HOUSE JUDICIARY COMMITTEE SUBSTITUTE FOR
HOUSE EDUCATION COMMITTEE SUBSTITUTE FOR
HOUSE BILL 573
49th legislature - STATE OF NEW MEXICO - first session, 2009
AN ACT
RELATING TO THE RETIREMENT OF PUBLIC EMPLOYEES; AMENDING THE EDUCATIONAL RETIREMENT ACT TO CHANGE RETIREMENT ELIGIBILITY REQUIREMENTS FOR NEW MEMBERS, TO REQUIRE FINANCIAL TRAINING FOR BOARD MEMBERS, TO PROVIDE A LIMIT ON THE CALCULATION OF AVERAGE ANNUAL SALARY TO PROVIDE CONDITIONS FOR ACQUIRING CERTAIN ALLOWED SERVICE CREDIT AND TO CHANGE THE REQUIREMENTS FOR RETURNING TO WORK AFTER RETIREMENT; AMENDING THE PUBLIC EMPLOYEES RETIREMENT ACT TO CHANGE RETIREMENT ELIGIBILITY REQUIREMENTS FOR NEW MEMBERS, TO REQUIRE FINANCIAL TRAINING FOR BOARD MEMBERS, TO PROVIDE A LIMIT ON THE CALCULATION OF FINAL AVERAGE SALARY AND TO ADJUST THE CALCULATION OF SERVICE CREDIT UNDER CERTAIN RETIREMENT PLANS; AMENDING THE RETIREE HEALTH CARE ACT TO CLARIFY A CERTAIN DEFINITION, TO INCREASE CERTAIN CONTRIBUTION RATES FROM CERTAIN MEMBERS AND TO REQUIRE ADDITIONAL CONTRIBUTIONS FROM EMPLOYEES WHO HAVE ACCRUED CERTAIN SERVICE CREDITS; CONTINUING A CERTAIN TAX DISTRIBUTION TO THE RETIREE HEALTH CARE FUND; CREATING A TASK FORCE; MAKING AN APPROPRIATION; RECONCILING MULTIPLE AMENDMENTS TO THE SAME SECTIONS OF LAW IN LAWS 2003; DECLARING AN EMERGENCY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 7-1-6.56 NMSA 1978 (being Laws 2007, Chapter 168, Section 1) is amended to read:
"7-1-6.56. DISTRIBUTION--RETIREE HEALTH CARE FUND.--In addition to the distribution made pursuant to Section 7-1-6.30 NMSA 1978, [for the period beginning July 1, 2007 and ending June 30, 2010] a distribution pursuant to Section 7-1-6.1 NMSA 1978 shall be made to the retiree health care fund in the amount of two hundred fifty thousand dollars ($250,000)."
Section 2. Section 10-7C-4 NMSA 1978 (being Laws 1990, Chapter 6, Section 4, as amended) is amended to read:
"10-7C-4. DEFINITIONS.--As used in the Retiree Health Care Act:
A. "active employee" means an employee of a public institution or any other public employer participating in either the Educational Retirement Act, the Public Employees Retirement Act, the Judicial Retirement Act, the Magistrate Retirement Act or the Public Employees Retirement Reciprocity Act or an employee of an independent public employer;
B. "authority" means the retiree health care authority created pursuant to the Retiree Health Care Act;
C. "basic plan of benefits" means only those coverages generally associated with a medical plan of benefits;
D. "board" means the board of the retiree health care authority;
E. "current retiree" means an eligible retiree who is receiving a disability or normal retirement benefit under the Educational Retirement Act, the Public Employees Retirement Act, the Judicial Retirement Act, the Magistrate Retirement Act, the Public Employees Retirement Reciprocity Act or the retirement program of an independent public employer on or before July 1, 1990;
F. "eligible dependent" means a person obtaining retiree health care coverage based upon that person's relationship to an eligible retiree as follows:
(1) a spouse;
(2) an unmarried child under the age of nineteen who is:
(a) a natural child;
(b) a legally adopted child;
(c) a stepchild living in the same household who is primarily dependent on the eligible retiree for maintenance and support;
(d) a child for whom the eligible retiree is the legal guardian and who is primarily dependent on the eligible retiree for maintenance and support, as long as evidence of the guardianship is evidenced in a court order or decree; or
(e) a foster child living in the same household;
(3) a child described in Subparagraphs (a) through (e) of Paragraph (2) of this subsection who is between the ages of nineteen and twenty-five and is a full-time student at an accredited educational institution; provided that "full-time student" shall be a student enrolled in and taking twelve or more semester hours or its equivalent contact hours in primary, secondary, undergraduate or vocational school or a student enrolled in and taking nine or more semester hours or its equivalent contact hours in graduate school;
(4) a dependent child over nineteen who is wholly dependent on the eligible retiree for maintenance and support and who is incapable of self-sustaining employment by reason of mental retardation or physical handicap; provided that proof of incapacity and dependency shall be provided within thirty-one days after the child reaches the limiting age and at such times thereafter as may be required by the board;
(5) a surviving spouse defined as follows:
(a) "surviving spouse" means the spouse to whom a retiree was married at the time of death; or
(b) "surviving spouse" means the spouse to whom a deceased vested active employee was married at the time of death; or
(6) a surviving dependent child who is the dependent child of a deceased eligible retiree whose other parent is also deceased;
G. "eligible employer" means either:
(1) a "retirement system employer", which means an institution of higher education, a school district or other entity participating in the public school insurance authority, a state agency, state court, magistrate court, municipality, county or public entity, each of which is affiliated under or covered by the Educational Retirement Act, the Public Employees Retirement Act, the Judicial Retirement Act, the Magistrate Retirement Act or the Public Employees Retirement Reciprocity Act; or
(2) an "independent public employer", which means a municipality, county or public entity that is not a retirement system employer;
H. "eligible retiree" means:
(1) a "nonsalaried eligible participating entity governing authority member", which means a person who is not a retiree and who:
(a) has served without salary as a member of the governing authority of an employer eligible to participate in the benefits of the Retiree Health Care Act and is certified to be such by the executive director of the public school insurance authority;
