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 Stewart/Wirth
LAST UPDATED
ORIGINAL DATE 2/6/2025
SHORT TITLE Educational Retirees Returning to Work
BILL
NUMBER Senate Bill 133
ANALYST Hanika-Ortiz
REVENUE*
(dollars in thousands)
Type FY25 FY26 FY27 FY28 FY29
Recurring or
Nonrecurring
Fund
Affected
Contributions
($220.0 to
$1,100.0)
($227.0 to
$1,133.0)
($233.0 to
$1,167.0)
($233.0 to
$1,167.0)
Recurring
ERB Trust
Fund
Parentheses ( ) indicate revenue decreases.
*Amounts reflect most recent analysis of this legislation.
Relates to House Bill 254 and Senate Bills 165, 251, and 292
Sources of Information
LFC Files
Agency Analysis Received From
New Mexico Independent Community Colleges (NMICC) Central New Mexico Community College (CNMCC) New Mexico Highlands University (NMHU) New Mexico Institute of Mining and Technology (NMIMT)
University of New Mexico (UNM)
Educational Retirement Board (ERB)
New Mexico Public Schools Insurance Authority (NMPSIA)
SUMMARY
Synopsis of Senate Bill 133
Senate Bill 133 (SB133) amends Section 22-11-25.1 NMSA 1978 of the Educational Retirement
Act to raise the maximum amount a retiree may earn per year from reemployment with an
affiliated employer, from $15 thousand to $25 thousand, without suspending their retirement
benefits.
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
ERB reported that return-to-work pay under the $15 thousand salary cap exception was $2.7 Senate Bill 133 – Page 2
million in 2024. If the salary cap is increased to $25 thousand, ERB estimates the fund would
lose $220 thousand per year, from contributions that would have been made from hiring a non-
retired employee member. Further, under ERB’s normal return-to-work program, there is no
salary cap, but both employee and employer contributions must be made. If reemployed retirees
decide to work under the return-to-work salary exception, because of the increase, they will no
longer need to make non-refundable contributions to the fund, nor would their employers, and
the fund would lose $1.1 million per year in contributions to pay down the unfunded liability.
ERB’s trust fund grows through a combination of payroll contributions and compounded
interest, a delicate balance.
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.
To address workforce shortages in education, particularly in STEM fields and special education,
ERB established return-to-work exceptions to allow retired educational employees that collect
retirement benefits re-enter the workforce, while ensuring the pension system remains stable.
Institutions report that they rehire retirees under two return-to-work exceptions: the maximum
salary provision that this bill seeks to change, and the less than .25 FTE time worked provision.
Since the $15 thousand maximum salary provision was implemented, return-to-work faculty and
staff pay has increased. Although well-intentioned, a higher threshold may incentivize more
active educational members to retire earlier than they might have and return to employment,
since they could earn up to $25 thousand per year without making contributions and still collect
their pension benefits.
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.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
This bill relates to House Bill 254 Educational Retirees Returning to Work Time Period, which
increases the time a retiree may work after retirement to 84 months, from 36 months, without
suspending 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.
Senate Bill 133 – Page 3
This bill relates to Senate Bill 251 Certain Retirees Returning to Work, which expands definition
of “peace officer.”
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.
AHO/hj