the primary method of conducting business with MERS at this time. Using this secure online method will help ensure transactions are processed efficiently while teams are working remotely. As an alternative, you can fax us forms at 517.703.9706.Note: any paperwork that is sent via U.S. mail may experience processing delays.If you have an urgent request, the MERS Service Center remains open and available to assist you Monday through Friday from 8:30 a.m. to 5:00 p.m. by calling 800.767.MERS (6377). The Service Center is also available to help you walk through any of our online processes.
- MERS Office Building is Closed
The MERS office building is currently closed. However, MERS staff is still hard at work and you can continue to reach us:
- The MERS Service Center remains open and available to assist you Monday through Friday from 8:30 a.m. to 5:00 p.m. by calling 800.767.MERS (6377)
- You can log in to myMERS to review your account and perform many transactions
- We’re Postponing MERS-Hosted Events
All MERS-hosted events, such as Pizza & Planning, will be postponed until further notice. If you have registered to attend an upcoming event, we will contact you directly with links to related online webinars and videos as an immediate alternative.
As new developments emerge, we will share information with you about how we continue to operate safely and effectively. Thank you for your support as we work to keep our communities safe.
- CARES Act distribution and loan allowances expired 12/31/20
- The updated CARES Act signed 12/27/2020 did not extend the limits or deadlines
The $2 trillion stimulus bill, known as the Coronavirus Aid, Relief, and Economic Security (CARES) Act, addresses a range of economic and health-related issues resulting from the COVID-19 pandemic. As your retirement plan fiduciary, the MERS Retirement Board evaluated the impact to your retirement plans and took the following actions to assist employers and plan participants.
The CARES Act created a new in-service distribution type called a “coronavirus-related distribution” (CRD). The provision is similar (but not identical) to relief provided in prior years for natural disasters, and is now available to eligible MERS Defined Contribution, 457 Program, and IRA participants.
- To be eligible, the distribution must be made to a “qualified individual” – meaning a person who is diagnosed with the disease, has a spouse or dependent who is diagnosed, or has experienced adverse financial consequences as a result of the disease. Participants may self-certify their eligibility.
- In addition, defined contribution participants must also comply with the otherwise applicable in-service distribution rules, which require that an in-service distribution not be issued prior to the participant turning age 59½.
- Unless the participant elects to pay the income tax all in 2020, they should include a CRD in their taxable income over three years (in 2020, 2021 and 2022). Note: Regardless of how choose to pay the income tax, MERS will only report one 1099R for 2020.
- The distribution must be made on or after Jan. 1, 2020, and before December 31, 2020. The maximum amount for an individual is $100,000 from all plans and IRAs.
- The mandatory 20% withholding and requirement to provide a 402(f) notice, which normally apply to eligible rollover distributions, are waived for a CRD.
- To enable participants to restore their retirement savings, the law allows the distribution to be repaid to the plan or IRA during the three-year period beginning on the day after the date the distribution is made. In that case, the repayment is treated similar to a rollover.
Note: Expired as of 12/31/2020
For plans that allow loans to participants, for new loans to qualified individuals between March 27 and September 22, 2020, the maximum loan amount was increased to 100% of the vested account balance or $100,000, whichever is less. (Previously capped at 50% of vested account balance or $50,000.) For existing loans, payments due between March 27, 2020, and December 31, 2020, can be suspended for one year. If participants do not make payments during this time, the loan will be re-amortized upon the expiration of this period.
To be eligible for the loan relief described in this section, a participant must meet the same eligibility criteria noted above for CRDs. As of right now, participants may self-certify eligibility, pending further guidance. (The self-certification is not specific to loans, but most are interpreting it to allow it.)
Required Minimum Distributions
RMDs to be paid during 2020 are waived for all types of defined contribution plans, including 401(a), 401(k), 403(b), and governmental 457(b) plans, as well as IRAs. This allows RMD-eligible participants to preserve their retirement savings for this period. However, no RMD waiver is available for defined benefit plans.
