SB 75
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AN ACT
RELATING TO EDUCATIONAL RETIREMENT; MAKING CHANGES TO THE
EDUCATIONAL RETIREMENT ACT; PROVIDING FOR UNCLAIMED MEMBER
CONTRIBUTIONS TO BE DEPOSITED INTO THE EDUCATIONAL RETIREMENT
FUND; CLARIFYING CERTAIN TERMS; ALLOWING FOR A MEMBER ON
DISABILITY STATUS WHO IS OVER SIXTY AND WHO RECEIVES AN
ANNUITY ADJUSTMENT TO CONTINUE RECEIVING THE ANNUITY
ADJUSTMENT; REQUIRING PAYMENT OF ALLOWED SERVICE WITHIN
NINETY DAYS; ALLOWING FOR DISCLOSURE OF MEMBER OR RETIRED
MEMBER INFORMATION TO THE PUBLIC EMPLOYEES RETIREMENT BOARD
TO ADMINISTER; REPEALING SECTION 22-11-5.1 NMSA 1978 (BEING
LAWS 1999, CHAPTER 153, SECTION 2, AS AMENDED).
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 22-11-11 NMSA 1978 (being Laws 1967,
Chapter 16, Section 135, as amended) is amended to read:
"22-11-11. EDUCATIONAL RETIREMENT FUND--SUSPENSE
FUND.--
A. The "educational retirement fund" and the
"educational retirement suspense fund" are created.
B. The state treasurer shall be the custodian of
the funds, and the board shall be the trustee of the funds.
C. All membership fees, contributions from members
and local administrative units, securities evidencing the
investment of money from the fund, unclaimed member SB 75
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contributions, interest, gifts, grants or bequests shall be
deposited in the educational retirement fund.
D. All amounts received in satisfaction of a claim
brought by private attorneys on behalf of the board shall be
deposited into the educational retirement suspense fund. The
board shall disburse the compensation due the private
attorneys, together with reimbursement for reasonable costs
and expenses, in accordance with the terms of the contract
with the attorneys. After the disbursements have been made,
the balance of each deposit shall be distributed to the
educational retirement fund."
SECTION 2. Section 22-11-24 NMSA 1978 (being Laws 1967,
Chapter 16, Section 147) is amended to read:
"22-11-24. RETIREMENT BENEFITS--MINIMUM CONTRIBUTORY
EMPLOYMENT.--
A. A member shall have acquired not less than five
years of contributory employment to be eligible for
retirement benefits pursuant to the Educational Retirement
Act.
B. A member desiring to retire before having
completed five years of contributory employment shall be
limited to the maximum benefit the member would have been
entitled to receive under any statute repealed by the
Educational Retirement Act. A member may acquire five years
or less of contributory employment by contributing to the SB 75
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fund, for each year of contributory employment desired, a sum
equal to the prevailing combined contributions of the member
and the local administrative unit in effect at the time the
contributory employment is acquired. This contribution shall
be computed on the member's average annual salary for the
last five years of employment plus an additional sum as
interest from the effective date of the Educational
Retirement Act as fixed by the board, but not to exceed three
percent a year.
C. Years of contributory employment purchased
pursuant to this section shall not be considered as an
addition to service actually performed in computing the sum
of the member's retirement benefit.
D. The retirement benefits of members retired
pursuant to the Educational Retirement Act prior to
July 1, 1959 and who have acquired contributory employment
years by purchase shall be computed upon the basis of the
amount paid therefor.
E. As used only in this section, "five years of
contributory employment" means the member and employer have
made contributions through the last business day of the
sixtieth month of contributory employment, or if the member
is under contract, the member and employer have made
contributions for five years through the last business day
that the member can provide services under the contract." SB 75
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SECTION 3. Section 22-11-31 NMSA 1978 (being Laws 1979,
Chapter 333, Section 2, as amended) is amended to read:
"22-11-31. COST-OF-LIVING ADJUSTMENT--ELIGIBILITY--
BASED ON FUNDED RATIO--ADDITIONAL CONTRIBUTIONS.--
A. For the purposes of this section:
(1) "adjustment factor" means a
multiplicative factor computed to provide an annuity
adjustment pursuant to the provisions of Subsection B of this
section;
(2) "annuity" means any benefit payable
under the Educational Retirement Act or the Public Employees
Retirement Reciprocity Act as a retirement benefit,
disability benefit or survivor benefit;
(3) "calendar year" means the full twelve
months beginning January 1 and ending December 31;
(4) "consumer price index" means the average
of the monthly consumer price indexes for a calendar year for
the entire United States for all items as published by the
United States department of labor;
(5) "funded ratio" means the ratio of the
actuarial value of the assets of the fund to the actuarial
accrued liability of the educational retirement system;
(6) "median adjusted annuity" means the
median value of all annuities and retirement benefits paid
pursuant to Section 22-11-29 or 22-11-30 NMSA 1978, as SB 75
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calculated each fiscal year; provided, however, that the
benefits paid to a member pursuant to Section 22-11-38 NMSA
1978 shall not be included in the median adjusted annuity
calculation;
(7) "next preceding calendar year" means the
full calendar year immediately prior to the preceding
calendar year; and
(8) "preceding calendar year" means the full
calendar year preceding the July 1 on which a benefit is to
be adjusted.
