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 Stefanics
/Roybal Caballero
LAST UPDATED
ORIGINAL DATE 1/31/2025
SHORT TITLE Magistrate Judge Retirement Changes
BILL
NUMBER Senate Bill 151
ANALYST Simon
REVENUE*
(dollars in thousands)
Type FY25 FY26 FY27 FY28 FY29
Recurring or
Nonrecurring
Fund
Affected
Magistrate
Employer
Contributions
$375.1 $386.4 $397.9 $409.9 Recurring
Magistrate
Retirement
Fund
Magistrate
Employee
Contributions
$330.9 $340.8 $351.0 $361.6 Recurring
Magistrate
Retirement
Fund
Total $706.0 $727.2 $749.9 $771.5
Parentheses ( ) indicate revenue decreases.
Numbers may not sum due to rounding.
*Amounts reflect most recent analysis of this legislation.
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
Court Budgets $375.1 $386.4 $761.5 Recurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Duplicates House Bill 183, Relates to Senate Bill 138
Sources of Information
LFC Files
Agency Analysis Received From
Administrative Office of the Courts (AOC) Public Employees Retirement Association (PERA)
SUMMARY
Synopsis of Senate Bill 151
Senate Bill 151 (SB151) would increase retirement benefits for magistrate court judges. The bill
reduces the number of years a magistrate must serve before qualifying for a benefit from eight
years to five years for those retiring over age 65, increases the multiplier used to calculate
pension benefits from 3 percent to 3.5 percent, and increases the maximum pension benefit from
85 percent of salary to 100 percent of salary. Senate Bill 151 – Page 2
To fund these increases and improve the stability of the magistrate retirement fund, the bill
would increase employer contributions from 15 percent of salary to 19.24 percent of salary and
employee contributions from 10.5 percent of salary to 14.74 percent of salary.
The effective date of this bill is July 1, 2025.
FISCAL IMPLICATIONS
The bill would increase benefits paid to members of the Public Employees Retirement
Association (PERA) covered by the Magistrate Retirement Act. Article XX, Section 22, of the
New Mexico Constitution prohibits the Legislature from enacting any law that increases the
benefits paid by PERA unless adequate funding is provided. That section assigns the PERA
board the sole and exclusive power to adopt actuarial assumptions, based on recommendations
from an independent actuary.
In addition to benefits increases, the bill also includes additional revenue to the magistrate
retirement fund. Analysis from PERA indicates the bill is currently undergoing an actuarial
analysis and the analysis does not indicate if the bill includes adequate funding to cover the
increased benefits cost. Notably, the bill does not contain a provision specifying the change only
applies to future service, presumably granting members a retroactive increase to their already
earned retirement benefits. This could have a significant impact on the fund. PERA notes it is
“unclear” as to whether the change applies only to benefits earned in the future and suggests
making it clear that this change would only apply to future earned benefits.
Analysis from the Administrative Office of the Courts (AOC) does not calculate the fiscal impact
of the bill but notes contributions will rise for both magistrates and the courts. Similarly, analysis
from PERA does not project anticipated revenue should the bill pass. Total magistrate salaries
were estimated from state personnel records as of January 1, 2025, with an increase of 4 percent
applied for FY26, based on the LFC’s recommendation for the General Appropriation Act.
PERA’s actuaries assume annual payroll growth of 3 percent and this assumption was used to
project salary increases from FY27 through FY29. The table below includes calculations based
on these assumptions.
Po s it io n FTE
FY26 Estimate*
Salaries
Current
Employer
SB151
Employer Dif f .
Current
Me mber
SB151
Memb er Dif f .
Magistrate Judge 67 $8,846,796 $1,327,019 $1,702,124 $375,104 $928,914 $1,259,784 $330,870
Fiscal Impact of Senate Bill 151: Contributions to the Magistrate Retirement Fund
*Adjusted f rom current salaries based on the LFC recommendation f or FY26.
Source: State Personnel Records
Overall, LFC estimates the bill would increase contributions to the magistrate retirement fund by
$705 thousand, or 31.3 percent, in FY26. Employer contributions would increase by an average
of $5,600 per current member and member contributions would increase by an average of
$4,900. The bill does not include an appropriation and analysis from AOC notes the increased
employer contributions will be paid “without additional general fund appropriations,” suggesting
courts currently have sufficient funds within their budget to cover the estimated $375 thousand in
payments. Separately, the judicial branch has submitted a request for a $13.6 million
appropriation from the general fund for compensation increases for judicial branch employees
earning less than $100 thousand per year and it is unclear why the court has not already deployed
the $375 thousand available to partially address this issue.
