HB 251
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AN ACT
RELATING TO EDUCATIONAL RETIREMENT; PROVIDING ADDITIONAL
OPTIONS TO CHANGE THE BENEFICIARY FOR RETIRED MEMBERS WHO
HAVE DESIGNATED A SPOUSE AS A BENEFICIARY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 22-11-29 NMSA 1978 (being Laws 1967,
Chapter 16, Section 152, as amended) is amended to read:
"22-11-29. RETIREMENT BENEFIT OPTIONS.--
A. Upon retirement pursuant to the Educational
Retirement Act, a member may elect, and, except as provided
in Subsection D, E or F of this section, such election shall
be irrevocable, to receive the actuarial equivalent of the
member's retirement benefit, as provided in Section 22-11-30
NMSA 1978, to be effective on the member's retirement in any
one of the following optional forms:
(1) OPTION A. An unreduced retirement
benefit pursuant to Section 22-11-30 NMSA 1978;
(2) OPTION B. A reduced annuity payable
during the member's life with provision that upon the
member's death the same annuity shall be continued during the
life of and paid to the beneficiary designated by the member
in writing at the time of electing this option; or
(3) OPTION C. A reduced annuity payable
during the member's life with provision that upon the HB 251
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member's death one-half of this same annuity shall be
continued during the life of and paid to the beneficiary
designated by the member in writing at the time of electing
this option.
B. In the case of Options B and C of Subsection A
of this section, the actuarial equivalent of the member's
retirement benefit shall be computed on the basis of the
lives of both the member and the beneficiary or in the event
that a supplemental needs trust is the designated
beneficiary, the life of the member and the beneficiary of
that trust.
C. In the event that the named beneficiary of a
retired member who elected Option B or C of Subsection A of
this section at the time of retirement predeceases the
retired member or the supplemental needs trust terminates
while the retired member is living, the annuity of the
retired member shall be adjusted by adding an amount equal to
the amount by which the annuity of the retired member was
reduced at retirement as a result of the election of Option B
or C of Subsection A of this section. The adjustment
authorized in this subsection shall be made as follows:
(1) beginning on the first month following
the month in which the named beneficiary of a retiree dies or
the beneficiary of a supplemental needs trust that is the
named beneficiary dies or that trust otherwise terminates HB 251
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applicable to an annuity received by a retiree who retires
after June 30, 1987; or
(2) beginning on July 1, 1987 applicable to
an annuity received by a retiree who retired prior to July 1,
1987 and otherwise qualifies for the adjustment; provided,
however, no adjustment shall be made retroactively.
D. A retired member who is being paid an adjusted
annuity pursuant to Subsection C of this section because of
the death of the named beneficiary or the death of the
beneficiary of a supplemental needs trust or the termination
of that trust may exercise a one-time irrevocable option to
designate another beneficiary and may select either Option B
or Option C of Subsection A of this section; provided that:
(1) the amount of the annuity under the
option selected shall be recalculated and have the same
actuarial present value, computed on the effective date of
the designation, as the annuity being paid to the retired
member prior to the designation;
(2) the designation and the amount of the
annuity shall be subject to a court order as provided for in
Subsection B of Section 22-11-42 NMSA 1978; and
(3) the retired member shall pay one hundred
dollars ($100) to the board to defray the cost of determining
the new annuity amount.
E. A retired member who is being paid an annuity HB 251
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under Option B or C of Subsection A of this section with a
living or operating designated beneficiary other than the
retired member's spouse or former spouse or the supplemental
needs trust of the retired member's spouse or former spouse
may exercise a one-time irrevocable option to deselect the
designated beneficiary and elect to:
(1) designate another beneficiary; provided
that:
(a) the retired member shall not have
an option to change from the current form of payment;
(b) the amount of the annuity under the
form of payment shall be recalculated and shall have the same
actuarial present value, computed on the effective date of
the designation, as the amount of annuity paid prior to the
designation; and
(c) the retired member shall pay one
hundred dollars ($100) to the board to defray the cost of
determining the new annuity amount; or
(2) have future annuity payments made
without a reduction as a result of Option B or C of
Subsection A of this section.
