Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Moya/Garratt/Baca/Gonzales, A.
LAST UPDATED 2/10/2025
ORIGINAL DATE 2
/08/2025
SHORT TITLE
Ed. Retirees Returning To Work Time
Period
BILL
NUMBER House Bill 254
ANALYST Hanika-Ortiz
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 *FY26 *FY27
*3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
Educational
Retirement
No fiscal impact
At least
$4,000.0
At least
$4,120.0
At least
$8,120.0
Recurring ERB Trust Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Conflicts with Senate Bill 133/aSEC and relates to Senate Bills 165, 251, and 292.
*The impact is based on actuarial assumptions including payroll growth and rate of retirement.
Sources of Information
LFC Files
Agency Analysis Received From Educational Retirement Board (ERB) New Mexico’s Independent Community Colleges (NMICC) Public Education Department (PED)
SUMMARY
Synopsis of House Bill 254
House Bill 254 (HB254) increases the time limit for one of the Education Retirement Board’s
return to work programs from a maximum of 36 months to a new maximum of 84 months (7
years).
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns if enacted, or June 20, 2025.
FISCAL IMPLICATIONS
The Educational Retirement Board (ERB) believes the changes will have a material negative
impact on plan funding.
House Bill 254 – Page 2
ERB’s actuaries measured the impact of the bill as of the June 30, 2024 valuation. As ERB
explains, if the program experiences an increase in retirement rates by 0.20 percent in year one,
the actuarial accrued liability increases by $4 million per year and increases each year thereafter
with payroll growth. ERB cautioned that this amount should not be considered an upper limit on
the impact to funding as the actual impact on retirement rates may not be known for several
years. To reduce the negative impact, however, ERB suggests increasing the time a retiree may
work after retirement to 48 months or 60 months, and only for those currently in the 36-month
program.
SIGNIFICANT ISSUES
Under normal circumstances, ERB retirees wait 90 consecutive days before reentering the
workforce with an ERB-affiliated employer. These retirees may work for up to 36 non-
consecutive months while continuing to receive retirement benefits. During the reemployment
period, both retirees and employers must make non-refundable contributions to ensure the fund
remains stable.
ADMINISTRATIVE IMPLICATIONS
ERB will modify its IT system to account for the change from 36 months to 84 months.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
This bill conflicts with Senate Bill 133/aSEC Educational Retirees Returning to Work Time
Period, which increases the time a retiree may work after retirement to 60 months and raises the
maximum amount a retiree may earn to $25 thousand, without suspending retirement benefits.
This bill relates to Senate Bill 165 Return to Work for Lifeguards, which adds conditions under
the Public Employees Retirement Act, alongside other public safety positions.
This bill relates to Senate Bill 251 Certain Retirees Returning to Work, which expands definition
of “peace officer,” under the Public Employees Retirement Act.
This bill relates to Senate Bill 292 Protective Service Workers Returning to Work, which adds
conditions under the Public Employees Retirement Act, alongside other public safety positions.
OTHER SUBSTANT IVE ISSUES
Return-to-work programs help retirees stay engaged and contribute their expertise in a
temporary, part-time or flexible capacity. One of the critical aspects of return-to-work programs
is that the re-employment provisions must not have a negative impact on the trust fund. Article
XX, Section 22 of the New Mexico Constitution prohibits the Legislature from enacting any law
that increases the benefits paid unless adequate funding is provided. This section also assigns
ERB the sole and exclusive power to adopt actuarial assumptions, using an independent actuary
of its choosing.
House Bill 254 – Page 3
ALTERNATIVES
To address an educator shortfall, PED could work with ERB on solutions that do not impact the
fund, until initiatives to attract teachers and financial incentives to retain them come to fruition.
AHO/sgs/SR