(b) has maintained group health insurance coverage through that member's governing authority if such group health insurance coverage was available and offered to the member during the member's service as a member of the governing authority; and
(c) was participating in the group health insurance program under the Retiree Health Care Act prior to July 1, 1993; or
(d) notwithstanding the provisions of Subparagraphs (b) and (c) of this paragraph, is eligible under Subparagraph (a) of this paragraph and has applied before August 1, 1993 to the authority to participate in the program;
(2) a "salaried eligible participating entity governing authority member", which means a person who is not a retiree and who:
(a) has served with salary as a member of the governing authority of an employer eligible to participate in the benefits of the Retiree Health Care Act;
(b) has maintained group health insurance through that member's governing authority, if such group health insurance was available and offered to the member during the member's service as a member of the governing authority; and
(c) was participating in the group health insurance program under the Retiree Health Care Act prior to July 1, 1993; or
(d) notwithstanding the provisions of Subparagraphs (b) and (c) of this paragraph, is eligible under Subparagraph (a) of this paragraph and has applied before August 1, 1993 to the authority to participate in the program;
(3) an "eligible participating retiree", which means a person who:
(a) falls within the definition of a retiree, has made contributions to the fund for at least five years prior to retirement and whose eligible employer during that period of time made contributions as a participant in the Retiree Health Care Act on the person's behalf, unless that person retires on or before July 1, 1995, in which event the time period required for employee and employer contributions shall become the period of time between July 1, 1990 and the date of retirement, and who is certified to be a retiree by the educational retirement director, the executive secretary of the public employees retirement board or the governing authority of an independent public employer;
(b) falls within the definition of a retiree, retired prior to July 1, 1990 and is certified to be a retiree by the educational retirement director, the executive secretary of the public employees retirement association or the governing authority of an independent public employer; but this paragraph does not include a retiree who was an employee of an eligible employer who exercised the option not to be a participating employer pursuant to the Retiree Health Care Act and did not after January 1, 1993 elect to become a participating employer; unless the retiree: 1) retired on or before June 30, 1990; and 2) at the time of retirement did not have a retirement health plan or retirement health insurance coverage available from [his] the retiree's employer; or
(c) is a retiree who: 1) was at the time of retirement an employee of an eligible employer who exercised the option not to be a participating employer pursuant to the Retiree Health Care Act, but which eligible employer subsequently elected after January 1, 1993 to become a participating employer; 2) has made contributions to the fund for at least five years prior to retirement and whose eligible employer during that period of time made contributions as a participant in the Retiree Health Care Act on the person's behalf, unless that person retires prior to the eligible employer's election to become a participating employer or less than five years after the date participation begins when the participation date begins before July 1, 2009, in which event the time period required for employee and employer contributions shall become the period of time, if any, between the date participation begins and the date of retirement or when the participation date begins on or after July 1, 2009, in which event the person and employer shall contribute to the fund an amount equal to the full actuarial present value of the accrued benefits as determined by the authority; and 3) is certified to be a retiree by the educational retirement director, the executive director of the public employees retirement board or the governing authority of an independent public employer;
(4) a "legislative member", which means a person who is not a retiree and who served as a member of the New Mexico legislature for at least two years, but is no longer a member of the legislature and is certified to be such by the legislative council service; or
(5) a "former participating employer governing authority member", which means a person, other than a nonsalaried eligible participating entity governing authority member or a salaried eligible participating entity governing authority member, who is not a retiree and who served as a member of the governing authority of a participating employer for at least four years but is no longer a member of the governing authority and whose length of service is certified by the chief executive officer of the participating employer;
I. "fund" means the retiree health care fund;
J. "group health insurance" means coverage that includes but is not limited to life insurance, accidental death and dismemberment, hospital care and benefits, surgical care and treatment, medical care and treatment, dental care, eye care, obstetrical benefits, prescribed drugs, medicines and prosthetic devices, medicare supplement, medicare carveout, medicare coordination and other benefits, supplies and services through the vehicles of indemnity coverages, health maintenance organizations, preferred provider organizations and other health care delivery systems as provided by the Retiree Health Care Act and other coverages considered by the board to be advisable;
K. "ineligible dependents" [include] includes:
(1) those dependents created by common law relationships;
(2) dependents while in active military service;