F. A retired member who is being paid an annuity
under Option B or C of Subsection A of this section with the
member's spouse as the designated beneficiary may exercise a
one-time irrevocable option to deselect the designated HB 251
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beneficiary and elect to:
(1) designate another beneficiary; provided
that:
(a) the retired member shall not have
an option to change from the current form of payment;
(b) the amount of the annuity under the
form of payment shall be recalculated and shall have the same
actuarial present value, computed as of the effective date of
the designation, as the amount of annuity paid prior to the
designation;
(c) the retired member's spouse
provides a notarized, written statement expressing the
spouse's consent to relinquish the designation as a
beneficiary; and
(d) the retired member shall pay one
hundred dollars ($100) to the board to defray the cost of
determining the new annuity amount;
(2) have the future annuity payments made
without a reduction as a result of Option B or C of
Subsection A of this section;
(3) upon becoming divorced from the named
spouse and subject to an order of a court as provided for in
Subsection B of Section 22-11-42 NMSA 1978, elect to have
future annuity payments made under retirement benefit Option
A of Subsection A of this section; HB 251
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(4) upon becoming divorced from the named
spouse, exercise a one-time irrevocable option to designate
another beneficiary; provided that:
(a) the retired member shall not have
an option to change from the current form of payment;
(b) the amount of the annuity under the
form of payment selected shall be recalculated and shall have
the same actuarial present value, computed as of the
effective date of the designation, as the amount of annuity
paid prior to the designation;
(c) the designation and the amount of
the annuity shall be subject to a court order as provided for
in Subsection B of Section 22-11-42 NMSA 1978; and
(d) the retired member shall pay one
hundred dollars ($100) to the board to defray the cost of
determining the new annuity amount; or
(5) have the future annuity payments made
without a reduction as a result of Option B or C of
Subsection A of this section.
G. In the event of the death of the member who has
not retired and who has completed at least five years' earned
service credit, the member shall be considered as retiring on
the first day of the month following the date of death, and
the benefits due the surviving beneficiary, computed on that
date, shall, except as provided in Subsection K of this HB 251
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section, be commenced effective on the first day of such
month in accordance with the terms of Option B of Subsection
A of this section. In lieu of the provisions of Option B,
the surviving beneficiary may elect to receive payment of all
the contributions made by the member, plus interest at the
rate set by the board reduced by the sum of any disability
benefits previously received by the member, or the surviving
beneficiary may choose to defer receipt of the survivor's
benefit to whatever age the beneficiary chooses up to the
time the member would have attained age sixty. If the
benefit is thus deferred, it shall be calculated as though
the member had retired on the first day of the month in which
the beneficiary elects to receive the benefit. In the event
of the death of the beneficiary or in the event that a
supplemental needs trust is the designated survivor
beneficiary, the termination of that trust or the death of
the beneficiary of that trust after the death of the member
and prior to the date on which the beneficiary has elected to
receive the beneficiary's benefit, the estate of the
beneficiary shall be entitled to a refund of the member's
contributions plus interest at the rate earned by the fund
during the preceding fiscal year, reduced by the sum of any
disability benefits previously received by the member.
H. In the event of the death of a member who has
not retired and who has completed at least five years' earned HB 251
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service credit, but who has not designated a beneficiary in
writing pursuant to the Educational Retirement Act, the
eligible surviving spouse or surviving domestic partner shall
be the surviving beneficiary eligible for benefits in
accordance with the provisions of Subsection G of this
section.
I. In the case of death of a retired member who
did not elect either Option B or C of Subsection A of this
section and before the benefits paid to the member have
equaled the sum of the member's accumulated contributions to
the fund plus accumulated interest at the rate set by the
board, the balance shall be paid to the beneficiary
designated in writing to the director by the member or, if no
beneficiary was designated, to the eligible surviving spouse
or surviving domestic partner of the member or, if there is
no eligible surviving spouse or domestic partner of the
member, to the estate of the member.
J. No benefit shall be paid pursuant to this
section if the member's contributions have been refunded
pursuant to Section 22-11-15 NMSA 1978.
K. In the case of death of a member with less than
five years' earned service credit or death of a member who has
filed with the director a notice rejecting the provisions of
Subsection G of this section, which notice shall be revocable
by the member at any time prior to retirement, the member's HB 251
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contributions to the fund plus interest at the rate set by the
board shall be paid to the beneficiary designated in writing
to the director by the member or, if no beneficiary was
designated, to the eligible surviving spouse or surviving
domestic partner of the member or, if there is no eligible
surviving spouse or domestic partner of the member, to the
estate of the member."