B. On or after July 1, 1984:
(1) the annuity of a member who retires
pursuant to Subsection A of Section 22-11-23 NMSA 1978 or
Subsection A of Section 22-11-23.1 NMSA 1978 shall be
adjusted annually and cumulatively commencing on July 1 of
the year in which a member attains the age of sixty-five
years or on July 1 following the year a member retires,
whichever is later; and
(2) the annuity of a member who retires
pursuant to Subsection A of Section 22-11-23.2 NMSA 1978
shall be adjusted annually and cumulatively commencing on
July 1 of the year in which the member attains the age of
sixty-seven years or on July 1 following the year the member
retires, whichever is later.
C. Beginning on July 1, 2013 and on each July 1 SB 75
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thereafter:
(1) if the funded ratio of the fund as
reported by the board's actuary in the actuarial valuation
report for the next preceding fiscal year is one hundred
percent or greater, the annuity adjustments provided for
under Subsection B of this section shall be adjusted by
applying an adjustment factor based on the percentage
increase of the consumer price index between the next
preceding calendar year and the preceding calendar year. The
adjustment factor shall be applied as follows:
(a) if the percentage increase of the
consumer price index is less than two percent in absolute
value, the adjustment factor shall be the same amount as the
percentage increase of the consumer price index; and
(b) if the percentage increase of the
consumer price index is two percent or greater in absolute
value, the adjustment factor shall be one-half of the
percentage increase; except that the adjustment shall not
exceed four percent in absolute value nor be less than two
percent in absolute value;
(2) if the funded ratio of the fund as
reported by the board's actuary in the actuarial report for
the next preceding fiscal year is greater than ninety percent
but less than one hundred percent, except for a member who is
on disability status in accordance with Section 22-11-35 NMSA SB 75
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1978 and whose benefit is adjusted as provided in Subsection
G of this section or a member who is retired pursuant to
Section 22-11-38 NMSA 1978, the adjustment factor provided
for in Subsection B of this section shall be applied as
follows:
(a) if the percentage increase in the
consumer price index is less than two percent in absolute
value, for a member who has twenty-five or more years of
service credit at retirement and whose annuity is less than
or equal to the median adjusted annuity for the fiscal year
next preceding the adjustment date, the adjustment factor
shall be ninety-five percent of the adjustment factor
determined pursuant to Subparagraph (a) of Paragraph (1) of
this subsection;
(b) if the percentage increase in the
consumer price index is less than two percent in absolute
value, for a member who has less than twenty-five years of
service credit at retirement and whose annuity is less than
or equal to the median adjusted annuity for the fiscal year
next preceding the adjustment date, and for a member whose
annuity is greater than the median adjusted annuity for the
fiscal year next preceding the adjustment date, the
adjustment factor shall be ninety percent of the adjustment
factor determined pursuant to Subparagraph (a) of Paragraph
(1) of this subsection; SB 75
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(c) if the percentage increase in the
consumer price index is greater than or equal to two percent
in absolute value for a member who has twenty-five or more
years of service credit at retirement and whose annuity is
less than or equal to the median adjusted annuity for the
fiscal year next preceding the adjustment date, the
adjustment factor shall be ninety-five percent of the
adjustment factor determined under Subparagraph (b) of
Paragraph (1) of this subsection; and
(d) if the percentage increase in the
consumer price index is greater than or equal to two percent
in absolute value, for a member who has less than twenty-five
years of service credit at retirement and whose annuity is
less than or equal to the median adjusted annuity for the
fiscal year next preceding the adjustment date, and for a
member whose annuity is greater than the median adjusted
annuity for the fiscal year next preceding the adjustment
date, the adjustment factor shall be ninety percent of the
adjustment factor determined under Subparagraph (b) of
Paragraph (1) of this subsection;
(3) if the funded ratio of the fund as
reported by the board's actuary in the actuarial valuation
report for the next preceding fiscal year is ninety percent
or less, except for a member who is on disability status in