(3) parents, aunts, uncles, brothers, sisters, grandchildren and other family members left in the care of an eligible retiree without evidence of legal guardianship; and
(4) anyone not specifically referred to as an eligible dependent pursuant to the rules [and regulations] adopted by the board;
L. "participating employee" means an employee of a participating employer, which employee has not been expelled from participation in the Retiree Health Care Act pursuant to Section 10-7C-10 NMSA 1978;
M. "participating employer" means an eligible employer who has satisfied the conditions for participating in the benefits of the Retiree Health Care Act, including the requirements of Subsection M of Section 10-7C-7 NMSA 1978 and Subsection D or E of Section 10-7C-9 NMSA 1978, as applicable;
N. "public entity" means a flood control authority, economic development district, council of governments, regional housing authority, conservancy district or other special district or special purpose government; and
O. "retiree" means a person who:
(1) is receiving:
(a) a disability or normal retirement benefit or survivor's benefit pursuant to the Educational Retirement Act;
(b) a disability or normal retirement benefit or survivor's benefit pursuant to the Public Employees Retirement Act, the Judicial Retirement Act, the Magistrate Retirement Act or the Public Employees Retirement Reciprocity Act; or
(c) a disability or normal retirement benefit or survivor's benefit pursuant to the retirement program of an independent public employer to which that employer has made periodic contributions; or
(2) is not receiving a survivor's benefit but is the eligible dependent of a person who received a disability or normal retirement benefit pursuant to the Educational Retirement Act, the Public Employees Retirement Act, the Judicial Retirement Act, the Magistrate Retirement Act or the Public Employees Retirement Reciprocity Act."
Section 3. Section 10-7C-15 NMSA 1978 (being Laws 1990, Chapter 6, Section 15, as amended) is amended to read:
"10-7C-15. RETIREE HEALTH CARE FUND CONTRIBUTIONS.--
A. Following completion of the preliminary contribution period, each participating employer shall make contributions to the fund [in the amount of:
(1) one percent of each participating employee's annual salary for the period July 1, 1990 through June 30, 2002; and
(2) up to one and three-tenths percent of each participating employee's annual salary beginning July 1, 2002] pursuant to the following provisions:
(1) for participating employees who are not members of an enhanced retirement plan, the employer's contribution shall equal:
(a) one and three-tenths percent of each participating employee's salary for the period from July 1, 2002 through June 30, 2010;
(b) one and six hundred sixty-six thousandths percent of each participating employee's salary for the period from July 1, 2010 through June 30, 2011;
(c) one and eight hundred thirty-four thousandths percent of each participating employee's salary for the period from July 1, 2011 through June 30, 2012; and
(d) two percent of each participating employee's salary beginning July 1, 2012;
(2) for participating employees who are members of an enhanced retirement plan, the employer's contribution shall equal:
(a) one and three-tenths percent of each participating employee's salary for the period from July 1, 2002 through June 30, 2010;
(b) two and eighty-four thousandths percent of each participating employee's salary for the period from July 1, 2010 through June 30, 2011;
(c) two and two hundred ninety-two thousandths percent of each participating employee's salary for the period from July 1, 2011 through June 30, 2012; and
(d) two and one-half percent of each participating employee's salary beginning July 1, 2012; and
(3) each employer that chooses to become a participating employer after January 1, 1998 shall make contributions to the fund in the amount determined to be appropriate by the board.
B. Following completion of the preliminary contribution period, each participating employee, as a condition of employment, shall contribute to the fund [an employee contribution in an amount equal to:
(1) one-half of one percent of the employee's salary for the period July 1, 1990 through June 30, 2002; and
(2) up to sixty-five hundredths of one percent beginning July 1, 2002] pursuant to the following provisions:
(1) for a participating employee who is not a member of an enhanced retirement plan, the employee's contribution shall equal:
(a) sixty-five hundredths of one percent of the employee's salary for the period from July 1, 2002 through June 30, 2010;
(b) eight hundred thirty-three thousandths of one percent of the employee's salary for the period from July 1, 2010 through June 30, 2011;
(c) nine hundred seventeen thousandths of one percent of the employee's salary for the period from July 1, 2011 through June 30, 2012; and
(d) one percent of the employee's salary beginning July 1, 2012;
(2) for a participating employee who is a member of an enhanced retirement plan, the employee's contribution shall equal:
(a) sixty-five hundredths of one percent of the employee's salary for the period from July 1, 2002 through June 30, 2010;
(b) one and forty-two thousandths percent of the employee's salary for the period from July 1, 2010 through June 30, 2011;
(c) one and one hundred forty-six thousandths percent of the employee's salary for the period from July 1, 2011 through June 30, 2012; and
(d) one and one-fourth percent of the employee's salary beginning July 1, 2012; and
(3) as a condition of employment, each participating employee of an employer that chooses to become a participating employer after January 1, 1998 shall contribute to the fund an amount that is determined to be appropriate by the board. Each month, participating employers shall deduct the contribution from the participating employee's salary and shall remit it to the board as provided by any procedures that the board may require.
