Understanding Your Investment Choices
The MERS Retiree Health Funding Vehicle (RHFV) helps employers set aside assets for funding their Other Post-Employment Benefits (OPEB) liability, while benefiting from investing in MERS investment options. As the fiduciary, MERS is responsible for determining available investment options for the plan. Over time, and in direct response to feedback from our members, MERS has expanded the RHFV investment menu to provide a greater variety of options.
Default Investment Menu
Another part of our fiduciary role is to ensure the RHFV program complies with state and federal laws. To ensure we stay in line with the Public Employee Retirement System Investment Act (PERSIA) and best practices, MERS has established the Total Market Fund as the default fund for the program.
Employers whose assets remain in the default fund enjoy peace of mind knowing that MERS will retain sole fiduciary responsibility for the investment of assets in the default fund.
Additional Investment Options
If you wish to have the flexibility to invest assets outside of the Total Market Fund, MERS will retain the fiduciary duties of determining investment options and monitoring fund performance, but the fiduciary responsibility for the investment of your RHFV assets according to PERSIA will reside with you. You must follow PERSIA requirements as established for the size of your assets, thereby excluding investment in the Total Market Fund.
These proprietary portfolios are overseen by the MERS Office of Investments and offer attractive risk-adjusted returns at below market cost, thanks to the economies of scale created by the MERS defined benefit portfolio. MERS uses both internal and external institutional investment managers to build these professionally managed portfolios, each of which has a target asset allocation that is rebalanced on a quarterly basis. Each portfolio has an allocation of stocks/bonds (in parenthesis below).
MERS Global Stock Portfolio (100/0)
MERS Established Market Portfolio (60/40)
MERS Diversified Bond Portfolio (0/100)
Funds to Build Your Own Portfolio
You also have access to selected funds to help you build your own portfolio, including include several broad market index funds.
Large Cap Stock Index
Mid Cap Stock Index
Small Cap Stock Index
Real Estate Stock
Bond Index
High Yield Bond
International Stock Index
Emerging Market Stock
Short-Term Income