Vesting (Service) Calculation for Defined Contribution portion of Hybrid Moving to Elapsed Time
Unless otherwise adopted by the employer, Defined Contribution Plans will 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. Participant who were terminated prior to 10/2015, 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.
MERS-to-MERS Service Coordination for Defined Contribution Portion of Hybrid
In order for employees to verify MERS-to-MERS time to include it as part of their DC service, they will need to contact MERS at 1.800.767.6377 or fill out and submit the MERS-to-MERS Service Verification Form. MERS-to-MERS time will only apply before a DC distribution is taken or a forfeiture occurs, ensuring that employers will not incur future liabilities.
Forfeiture Rule for Defined Contribution Portion of Hybrid
It is the policy of MERS to initiate a forfeiture of non-vested funds from previous employees after a period of five years has passed from the date of termination.
Please note that as of 1/1/2017, the policy will reflect the following: 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 four times per year – February, May, July and November.
Submitting New Hire Information to MERS
Employers can enroll new hires in the Defined Contribution portion of Hybrid by simply adding them to their payroll file. For more information on the new hire communication process, select your program and go to the administrative page.
New Process to Submit New Hire Information to MERS
Employers can now enroll new hires in DC portion of Hybrid by simply adding them to their payroll file.
Reduced Administrative Time to Input Beneficiary Information
As of October 13, MERS will no longer require employers to input beneficiary information for new hires enrolling in Defined Contribution (including the DC portion of Hybrid), 457 and Health Care Savings Program into the Employer Portal. Instead, once a new hire has been added to your municipality’s payroll file, MERS will mail participants their beneficiary forms along with other plan-related information. Participants will return the completed forms to MERS and we will update their record.
DC Wage Upload Template (csv)
DC Upload Schema File (pdf)
Note: The schema file can be shared with your payroll company to provide a description, length and format for each field of the wage template.
Note: The following fields are required: MERS Plan Number, Social Security Number, Last/First Name, Address, City, State, Zip, Date of Birth, Date of Hire and Participant Status. If you are reporting a participant status change to Terminated (T), then a date of termination is required. If the participant is a rehire and previously was in terminated status, then the date of rehire is required.