C. On or after July 1, 2009, no person who has obtained service credit pursuant to Subsection B of Section 10-11-6 NMSA 1978, Section 10-11-7 NMSA 1978 or Paragraph (3) or (4) of Subsection A of Section 22-11-34 NMSA 1978 may enroll with the authority unless the person makes a contribution to the fund equal to the full actuarial present value of the amount of the increase in the person's health care benefit, as determined by the authority.
[C.] D. Except for contributions made pursuant to Subsection C of this section, a participating employer that fails to remit before the tenth day after the last day of the month all employer and employee deposits required by the Retiree Health Care Act to be remitted by the employer for the month shall pay to the fund, in addition to the deposits, interest on the unpaid amounts at the rate of six percent per year compounded monthly.
[D.] E. Except for contributions made pursuant to Subsection C of this section, the employer and employee contributions shall be paid in monthly installments based on the percent of payroll certified by the employer.
[E.] F. Except in the case of erroneously made contributions or as may be otherwise provided in Subsection D of Section 10-7C-9 NMSA 1978, contributions from participating employers and participating employees shall become the property of the fund on receipt by the board and shall not be refunded under any circumstances, including termination of employment or termination of the participating employer's operation or participation in the Retiree Health Care Act.
[F.] G. Notwithstanding any other provision in the Retiree Health Care Act and at the first session of the legislature following July 1, [2010] 2013, the legislature shall review and adjust the [distribution] distributions pursuant to Section 7-1-6.1 NMSA 1978 and the employer and employee contributions to the authority in order to ensure the actuarial soundness of the benefits provided under the Retiree Health Care Act.
H. As used in this section, "member of an enhanced retirement plan" means:
(1) a member of the public employees retirement association who, pursuant to the Public Employees Retirement Act, is included in:
(a) state police member and adult correctional officer member coverage plan 1;
(b) municipal police member coverage plan 3, 4 or 5;
(c) municipal fire member coverage plan 3, 4 or 5; or
(d) municipal detention officer member coverage plan 1; or
(2) a member pursuant to the provisions of the Judicial Retirement Act."
Section 4. Section 10-11-6 NMSA 1978 (being Laws 1987, Chapter 253, Section 6, as amended) is amended to read:
"10-11-6. [CREDITED] SERVICE CREDIT--CREDIT FOR INTERVENING MILITARY AND UNITED STATES GOVERNMENT SERVICE.--
A. A member who leaves the employ of an affiliated public employer to enter a uniformed service of the United States shall be given service credit for periods of service in the uniformed services subject to the following conditions:
(1) the member is reemployed by an affiliated public employer within ninety days following termination of the period of intervening [serving] service in the uniformed service or the affiliated employer certifies in writing to the association that the member is entitled to reemployment rights under the federal Uniformed Services Employment and Reemployment Rights Act of 1994;
(2) the member retains membership in the association during the period of service in the uniformed services;
(3) free service credit shall not be given for periods of intervening service in the uniformed services following voluntary reenlistment. Service credit for such periods shall be given only after the member pays the association the sum of the contributions that the person would have been required to contribute had the person remained continuously employed throughout the period of intervening service following voluntary reenlistment, which payment shall be made during the period beginning with the date of reemployment and whose duration is three times the period of the person's intervening service in the uniformed services following voluntary reenlistment, not to exceed five years; (4) service credit shall not be given for periods of intervening service in the uniformed services that are used to obtain or increase a benefit from another state system or the retirement program provided under the Educational Retirement Act; [and]
(5) the member must not have received a discharge or separation from uniformed service under other than honorable conditions; and
(6) notwithstanding any provision of this plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with Section 414(u) of the Internal Revenue Code of 1986, as amended.
B. For a member who is subsequently employed by the government of the United States within thirty days of leaving the employ of an affiliated public employer:
(1) that member may continue membership in the association subject to the following conditions:
(a) the member has fifteen or more years of [credited] service credit;
(b) employment by the government of the United States commences within ninety days of termination of employment with the last affiliated public employer;
(c) the member files with the association a written application for continued membership within ninety days of termination of employment with the last affiliated public employer; and
(d) the member remits to the association, at the times and in the manner prescribed by the association, the member contributions and the employer contributions that would have been made had the member continued in the employ of the last affiliated public employer;
(2) the contributions required by Paragraph (1) of this subsection shall be based on a salary equal to the member's monthly salary at time of termination of employment with the last affiliated public employer;
(3) [credited] service credit will be determined as if the employment by the government of the United States was rendered the last affiliated public employer; [and]
(4) the employer contributions remitted by the member shall be credited to the [employer] employer's accumulation fund and shall not be paid out of the association in the event of subsequent cessation of membership; and
(5) a member receiving service credit under this subsection 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 10-11-7 NMSA 1978 (being Laws 1987, Chapter 253, Section 7, as amended) is amended to read:
"10-11-7. [CREDITED] SERVICE CREDIT--PURCHASE OF SERVICE.--
A. A member who entered a uniformed service of the United States may purchase service credit for periods of active duty in the uniformed services subject to the following conditions:
(1) the member pays the association the purchase cost determined according to Subsection E of this section;
(2) the member has five or more years of service credit acquired as a result of personal service rendered in the employ of an affiliated public employer;
(3) the aggregate amount of service credit purchased pursuant to this subsection does not exceed five years reduced by any period of service credit acquired for military service pursuant to any other provision of the Public Employees Retirement Act;
(4) service credit may not be purchased for periods of service in the uniformed services that are used to obtain or increase a benefit from another retirement program; and
(5) the member must not have received a discharge or separation from uniformed service under other than honorable conditions.
