Defined Contribution Plan

KEEPING YOU ON THE RIGHT ROAD IN RETIREMENT

You’ve worked hard for your money, and now that you’re in retirement, you can let your money work for you. Your MERS Defined Contribution Plan can be an important source of your income, and a great way to stay on the right road in retirement.

As a retired member, you have an invested account you manage, with flexibility and investment choice.

How It Works

As a MERS Defined Contribution Plan retiree, you have a variety of options on how to use your account. You can leave your account invested with MERS, roll your funds into an eligible plan, or take distributions.

By keeping your account in the MERS Defined Contribution Plan, you’ll continue to receive the benefits of MERS Investment Menu, low administrative fees, and excellent customer service.

Distributions/Withdrawals

Once you’ve retired, there are different ways to receive payments from your Defined Contribution account — payment intervals (installments), or one-time lump sums.

The MERS team at Empower will support you through the withdrawal process. Call 833.500.6377.

Please note that all withdrawals are taxable in the calendar year you receive the money. We are also required to apply mandatory withholding for federal or any applicable state income taxes, although in some instances you may opt out of this withholding.

If you are married and your vested balance is equal to or more than $1,000, you must choose the Qualified Joint and Survivor Annuity, unless your spouse consents in writing to another form of payment.

Required Minimum Distributions

After you have terminated employment and reached age 73, you (or your beneficiary) must begin taking minimum distributions from your plan every year. This IRS mandatory withdrawal is called a Required Minimum Distribution. Your initial distribution can be deferred until April 1 of the following year if you’ve reached the age 73 (if you were born 1/1/1951 or after), age 72 (f you were born before 1/1/1951), or age 70½ (if you were born before 7/1/49); unless you have recently left your employment. If so, next year you’ll receive your distribution by April 1 and at the end of the year to cover the current year.

Example: You turn age 72 in August 2022. You defer your first required distribution until April 2023. Your second required distribution will occur by December 2023. Your distribution is subject to income tax withholding. If you do not take your required minimum distribution when required, there is a significant IRS penalty.

For more information about your distribution options, please see the MERS Defined Contribution Plan Member Handbook.

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.

Insurance Premium Option Public Safety Officers

If you are a former public safety officer as defined by the IRS*, you may be eligible for a tax exemption when using funds in your DC account. Please consult a tax professional.

* A public safety officer as defined by the IRS is an individual serving a public agency in an official capacity, with or without compensation, as a law enforcement officer, as a firefighter, as a chaplain, or as a member of a rescue squad or ambulance crew.

Working in Retirement

MERS defines a “retiree” for Defined Contribution has someone who has separated from employment at or after normal retirement age (generally, this is age 60, employers may have adopted a different age). This means that you can begin taking distributions from your account at any time without tax penalty for early distributions.

After you have left employment, if you find yourself considering a rehired position with the same employer, note that you must have a bona fide separation of employment and the separation must be at least 60 days. If you are rehired into the same covered position, your employer will re-enroll you in the same plan and you will be subject to the required contributions in that division. While your service will pick up any previous employment to be used toward vesting in your rehired plan, any previously forfeited assets are not subject to reinstatement.

If you were previously taking distributions from your account, or if you have need to do so after returning to work, you may do so by requesting an In-Service distribution.