Senate Bill 151 – Page 3
SIGNIFICANT ISSUES
Pension benefits from PERA’s magistrate retirement fund are calculated by multiplying a
member’s salary against a multiplier set in state law by the number of years of service credit a
member has accrued. Currently, the multiplier for the magistrate retirement fund is set at 3
percent, meaning for each year of service credit the member’s benefit increases by 3 percent of
salary. So, for example, a member with 10 years of service credit would receive 30 percent of
their salary. Salary is calculated based on the average of the amount earned during the member’s
highest paid five consecutive years, typically at the end of the member’s career.
SB151 would increase pension benefits for magistrate judges by 14.3 percent by increasing the
multiplier from 3 percent to 3.5 percent. So, for example, under SB151, pension amounts would
increase from 30 percent of salary to 35 percent of salary for a member with 10 years of service.
SB151 would also increase the maximum allowable benefit, which is currently capped at 85
percent of salary. The bill would increase the cap to 100 percent, in line with recent changes
made to the PERA fund for other public employee plans. Analysis from PERA notes members
would be required to work a longer period before becoming eligible for the higher benefit.
According to PERA’s most recent financial report, the magistrate retirement fund had 86 active
retirees, with 35 who earned less than 10 years of service credit, 36 who earned at least 10 years
but less than 20 years, and 15 who earned 20 years or more of service credit. The average
monthly benefit, as of June 30, 2024, was $3,606.
PERA notes the increase in the maximum allowable benefit does not clearly indicate if
previously earned service credit can be applied to this new limit, allowing members who have
already reached the 85 percent cap to claim additional pension benefits for credit they have
already earned. Similar legislation for other PERA members enacted in 2024 included a
temporary provision indicating the increase applied only to future earned service credit. In other
words, a member near retirement would need to work additional years to earn additional service
credit. Analysis from PERA does not indicate what potential fiscal impact applying the increase
retroactively will have on the fund.
SB151 would decrease the minimum amount of service credit needed before a member is eligible
for a benefit payment. Members who do not reach the minimum service credit requirement are
eligible to receive a refund of their contributions to PERA plus interest but are not eligible for
pension benefits. Since July 2014, new members must serve for eight years to qualify for a
benefit at age 65; the bill would lower that to five years. Members whose service began before
July 2014 need five years of service before becoming eligible and current law allows members
with more years of service to retire at a younger age. Data from PERA’s financial report
indicates 20 of the 86 active retired members, or about 23 percent, served between five years and
nine years. It is likely most of these members began their service prior to July 2014 and likely
needed only five years of service to qualify. It is unclear what percentage of members whose
service began after 2014 have completed at least five but less than eight years of service, but the
change could increase the number of members eligible for a pension benefit. PERA’s analysis
does not address the potential fiscal impact of this change.
Analysis from AOC indicates the bill addresses the persistent underfunding of the magistrate
retirement fund. As of June 30, 2024, PERA reported total liabilities of the magistrate retirement
fund $65.4 million and total assets of $34.3 million for a funded ratio of 52.4 percent. With Senate Bill 151 – Page 4
current contribution rates, PERA’s actuaries expect the unfunded liability to be paid off in 67
years, above the board’s target of 25 years. Fund stability could be improved if the additional
contributions included in the bill fully offset the benefits increase proposed and provide the fund
with additional resources to pay off the unfunded liability earlier. However, PERA indicates the
bill is currently undergoing an actuarial review. (See fiscal implications).
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
SB151 duplicates House Bill 183. SB151 relates to Senate Bill 138, which would eliminate a
$1.2 million per year distribution to magistrate retirement fund from tax proceeds that would
otherwise be directed to the general fund.
OTHER SIGNIFICANT ISSUES
Section 1 of the bill would amend the section of law creating the magistrate retirement fund to
include appropriations among the funding sources that could be deposited in the fund. Analysis
from PERA notes this language is consistent with typical fund language.
JWS/hj/sgs