B. A member who was a civilian prisoner of war captured while in service to the United States as an employee of the federal government or as an employee of a contractor with the federal government may purchase service credit for the period of internment as a civilian prisoner of war, provided that:
(1) the member provides proof of employment with the federal government or as a contractor to the federal government in a form acceptable to the association;
(2) the member provides proof of the period of internment in a form acceptable to the association;
(3) the member has at least five years of service credit acquired as a result of personal service rendered in the employ of an affiliated public employer;
(4) the aggregate amount of service credit purchased pursuant to this subsection does not exceed five years reduced by any period of service credit acquired for military service pursuant to any other provision of the Public Employees Retirement Act;
(5) service credit may not be purchased for periods of service in internment as a civilian prisoner of war if such periods are used to obtain or increase a benefit from another retirement program; and
(6) the member pays the association the purchase cost determined according to Subsection E of this section.
C. A member who was employed by a utility company, library, museum, transit company or nonprofit organization administering federally funded public service programs, which utility company, library, museum, transit company or nonprofit organization administering federally funded public service programs or federally funded public service programs administered by a nonprofit organization are subsequently taken over by an affiliated public employer, or a member who was employed by an entity created pursuant to a joint powers agreement between two or more affiliated public employers for the purpose of administering or providing drug or alcohol addiction treatment services irrespective of whether the entity is subsequently taken over by an affiliated public employer, may purchase [credited] service credit for the period of employment subject to the following conditions:
(1) the member pays the association the purchase cost determined according to Subsection E of this section;
(2) the member has five or more years of [credited] service credit acquired as a result of personal service rendered in the employ of an affiliated public employer; and
(3) the aggregate amount of [credited] service credit purchased pursuant to this subsection does not exceed five years.
D. A member who was appointed to participate in a cooperative work study training program established jointly by a state agency and a state post-secondary educational institution may purchase [credited] service credit for the period of participation subject to the following conditions:
(1) the member pays the association the full actuarial present value of the amount of the increase in the employee's pension as a consequence of the purchase as determined by the association;
(2) the member pays the full cost of the purchase within sixty days of the date the member is informed of the amount of the payment;
(3) the member has five or more years of [credited] service credit acquired as a result of personal service rendered in the employ of an affiliated public employer; and
(4) the aggregate amount of [credited] service credit purchased pursuant to this subsection does not exceed five years.
E. Except for service to be used under a state legislator coverage plan, the purchase cost for each month of [credited] service credit purchased pursuant to the provisions of this section is equal to the member's final average salary multiplied by the sum of the member contribution rate and employer contribution rate, determined in accordance with the coverage plan applicable to the member at the time of the written election to purchase. The purchase cost for each year of [credited] service credit to be used under a state legislator coverage plan is equal to three times the normal member contribution per year of [credited] service credit under the state legislator coverage plan applicable to the member. Full payment shall be made in a single lump sum within sixty days of the date the member is informed of the amount of the payment. The portion of the purchase cost derived from the employer contribution rate shall be credited to the employer's accumulation fund and shall not be paid out of the association in the event of cessation of membership. In no case shall a member be credited with a month of service for less than the purchase cost as defined in this section.
F. A member shall be refunded, upon written request filed with the association, the portion of the purchase cost of [credited] service credit purchased pursuant to this section that the association determines to have been unnecessary to provide the member with the maximum pension applicable to the member. The association shall not pay interest on the portion of the purchase cost refunded to the member.
G. A member of the magistrate retirement system who during the member's service as a magistrate was eligible to become a member of the public employees retirement system and elected not to become a member of that system may purchase service credit pursuant to the public employees retirement system for the period for which the magistrate elected not to become a public employees retirement system member, by paying the amount of the increase in the actuarial present value of the magistrate pension as a consequence of the purchase as determined by the association. Full payment shall be made in a single lump-sum amount in accordance with procedures established by the retirement board. Except as provided in Subsection F of this section, seventy-five percent of the purchase cost shall be considered to be employer contributions and shall not be refunded to the member in the event of cessation of membership.
H. At any time prior to retirement, any member may purchase service credit in monthly increments, subject to the following conditions:
(1) the member has at least five years of service credit acquired as a result of personal service rendered in the employ of an affiliated public employer;
(2) the aggregate amount of service credit purchased pursuant to this subsection does not exceed one
year;
(3) the member pays full actuarial present value of the amount of the increase in the employee's pension as a consequence of the purchase as determined by the association;
(4) the member pays the full cost of the purchase within sixty days of the date the member is informed of the amount of the payment; and
(5) the purchase of service credit under this subsection cannot be used to determine the final average salary or the pension factor or be used to exceed the pension maximum.