accordance with Section 22-11-35 NMSA 1978 and whose benefit SB 75
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is adjusted as provided in Subsection G of this section or a
member who is retired pursuant to Section 22-11-38 NMSA 1978,
the adjustment factor provided for in Subsection B of this
section shall be applied as follows:
(a) if the percentage increase in the
consumer price index is less than two percent in absolute
value, for a member who has twenty-five or more years of
service credit at retirement and whose annuity is less than
or equal to the median adjusted annuity for the fiscal year
next preceding the adjustment date, the adjustment factor
shall be ninety percent of the adjustment factor determined
pursuant to Subparagraph (a) of Paragraph (1) of this
subsection;
(b) if the percentage increase in the
consumer price index is less than two percent in absolute
value, for a member who has less than twenty-five years of
service credit at retirement and whose annuity is less than
or equal to the median adjusted annuity for the fiscal year
next preceding the adjustment date, and for a member whose
annuity is greater than the median adjusted annuity for the
fiscal year next preceding the adjustment date, the
adjustment factor shall be eighty percent of the adjustment
factor determined pursuant to Subparagraph (a) of Paragraph
(1) of this subsection;
(c) if the percentage increase in the SB 75
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consumer price index is greater than or equal to two percent
in absolute value for a member who has twenty-five or more
years of service credit at retirement and whose annuity is
less than or equal to the median adjusted annuity for the
fiscal year next preceding the adjustment date, the
adjustment factor shall be ninety percent of the adjustment
factor determined under Subparagraph (b) of Paragraph (1) of
this subsection; and
(d) if the percentage increase in the
consumer price index is greater than or equal to two percent
in absolute value, for a member who has less than twenty-five
years of service credit at retirement and whose annuity is
less than or equal to the median adjusted annuity for the
fiscal year next preceding the adjustment date, and for a
member whose annuity is greater than the median adjusted
annuity for the fiscal year next preceding the adjustment
date, the adjustment factor shall be eighty percent of the
adjustment factor determined under Subparagraph (b) of
Paragraph (1) of this subsection; and
(4) an annuity shall not be decreased if
there is a decrease in the consumer price index between the
next preceding calendar year and the preceding calendar year.
D. A retired member whose benefit is subject to
adjustment under the provisions of the Educational Retirement
Act in effect prior to July 1, 1984 shall have the member's SB 75
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annuity readjusted annually and cumulatively under the
provisions of that act in effect prior to July 1, 1984 until
July 1 of the year in which the member attains the age of
sixty-five years, when the member shall have the annuity
readjusted annually and cumulatively under the provisions of
this section.
E. A member who:
(1) retires pursuant to Subsection A of
Section 22-11-23 NMSA 1978 or Subsection A of Section
22-11-23.1 NMSA 1978 after attaining the age of sixty-five
years shall have the member's annuity adjusted as provided in
Subsections B and C of this section commencing on July 1 of
the year following the member's retirement; or
(2) retires pursuant to Subsection A of
Section 22-11-23.2 NMSA 1978 after attaining the age of
sixty-seven years shall have the member's annuity adjusted as
provided in Subsections B and C of this section commencing on
July 1 of the year following the member's retirement.
F. A retired member who returns to work and
suspends retirement shall be subject to the provisions of
this section as they exist at the time of the member's latest
retirement.
G. Benefits of a member who is on a disability
status in accordance with Section 22-11-35 NMSA 1978 or a
member who is certified by the board as disabled at regular SB 75
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retirement shall be adjusted in accordance with Subsections B
and C of this section; provided that:
(1) the benefits shall be adjusted annually
and cumulatively commencing on July 1 of the third full year
following the year in which the member was approved by the
board for disability or retirement; and
(2) upon attaining the age of sixty years, a
member on a disability status who is receiving an annuity
adjustment pursuant to this section shall continue to receive
the annuity adjustment at the rate of benefits received for
the disability."
