All regular full-time employees will be automatically enrolled in a defined benefit pension plan administered by Municipal Employees’ Retirement System (MERS). Participation in the pension program is mandatory.
What is a Defined Benefit?
A defined benefit pension plan is a type of pension plan that provides a fixed, pre-established benefit for employees at retirement based on their final average compensation (FAC), service credit and benefit multiplier. The defined benefit formula is as follows:
FAC x Service Credit x Benefit Multiplier = Annual Benefit
Benefit Details
Employees hired before 01/01/2012:
- Benefit multiplier: 2.25%
- Final average compensation (FAC): 3 highest consecutive years
- Vesting: 8 years
- Retirement eligibility: 55/25
- Employee contribution: 7% of gross pay
- Other: E-2 COLA
Employees hired after 01/01/2012:
- Benefit multiplier: 1.5%
- Final average compensation (FAC): 3 highest consecutive years
- Vesting: 8 years
- Retirement eligibility: 60
- Employee contribution: 5% of gross pay
myMERS
The myMERS portal is a secure online tool that allows employees to manage account balances, review beneficiary information, retrieve statements and obtain forms. We strongly encourage employees to register for a myMERS account.
Deferred Compensation
WCRC offers supplemental, voluntary savings options to employees for retirement. The MERS 457 Program is designed specifically for public sector employees. The program offers you an invested account you manage, in which a portion of your salary is contributed and invested for use after you leave employment. You decide to participate, how much to contribute, and how to invest your assets conveniently through payroll deductions. When you leave employment, your benefit is based on the total amount of money in your account. These voluntary contributions can be changed at any time.
Contribution Limits
| Plan | Maximum Contribution | Age-50 Catch-Up | Pre-Retirement Catch-Up |
| 457 | $23,000 | $7,500 | $30,500 |
Enrollment
Representatives from ICMA-RC and MERS are available to meet with employees at the spring luncheon and pancake breakfast each year. Employees can enroll in a plan with either company at any time by completing an enrollment form and submitting it to HR.
Roth or Pre-Tax
Trying to decide between Roth and a pre-tax contribution?
Pre-Tax
With a pre-tax election, you make contributions from your pay check BEFORE any taxes are taken out, so you get a tax break up front, helping to lower your current income tax bill and putting more money into your investment account to earn dividends.
Your money – both contributions and earnings – grow tax-deferred through investment gains over time until you withdraw them. At that time, withdrawals are considered to be ordinary income and taxed at the current rate when withdrawn.
Roth Savings
With a Roth contribution, it’s basically the reverse. You make your contributions with after-tax dollars, meaning there’s no upfront tax deduction. However, withdrawals of both contributions and investment earnings are tax-free at age 59 1/2, as long as you’ve held the account for at least five years.
So it all comes down to deciding when it’s better for you to pay the taxes – now or later.
Helpful Links
Related Documents
MERS 457 Supplemental Retirement Program
Change Your Beneficiaries Online
Rollover Guide
Related Forms
MERS 457 Enrollment Kit
Incoming Transfer Form
Deferred Compensation Contribution Change Form