I. A member receiving service credit under 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 6. Section 10-11-26.2 NMSA 1978 (being Laws 1994, Chapter 128, Section 3) is amended to read:
"10-11-26.2. STATE GENERAL MEMBER COVERAGE PLAN 3--AGE AND SERVICE CREDIT REQUIREMENTS FOR NORMAL RETIREMENT.--
A. Under state general member coverage plan 3:
(1) for a member who is a peace officer and for a member who is not a peace officer but was a retired member or a member on June 30, 2010, the age and service credit requirements for normal retirement are:
[A.] (a) age sixty-five years or older and five or more years of service credit;
[B.] (b) age sixty-four years and eight or more years of service credit;
[C.] (c) age sixty-three years and eleven or more years of service credit;
[D.] (d) age sixty-two years and fourteen or more years of service credit;
[E.] (e) age sixty-one years and seventeen or more years of service credit;
[F.] (f) age sixty years and twenty or more years of service credit; and
[G.] (g) any age and twenty-five or more years of service credit; and
(2) for a member who is not a peace officer and was not a retired member or a member on June 30, 2010, the age and service requirements for normal retirement are:
(a) age sixty-seven years or older and five or more years of service credit;
(b) any age if the sum of the member's age and years of service credit equals at least eighty; or
(c) any age and thirty or more years of service credit.
B. As used in this section, "peace officer" means any employee of the state with a duty to maintain public order or to make arrests for crime, whether that duty extends to all crimes or is limited to specific crimes, and who is not specifically covered by another coverage plan."
Section 7. Section 10-11-27 NMSA 1978 (being Laws 1987, Chapter 253, Section 27, as amended by Laws 2003, Chapter 268, Section 9 and by Laws 2003, Chapter 269, Section 1) is amended to read:
"10-11-27. STATE POLICE MEMBER AND ADULT CORRECTIONAL OFFICER MEMBER COVERAGE PLAN 1--APPLICABILITY.--
A. State police member and adult correctional officer member coverage plan 1 is applicable to state police members who are not specifically covered by another coverage plan and to adult correctional officer members. [The credited service of a state police member who has held the permanent rank of patrolman, sergeant, lieutenant or captain and does not hold an exempt rank or who is assigned to the aircraft division as a pilot, or of an adult correctional officer member, shall have actual credited service increased by twenty percent] For the purposes of state police member and adult correctional officer member coverage plan 1, a member shall have actual service credit increased by twenty percent if that member was a retired member or a member on June 30, 2010 and:
(1) is a state police member who holds the permanent rank of patrolman, sergeant, lieutenant or captain and does not hold an exempt rank;
(2) is a state police member who is assigned to the aircraft division as a pilot; or
(3) is an adult correctional officer member.
B. State police member and adult correctional officer member coverage plan 1 is applicable to adult correctional officer members in the first full pay period after July 1, 2004 if the retirement board certifies to the secretary of state that, of those adult correctional officer members to be covered under state police member and adult correctional officer member coverage plan 1, a majority of the members voting have voted to approve adoption of that plan at an election conducted pursuant to [Section 16 of this 2003 act] Laws 2003, Chapter 268, Section 16."
Section 8. Section 10-11-45 NMSA 1978 (being Laws 1987, Chapter 253, Section 45) is amended to read:
"10-11-45. MUNICIPAL GENERAL MEMBER COVERAGE PLAN 1--AGE AND SERVICE REQUIREMENTS FOR NORMAL RETIREMENT.--Under municipal general member coverage plan 1:
A. for a member who was a retired member or a member on June 30, 2010, the age and service requirements for normal retirement are:
[A.] (1) age sixty-five years or older and five or more years of [credited] service credit;
[B.] (2) age sixty-four years and eight or more years of [credited] service credit;
[C.] (3) age sixty-three years and eleven or more years of [credited] service credit;
[D.] (4) age sixty-two years and fourteen or more years of [credited] service credit;
[E.] (5) age sixty-one years and seventeen or more years of [credited] service credit;
[F.] (6) age sixty years and twenty or more years of [credited] service credit; or
[G.] (7) any age and twenty-five or more years of [credited] service credit; and
B. for a member who was not a retired member or a member on June 30, 2010, the age and service requirements for normal retirement are:
(1) age sixty-seven years or older and five or more years of service credit;
(2) any age if the sum of the member's age and years of service credit equals at least eighty; or
(3) any age and thirty or more years of service credit."
Section 9. Section 10-11-51 NMSA 1978 (being Laws 1987, Chapter 253, Section 51) is amended to read:
"10-11-51. MUNICIPAL GENERAL MEMBER COVERAGE PLAN 2--AGE AND SERVICE REQUIREMENTS FOR NORMAL RETIREMENT.--Under municipal general member coverage plan 2:
A. for a member who was a retired member or a member on June 30, 2010, the age and service requirements for normal retirement are:
[A.] (1) age sixty-five years or older and five or more years of [credited] service credit;
[B.] (2) age sixty-four years and eight or more years of [credited] service credit;
[C.] (3) age sixty-three years and eleven or more years of [credited] service credit;
[D.] (4) age sixty-two years and fourteen or more years of [credited] service credit;
[E.] (5) age sixty-one years and seventeen or more years of [credited] service credit;
[F.] (6) age sixty years and twenty or more years of [credited] service credit; or
[G.] (7) any age and twenty-five or more years of [credited] service credit; and
B. for a member who was not a retired member or a member on June 30, 2010, the age and service requirements for normal retirement are:
(1) age sixty-seven years or older and five or more years of service credit;
(2) any age if the sum of the member's age and years of service credit equals at least eighty; or
(3) any age and thirty or more years of service credit."
