Defined Contribution Plan

What is the MERS Defined Contribution (DC) Plan?

The MERS Defined Contribution (DC) Plan is a qualified pension plan under Section 401(a) of the Internal Revenue Code. This allows you and your employer to make pre-tax contributions to your individual account, which accumulate tax-deferred.

If you are like many of our members, this plan is an important source of your retirement income. All of your contributions and your employer’s contributions are deposited into your individual account and are invested under your direction. Your future retirement benefit is determined by your account balance, which is affected by how much is contributed, the performance of your investments, and how many years you have been saving.

How It Works

Your DC Plan is made of vested employer contributions plus employee contributions plus earnings or losses in the market minus fees equaling your total account balance

Employer Contributions:

Made pre-tax
Not taxable until withdrawn from the plan
May be subject to vesting

Employee Contributions:

Made pre-tax
May be a set dollar amount or percentage of pay
If you are offered the option to elect how much to contribute for your required employee contributions when you are hired, please note that this is a one-time election and cannot be changed
You may be able to make additional after-tax payroll contributions that can be stopped or started at any time

MERS Investments

The MERS Defined Contribution Plan is a participant-directed account, meaning you take an active role in determining your financial goals, making investment choices, and monitoring your portfolio. The decisions you make today will affect the results you see tomorrow.

Please remember, it’s always a good idea for you to review your investment options on a regular basis because investment objectives can change due to changes in your life circumstances, risk tolerances, or finances.

For more information, please read Understanding the MERS Investment Menu.

Vesting

Vesting occurs when you have earned the required amount of service to be eligible to receive the employer contribution portion of your account. You may lose some or all of the employer contribution portion of your account if you leave your job before you have worked long enough to be vested. However, once vested, you have the right to receive the vested employer contribution portion of your account when you leave employment. You are always 100% vested in the employee contribution portion of your account.

MERS-to-MERS Service and Act 88 may also help you vest if you have worked for another MERS employer. These may have eligibility requirements. Learn more about vesting in the DC Handbook.