Rehire Retiree Guidelines
To assist employers with filling open positions due to labor shortages or increased needs arising from COVID-19 related factors, there will be a temporary adjustment to MERS rehired retiree requirements. Retirees who return to work due to employer need will not have their pension benefits suspended if they exceed the 1,000 hour limit during 2021; this waiver will expire as of 12/31/2021 or earlier, if requested by the employer. The bona fide separation of 60-days is applicable and a Working in Retirement certification (form 29c) is required to be on file.
Temporary Employer Workforce Accommodations
To offer additional flexibility during this unusual time, MERS will accept and administer temporary modifications to definitions of service credit qualification and definition of compensation. To notify MERS of your intent to modify benefits temporarily, please complete, sign and return to MERS the Temporary Modification of Benefit Provisions (form DB-c19). Note: The previous adoption of this temporary benefit provision expired as of 12/31/2020; this version is applicable for the period beginning January 1, 2021 through 12/31/2021. Employers who would like to make temporary benefit modification changes are required to complete and return this updated version.
EMPLOYER COVID-19 FAQS
Michigan’s Work Share program allows employers to restart their business and bring employees back from unemployment. Employers can bring employees back with reduced hours while employees collect partial unemployment benefits to make up a portion of the lost wages. Employers can also retain their current workforce and are given the flexibility to choose which of their employees are part of the Work Share plan. For employers who choose to participate in the state’s program, employees are not considered terminated.
The MERS Plan Document does not specify how service and contributions may be impacted for this unique circumstance and therefore, MERS is unable to issue specific guidance to employers on the requirements of the Michigan Work Share program. As the program does reference impacts to employers fringe benefits, MERS encourages participating employers to consult tax or benefit professionals to determine what impacts this program has on benefits like pension, health and deferred compensation for your organization. Based on that determination, MERS will provide instructions for monthly wage and contribution reporting tools.
Instructions or support for reporting within these elections should be directed to the MERS Service Center at 800-767-MERS. Questions about the Michigan Work Share program should be directed to Michigan’s Unemployment Insurance Agency.
You can temporarily modify your day of work definition to reduce the number of hours an eligible employee must work in order to earn service credit. To modify this provision, please contact your Benefit Plan Coordinator and refer to the Temporary Modification of Benefit Provisions (form DB-c19).
Once this provision has been modified, payroll reporting contacts can award service credit within the Employer Portal. They should also place a note in the Note Field for the reporting month, with ‘Hour adjustment / COVID-19’.
The answer depends on your definition of compensation. The plan’s definition of compensation is used to calculate a participant’s FAC and is used in determining both employer and employee contributions. Wages paid to employees, calculated using the elected definition must be reported to MERS.
In addition, you can temporarily modify your definition of compensation to specifically include sick time or FMLA related to COVID-19. For questions on your definition of compensation, or to modify this provision, please contact your Benefit Plan Coordinator and refer to the Temporary Modification of Benefit Provisions (form DB-c19).
Once this provision has been modified, payroll reporting contacts should report a wage discrepancy code of Other and place a note in the Note Field for the reporting month, with ‘Hour adjustment / COVID-19.’
The MERS Retirement Board approved waiving the 1,000 hour suspension for any rehired retiree who meets the 60-day separation between last day worked and returning work day. Employers are asked to continue reporting those who are returning, including providing a Working in Retirement certification form for MERS records. Suspension on retirement payments will be lifted for this year.
Note: Expired as of 12/31/2020
The Coronavirus Aid, Relief and Economic Security (CARES) Act provides that if a participant who is a “qualified individual” takes a coronavirus-related distribution from a 401(a), 403(b), government 457 or IRA between January 1 – December 31, 2020, of up to $100,000, it will not be subject to the 10% early distributions tax penalty.