Section 10. Section 10-11-55.2 NMSA 1978 (being Laws 1993, Chapter 58, Section 2) is amended to read:
"10-11-55.2. MUNICIPAL GENERAL MEMBER COVERAGE PLAN 3--AGE AND SERVICE REQUIREMENTS FOR NORMAL RETIREMENT.--Under municipal general member coverage plan 3:
A. for a member who was a retired member or a member on June 30, 2010, the age and service requirements for normal retirement are:
[A.] (1) age sixty-five years or older and five or more years of [credited] service credit;
[B.] (2) age sixty-four years and eight or more years of [credited] service credit;
[C.] (3) age sixty-three years and eleven or more years of [credited] service credit;
[D.] (4) age sixty-two years and fourteen or more years of [credited] service credit;
[E.] (5) age sixty-one years and seventeen or more years of [credited] service credit;
[F.] (6) age sixty years and twenty or more years of [credited] service credit; or
[G.] (7) any age and twenty-five or more years of [credited] service credit; and
B. for a member who was not a retired member or a member on June 30, 2010, the age and service requirements for normal retirement are:
(1) age sixty-seven years or older and five or more years of service credit;
(2) any age if the sum of the member's age and years of service credit equals at least eighty; or
(3) any age and thirty or more years of service credit."
Section 11. Section 10-11-55.8 NMSA 1978 (being Laws 1998, Chapter 106, Section 2) is amended to read:
"10-11-55.8. MUNICIPAL GENERAL MEMBER COVERAGE PLAN 4--AGE AND SERVICE REQUIREMENTS FOR NORMAL RETIREMENT.--Under municipal general member coverage plan 4:
A. for a member who was a retired member or a member on June 30, 2010, the age and service requirements for normal retirement are:
[A.] (1) age sixty-five years or older and five or more years of [credited] service credit;
[B.] (2) age sixty-four years and eight or more years of [credited] service credit;
[C.] (3) age sixty-three years and eleven or more years of [credited] service credit;
[D.] (4) age sixty-two years and fourteen or more years of [credited] service credit;
[E.] (5) age sixty-one years and seventeen or more years of [credited] service credit;
[F.] (6) age sixty years and twenty or more years of [credited] service credit; or
[G.] (7) any age and twenty-five or more years of [credited] service credit; and
B. for a member who was not a retired member or a member on June 30, 2010, the age and service requirements for normal retirement are:
(1) age sixty-seven years or older and five or more years of service credit;
(2) any age if the sum of the member's age and years of service credit equals at least eighty; or
(3) any age and thirty or more years of service credit."
Section 12. Section 10-11-69 NMSA 1978 (being Laws 1987, Chapter 253, Section 69) is amended to read:
"10-11-69. MUNICIPAL POLICE MEMBER COVERAGE PLAN 3--AGE AND SERVICE REQUIREMENTS FOR NORMAL RETIREMENT.--Under municipal police member coverage plan 3, the age and service requirements for normal retirement are:
A. age sixty-five years or older and five or more years of [credited] service credit;
B. age sixty-four years and eight or more years of [credited] service credit;
C. age sixty-three years and eleven or more years of [credited] service credit;
D. age sixty-two years and fourteen or more years of [credited] service credit;
E. age sixty-one years and seventeen or more years of [credited] service credit; [or]
F. any age and twenty or more years of [credited] service credit for an individual who was a retired member or a member on June 30, 2010; or
G. any age and twenty-five or more years of service credit for an individual who was not a retired member or a member on June 30, 2010."
Section 13. Section 10-11-75 NMSA 1978 (being Laws 1987, Chapter 253, Section 75) is amended to read:
"10-11-75. MUNICIPAL POLICE MEMBER COVERAGE PLAN 4--AGE AND SERVICE REQUIREMENTS FOR NORMAL RETIREMENT.--Under municipal police member coverage plan 4, the age and service requirements for normal retirement are:
A. age sixty-five years or older and five or more years of [credited] service credit;
B. age sixty-four years and eight or more years of [credited] service credit;
C. age sixty-three years and eleven or more years of [credited] service credit;
D. age sixty-two years and fourteen or more years of [credited] service credit;
E. age sixty-one years and seventeen or more years of [credited] service credit; [or]
F. any age and twenty or more years of [credited] service credit for an individual who was a retired member or a member on June 30, 2010; or
G. any age and twenty-five or more years of service credit for an individual who was not a retired member or a member on June 30, 2010."
Section 14. Section 10-11-81 NMSA 1978 (being Laws 1987, Chapter 253, Section 81) is amended to read:
"10-11-81. MUNICIPAL POLICE MEMBER COVERAGE PLAN 5--AGE AND SERVICE REQUIREMENTS FOR NORMAL RETIREMENT.--Under municipal police member coverage plan 5, the age and service requirements for normal retirement are:
A. age sixty-five years or older and five or more years of [credited] service credit;
B. age sixty-four years and eight or more years of [credited] service credit;
C. age sixty-three years and eleven or more years of [credited] service credit;
D. age sixty-two years and fourteen or more years of [credited] service credit;
E. age sixty-one years and seventeen or more years of [credited] service credit; [or]
F. any age and twenty or more years of [credited] service credit for an individual who was a retired member or a member on June 30, 2010; or
G. any age and twenty-five or more years of service credit for an individual who was not a retired member or a member on June 30, 2010."
