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.Please note that 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
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.
On March 27, 2020, the president signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). This aid package provides financial aid to families and businesses impacted by the COVID-19 pandemic.
The CARES Act included early access for distributions from individuals’ defined contribution, 457 and IRA accounts and loan relief for “qualified individuals” through 12/31/2020
Qualified Individuals who received a Coronavirus-Related-Distribution will receive a 1099-R reflecting the amount they received in January which they will use to file their individual income taxes. In addition, the federal government requires individuals complete an exemption, IRS Form 8915-E, to file with their taxes – See question on “When do I have to pay taxes on coronavirus-related distributions?” FAQ below
This portion of the CARES Act states that those who are required to take required minimum distributions (RMDs) are not obligated to do so for 2020. This includes 2019 RMDs which normally would be due by April 1, 2020.
Note: Because MERS’ recordkeeper, Alerus, had processed 2019 distributions after January 1, 2020, but before the CARES Act was passed, you can roll the distribution amount within 60 days to an employer plan or IRA. Doing so will offset the taxable distribution.
As a part of the CARES Act, over-the-counter (OTC) drugs, including menstrual products, are now deemed an eligible expense when using your MERS Health Care Savings Program (HCSP) account.
This change is effective for expenses incurred on or after January 1, 2020. If you previously submitted a claim for an OTC item you purchased since that time and was denied, you can resubmit the claim online through the Claims Management portal in myMERS or via the mobile app. You are able to use your Health Benefits debit card to cover these OTC expenses.
Some vendors may not have their coding updated to comply with this regulatory change, if you find your transaction is declined, please purchase the item using an alternative method and submit your receipt for reimbursement.
There are some options available if you have an outstanding loan and, due to job loss, may be required to repay the remaining amount due in full immediately, as required by the terms of the loan. MERS cannot advise you on this and we encourage consultation with a tax professional.
These options include:
- If you do not repay the outstanding amount in full immediately, default occurs and the outstanding amount is considered a distribution. If that occurs before December 31, 2020, and you are a qualified individual as defined by the CARES Act, you may be able to claim the amount of that distribution as a coronavirus-related-distribution (CRD), in which case the terms of a CRD described above would apply (ability to repay, and applicable taxes due over a three-year period).
- If you are a qualified individual you can use the Loan Repayment Application for Qualified Individuals to request a delay in paying the immediately due repayment. Doing so means that the outstanding balance (with interest continuing to accrue) would be due no later than one year from the date of termination. If, by then, the outstanding balance is not paid in full (including the interest that continued to accrue), the loan will default and the unpaid amount will be considered a distribution. You will owe the 10% early distribution penalty (if applicable), all the taxes will be due with 2021 return, and the option to rollover or repay it will not be available.
Because CRD’s cannot be rolled over to other plans or to IRAs, the mandatory 20% federal tax withholding did not apply to them. The 10% penalty for early distributions is waived when MERS Plan eligibility was met. Regular 10% income tax withholding was applied to retirement plan distributions, unless your form indicated an opt-out election of that withholding. This information was reported out on your 1099 issued to you in January.
The distributions generally are included in income ratably over a three-year period, starting with the year in which you receive your distribution. For example, if you receive a $9,000 coronavirus-related distribution in 2020, you would report $3,000 in income on your federal income tax return for each of 2020, 2021, and 2022. However, you have the option of including the entire distribution in your income for the year of the distribution.
A coronavirus-related distribution should be reported on your individual federal income tax return for 2020. You must include the taxable portion of the distribution in income ratably over the 3-year period – 2020, 2021, and 2022 – unless you elect to include the entire amount in income in 2020. Whether or not you are required to file a federal income tax return, you would use IRS Form 8915-E to report any repayment of a coronavirus-related distribution and to determine the amount of any coronavirus-related distribution includible in income for a year.
In other words, taxes have to be either paid all in 2020, or it has to be spread evenly over three years – 2020, 2021 and 2022. There are no other options.