New Mexico 2025 Regular Session

New Mexico House Bill HB96 Compare Versions

Only one version of the bill is available at this time.

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28	28	HOUSE BILL 96
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30	30	TH LEGISLATURE
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33	33	STATE
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35	35	OF
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39	39	MEXICO
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42	42	FIRST SESSION
43	43	,
44	44
45	45	2025
46	46	INTRODUCED BY
47	47	Joseph L. Sanchez
48	48	AN ACT
49	49	RELATING TO PUBLIC EMPLOYEE PENSIONS; PROVIDING A TEMPORARY,
50	50	ADDITIONAL, NON-COMPOUNDING PAYMENT TO RETIRED MEMBERS UNDER
51	51	THE PUBLIC EMPLOYEES RETIREMENT ACT; MAKING AN APPROPRIATION.
52	52	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
53	53	SECTION 1. Section 10-11-118 NMSA 1978 (being Laws 2020,
54	54	Chapter 11, Section 61) is amended to read:
55	55	"10-11-118. COST-OF-LIVING ADJUSTMENTS--QUALIFIED PENSION
56	56	RECIPIENT--DECLINING INCREASE.--
57	57	A. As used in this section:
58	58	(1) "cost-of-living adjustment hurdle rate"
59	59	means the investment rate of return required to fund a cost-of-
60	60	living adjustment in excess of one-half percent, as determined
61	61	by the association's actuaries;
62	62	(2) "funded ratio" means the ratio of the
63	63	.229639.2SA underscored material = new
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90	90	actuarial value of the assets of the fund to the actuarial
91	91	accrued liability of the association for payments from the
92	92	fund, as determined by the association's actuaries;
93	93	(3) "preceding calendar year" means the full
94	94	calendar year preceding the July 1 on which pensions are being
95	95	adjusted; and
96	96	(4) "smoothed investment rate of return" means
97	97	a calculation made by spreading the difference between the
98	98	expected actuarial value in investment income and the actual
99	99	market value investment income over a smoothing period, as
100	100	determined by the association's actuaries.
101	101	B. A qualified pension recipient is eligible for a
102	102	cost-of-living pension adjustment. A qualified pension
103	103	recipient is:
104	104	(1) a normal retired member who has been
105	105	retired for at least two full calendar years from the effective
106	106	date of the latest retirement prior to July 1 of the year in
107	107	which the pension is being adjusted;
108	108	(2) a normal retired member who has attained
109	109	the age of sixty-five years and has been retired for at least
110	110	one full calendar year from the effective date of the member's
111	111	latest retirement prior to July 1 of the year in which the
112	112	pension is being adjusted;
113	113	(3) a disability retired member who has been
114	114	retired for at least one full calendar year from the effective
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143	143	date of the latest retirement prior to July 1 of the year in
144	144	which the pension is being adjusted;
145	145	(4) a survivor beneficiary who has received a
146	146	survivor pension for at least two full calendar years; or
147	147	(5) a survivor beneficiary of a deceased
148	148	retired member who otherwise would have been retired at least
149	149	two full calendar years from the effective date of the latest
150	150	retirement prior to July 1 of the year in which the pension is
151	151	being adjusted.
152	152	C. [Except as provided in Subsections F, G and H of
153	153	this section] During fiscal years [2021, 2022 and 2023 ] 2026
154	154	and 2027, a qualified pension recipient shall receive an
155	155	annual, non-compounding, additional payment. The amount of the
156	156	payment shall be determined each fiscal year by multiplying the
157	157	amount of annual pension payments, inclusive of all cost-of-
158	158	living adjustments prior to that fiscal year [2021], by two
159	159	percent.
160	160	D. Beginning May 1, 2023 and no later than each May
161	161	1 thereafter, the retirement board shall certify to the
162	162	association the:
163	163	(1) funded ratio as of June 30 of the
164	164	preceding calendar year; and
165	165	(2) smoothed investment rate of return as of
166	166	June 30 of the preceding calendar year.
167	167	E. Except as provided in Subsections F, G and H of
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196	196	this section, beginning July 1, 2023 and each July 1
197	197	thereafter, immediately following the retirement board's
198	198	certification of the funded ratio and smoothed investment rate
199	199	of return, the cost-of-living adjustment to a qualified pension
200	200	recipient payable pursuant to the Public Employees Retirement
201	201	Act shall be determined as an amount equal to the smoothed
202	202	investment rate of return on the actuarial value of assets on
203	203	June 30 of the preceding calendar year less the cost-of-living
204	204	adjustment hurdle rate, as determined by the association's
205	205	actuaries, multiplied by the funded ratio on June 30 of the
206	206	preceding calendar year or five-tenths percent, whichever is
207	207	greater, and subject to the following conditions:
208	208	(1) if the funded ratio of the fund is less
209	209	than one hundred percent on June 30 of the preceding calendar
210	210	year, the amount of the adjustment made pursuant to this
211	211	subsection shall not exceed three percent;
212	212	(2) if the funded ratio of the fund is equal
213	213	to or greater than one hundred percent on June 30 of the
214	214	preceding calendar year, the adjustment made pursuant to this
215	215	subsection shall not exceed five percent;
216	216	(3) notwithstanding the provisions of this
217	217	subsection, a qualified pension recipient shall receive a
218	218	minimum annual cost-of-living adjustment of five-tenths
219	219	percent; and
220	220	(4) the amount of increase shall be determined
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249	249	by multiplying the amount of pension, inclusive of all prior
250	250	adjustments, by the cost-of-living adjustment as determined by
251	251	this subsection.
252	252	F. For a normal retired member who worked for at
253	253	least twenty-five years under one or more applicable coverage
254	254	plans and whose annual pension benefit, after all previous
255	255	annual cost-of-living adjustments, is equal to an amount not
256	256	greater than twenty-five thousand dollars ($25,000), the
257	257	pension benefit shall be increased by two and one-half percent
258	258	each July 1. The amount of the increase shall be determined by
259	259	multiplying the amount of pension, inclusive of all prior
260	260	adjustments, by two and one-half percent.
261	261	G. For a disability retired member whose annual
262	262	pension benefit, after all previous annual cost-of-living
263	263	adjustments, is equal to an amount not greater than twenty-five
264	264	thousand dollars ($25,000), the pension benefit shall be
265	265	increased by two and one-half percent each July 1. The amount
266	266	of the increase shall be determined by multiplying the amount
267	267	of pension, inclusive of all prior adjustments, by two and one-
268	268	half percent.
269	269	H. For a normal retired member who has attained the
270	270	age of seventy-five years prior to July 1, 2020, the pension
271	271	benefit shall be increased by two and one-half percent each
272	272	July 1. The amount of the increase shall be determined by
273	273	multiplying the amount of pension, inclusive of all prior
274	274	.229639.2SA
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302	302	adjustments, by two and one-half percent.
303	303	I. A qualified pension recipient may decline an
304	304	increase in a pension by giving the association written notice
305	305	of the decision to decline the increase at least thirty days
306	306	prior to the date the increase would take effect."
307	307	SECTION 2. APPROPRIATION.--Sixty-six million dollars
308	308	($66,000,000) is appropriated from the general fund to the
309	309	public employees retirement association for expenditure in
310	310	fiscal year 2026 and subsequent fiscal years to provide
311	311	adequate funding to cover the cost of the temporary,
312	312	additional, non-compounding payments. Any unexpended or
313	313	unencumbered balance remaining at the end of a fiscal year
314	314	shall not revert to the general fund.
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