A “qualified individual” is an individual who:
- Has COVID-19 or has a spouse or dependent who has COVID-19, or
- Has suffered financial consequences as a result of the pandemic (being unable to work due to lack of child care due to COVID-19 or being unable to work due to closing or reducing hours of a business owned or operated by the individual due to COVID-19), or other factors as IRS may determine
The MERS Retirement Board has approved in-service distributions for those who meet the definition of a Qualified Individual as follows:
- You are a participant who is still actively employed in the MERS Defined Contribution Plan and are at least age 59½
- You are a participant who is still actively employed in the MERS 457 Program
- You are no longer actively employed with a MERS municipality and still have an account balance with MERS Defined Contribution Plan or 457 Program
- You have a MERS IRA
These distributions do not require employer approval, the participant requesting provides a self-certification meeting the definition of Qualified Individual.
Note: Expired as of 12/31/2020
If your local unit of government allows for loans under the Defined Contribution or 457 Program, the CARES Act allows qualified individuals to extend the due date for the repayment of a loan up to one year on any outstanding loan with a payment due between March 27, 2020 − December 31, 2020.
See Participant FAQ for loan repayment suspension information.
Here are some resources that may assist you:
Michigan Municipal League: http://blogs.mml.org/wp/coronavirus/
Michigan Township Associations: https://www.michigantownships.org/coronavirus.asp
Michigan Association of Counties: https://micounties.org/resources-for-coronavirus-response/
Yes. Over-the-counter (OTC) items, including menstrual products, are now considered an eligible expense without a prescription using Health Care Savings Program (HCSP) funds under the CARES Act.
This change is effective for expenses incurred on or after January 1, 2020. If a participant previously submitted a claim for reimbursement for an OTC item and was denied, they can resubmit the claim online through the Claims Management portal or via the mobile app. At this time, these are the only methods in which reimbursement requests can be submitted.
For Health Benefits debit card swipes, our partners – Alerus and Wexhealth – are working to get merchant codes updated in order for these items to be approved for purchase via debit card. Implementation of the new eligible item list will occur gradually over the next 4-6 weeks. Please note that each merchant will have their own timeline for completion of this process, and card processors like WexHealth have no ability to influence this.
While we encourage the governing body to meet remotely to approve this form, MERS will process the change upon receipt of the Temporary change form as long as it is signed by an authorized signer (if one on file), or by a primary contact if the board later ratifies it when it meets. If the minutes/authorized signer-signed form is not collected within 60 days from receipt, the processed change will be reversed/cancelled. For reporting purposes, MERS systems do allow for corrected reporting if changes are made and apply retroactively, so if a governing body is not meeting until May, for example, changes made in May can be applied retroactively to March and April.
An employee that is laid off is not considered an active employee and should be reported as terminated and are not eligible to earn service as defined by the MERS plan document. An employee layoff is not the same as reduced hours or employees on “furlough” or a situation where an employee is on paid or unpaid leave. If the employee is terminated and receiving unemployment, there is no ability to earn service credit. If the employee is on paid or unpaid leave, service can be granted if the employer elects to do so. Please note that all employees in the division must be treated the same.
MERS no longer requires enrollment forms to be returned to MERS. For purposes of reporting new hires, employers should follow the “new application” process or defined benefit and for participant directed account products (DC, 457, HCSP), add new hires to their upload file at the time of their regular reporting. If assistance is needed, please visit MERS Reporting Contact resource pages on our website, or contact MERS Service Center at 800-767-MERS.
Typically, lump sums for hazard pay are not includible for wage reporting under MERS. Employers may adopt a temporary benefit provision to include lump sums of hazard pay related to the COVID-19 pandemic; the temporary period applies only for reporting through December 2020. For reporting purposes, to distinguish this pay from standard pay employers should use the “notes” field to specify ““Lump Sum / COVID-19”. Employers who wish to amend their DB plan to permanently include this in their definition of compensation should complete a revised DB Adoption Agreement to specify this. Please contact your MERS Benefit Plan Coordinator to temporarily or permanently revise your definition of compensation.