Hybrid Plan

HELPING YOU STAY ON THE RIGHT RETIREMENT TRACK

When you planned for your retirement you dreamed it would be worry free, and in your control. As a retired member of MERS Hybrid Plan, you have the best of both worlds — the stability and security of a defined benefit plan, combined with the flexibility and investment choice of a defined contribution plan.

As a MERS Hybrid Plan retiree, you receive both a lifetime benefit (Hybrid Part I) and a separate account you manage (Hybrid Part II).

How It Works

Your Hybrid Part I — defined benefit portion is based on the number of years you’ve worked, your salary, and a multiplier selected by your employer. This benefit doesn’t fluctuate due to investment gains or losses in the market.

Your Hybrid Part II — defined contribution portion, offers you 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

Hybrid Part II Distributions

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.

Hybrid Part II 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 (RMD). 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 (if 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 Hybrid 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.

Working in Retirement

If you retire and later decide to return to the workplace, your pension benefits can be affected under certain conditions. There are no restrictions if you are hired anywhere other than the municipality you retired from.
If you rehire at the municipality you retired from, certain rules apply.

Taxability of MERS Benefits

Federal income tax, and under certain conditions, state tax is required on your MERS pension, with the exception of any post-tax employee contributions you may have made.

You choose how you want your taxes to be withheld at the time of your first payment. You may change your tax choice at any time.

To make tax changes with the Hybrid Part I (Defined Benefit) portion of your plan, log in to your myPension online account.

To make tax changes with the Hybrid Part II (Defined Contribution) portion of your plan, log in to your Empower online account.

Resources

Online Access

Want to change your investments, or your named beneficiary? Sign in to your online account.

Learn More

For more information view the

Hybrid Handbook