SECTION 4. Section 22-11-34 NMSA 1978 (being Laws 1967,
Chapter 16, Section 157, as amended) is amended to read:
"22-11-34. ALLOWED SERVICE CREDIT.--
A. A member shall be certified to have acquired
allowed service credit pursuant to the Internal Revenue Code
of 1986 for those periods of time when the member was:
(1) employed prior to July 1, 1967 in a
federal educational program within New Mexico, including
United States Indian schools and civilian conservation corps
camps. This service credit shall be allowed without
contribution;
(2) engaged in military service that
interrupted the member's employment in New Mexico if the
member returned to employment within eighteen months SB 75
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following honorable discharge. This service credit shall be
allowed without contribution;
(3) engaged in United States military
service or the commissioned corps of the public health
service from which the member was honorably discharged;
provided that:
(a) the member shall have five years or
more of contributory employment to be eligible to purchase
allowed service credit pursuant to this paragraph;
(b) the member shall contribute to the
fund, for each year of service credit the member elects to
purchase, a sum equal to the member's average annual actual
salary for the five years preceding the date of the
contribution multiplied by the sum of the member contribution
rate and the employer contribution rate in effect at the time
of the member's written election to purchase, subject to the
federal Uniformed Services Employment and Reemployment Rights
Act of 1994;
(c) full payment shall be made within
ninety days of the date that the member is informed of the
amount of the payment; and
(d) the portion of the purchase cost
derived from the employer's contribution rate shall be
credited to the fund and, in the event that a member requests
a refund of contributions pursuant to Section 22-11-15 NMSA SB 75
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1978, the member shall not be entitled to a refund of that
portion of the purchase cost derived from the employer
contribution rate; or
(4) employed:
(a) in a public school or public
institution of higher learning in another state, territory or
possession of the United States;
(b) in a United States military
dependents' school operated by a branch of the armed forces
of the United States;
(c) as provided in Paragraph (1) of
this subsection after July 1, 1967; or
(d) in a private school or institution
of higher learning in New Mexico whose education program is
accredited or approved by the department at the time of
employment.
B. Effective July 1, 2001, the member or employer
under Paragraph (4) of Subsection A of this section shall
contribute to the fund for each year of allowed service
credit desired an amount equal to the actuarial value of the
service purchased as defined by the board. No allowed
service credit shall be purchased pursuant to Paragraph (4)
of Subsection A of this section unless the member is
currently employed by a local administrative unit.
C. No member shall be certified to have acquired SB 75
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allowed service credit:
(1) under any single paragraph or the
combination of only Paragraphs (1) and (4) or only Paragraphs
(2) and (3) of Subsection A of this section in excess of five
years; or
(2) in excess of ten years for any other
combination of Paragraphs (1) through (4) of Subsection A of
this section.
D. A member receiving service credit under
Paragraph (3) or (4) of Subsection A of this section who
enrolls in the retiree health care authority shall make
contributions pursuant to Subsection C of Section 10-7C-15
NMSA 1978."
SECTION 5. Section 22-11-55 NMSA 1978 (being Laws 2009,
Chapter 240, Section 1 and Laws 2009, Chapter 248, Section 1,
as amended) is amended to read:
"22-11-55. DISCLOSURE OF MEMBER OR RETIRED MEMBER
INFORMATION--PENALTY.--
A. Other than names of members and local
administrative units by which a member was employed; dates of
employment, retirement and reported death; service credit;
reported salary; retirement and disability benefits; and
amounts of contributions made by members and local
administrative units, neither the board nor its employees or
contractors shall allow public inspection or disclosure of SB 75
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any information regarding a member or retired member to
anyone except:
(1) the member, retired member or the spouse
or authorized representative of the member or retired member;
(2) other persons specifically identified in
a prior release and consent, in the form prescribed by the
board, executed by the member, retired member, spouse or
authorized representative;
(3) the attorney general, appropriate law
enforcement agencies, the state auditor or the public
education department or higher education department, if the
information provided relates to contributions, payments or
management of money received by, or the financial controls or
procedures of, a local administrative unit; or
(4) the public employees retirement board
for the purpose of administering the Public Employees
Retirement Reciprocity Act.
B. No person receiving information disclosed by a
violation of Subsection A of this section shall disclose that
information to any other person unless authorized by an
applicable confidentiality agreement, board rule or state
law.
C. Whoever knowingly violates a provision of
Subsection A or B of this section is guilty of a petty
misdemeanor and shall be sentenced in accordance with Section SB 75
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31-19-1 NMSA 1978.
SECTION 6. REPEAL.--Section 22-11-5.1 NMSA 1978 (being
Laws 1999, Chapter 153, Section 2, as amended) is repealed.