Section 15. Section 10-11-99 NMSA 1978 (being Laws 1987, Chapter 253, Section 99) is amended to read:
"10-11-99. MUNICIPAL FIRE MEMBER COVERAGE PLAN 3--AGE AND SERVICE REQUIREMENTS FOR NORMAL RETIREMENT.--Under municipal fire member coverage plan 3, the age and service requirements for normal retirement are:
A. age sixty-five years or older and five or more years of [credited] service credit;
B. age sixty-four years and eight or more years of [credited] service credit;
C. age sixty-three years and eleven or more years of [credited] service credit;
D. age sixty-two years and fourteen or more years of [credited] service credit;
E. age sixty-one years and seventeen or more years of [credited] service credit; [or]
F. any age and twenty or more years of [credited] service credit for an individual who was a retired member or a member on June 30, 2010; or
G. any age and twenty-five or more years of service credit for an individual who was not a retired member or a member on June 30, 2010."
Section 16. Section 10-11-105 NMSA 1978 (being Laws 1987, Chapter 253, Section 105) is amended to read:
"10-11-105. MUNICIPAL FIRE MEMBER COVERAGE PLAN 4--AGE AND SERVICE REQUIREMENTS FOR NORMAL RETIREMENT.--Under municipal fire member coverage plan 4, the age and service requirements for normal retirement are:
A. age sixty-five years or older and five or more years of [credited] service credit;
B. age sixty-four years and eight or more years of [credited] service credit;
C. age sixty-three years and eleven or more years of [credited] service credit;
D. age sixty-two years and fourteen or more years of [credited] service credit;
E. age sixty-one years and seventeen or more years of [credited] service credit; [or]
F. any age and twenty or more years of [credited] service credit for an individual who was a retired member or a member on June 30, 2010; or
G. any age and twenty-five or more years of service credit for an individual who was not a retired member or a member on June 30, 2010."
Section 17. Section 10-11-111 NMSA 1978 (being Laws 1987, Chapter 253, Section 111) is amended to read:
"10-11-111. MUNICIPAL FIRE MEMBER COVERAGE PLAN 5--AGE AND SERVICE REQUIREMENTS FOR NORMAL RETIREMENT.--Under municipal fire member coverage plan 5, the age and service requirements for normal retirement are:
A. age sixty-five years or older and five or more years of [credited] service credit;
B. age sixty-four years and eight or more years of [credited] service credit;
C. age sixty-three years and eleven or more years of [credited] service credit;
D. age sixty-two years and fourteen or more years of [credited] service credit;
E. age sixty-one years and seventeen or more years of [credited] service credit; [or]
F. any age and twenty or more years of [credited] service credit for an individual who was a retired member or a member on June 30, 2010; or
G. any age and twenty-five or more years of service credit for an individual who was not a retired member or a member on June 30, 2010."
Section 18. Section 10-11-115.2 NMSA 1978 (being Laws 2003, Chapter 268, Section 3) is amended to read:
"10-11-115.2. MUNICIPAL DETENTION OFFICER MEMBER COVERAGE PLAN 1--AGE AND SERVICE REQUIREMENTS FOR NORMAL RETIREMENT--CALCULATION OF [CREDITED] SERVICE CREDIT.--
A. Under municipal detention officer member coverage plan 1, the age and service requirements for normal retirement are:
(1) age sixty-five years or older and five or more years of [credited] service credit;
(2) age sixty-four years and eight or more years of [credited] service credit;
(3) age sixty-three years and eleven or more years of [credited] service credit;
(4) age sixty-two years and fourteen or more years of [credited] service credit;
(5) age sixty-one years and seventeen or more years of [credited] service credit;
(6) age sixty years and twenty or more years of [credited] service credit; or
(7) any age and twenty-five or more years of [credited] service credit.
B. In calculating [credited] service credit for the purposes of determining retirement eligibility and amount of pension, the [credited] service credit of a municipal detention officer member who was a retired member or a member on June 30, 2010 shall have actual [credited] service credit increased by twenty percent for the purposes of municipal detention officer member coverage plan 1."
Section 19. Section 10-11-133 NMSA 1978 (being Laws 1987, Chapter 253, Section 133, as amended) is amended to read:
"10-11-133. INVESTMENT OF FUNDS--PRUDENT INVESTOR STANDARD--CONDITIONS.--
A. Commissions paid for the purchase and sale of any security shall not exceed brokerage rates prescribed and approved by stock exchanges that have been approved by or are under the control of the United States securities and exchange commission or by industry practice.
B. The retirement board shall invest and manage the funds administered by the retirement board in accordance with the Uniform Prudent Investor Act.
C. The retirement board shall provide quarterly performance reports to the legislative finance committee and the department of finance and administration. Annually, the retirement board shall ratify and provide its written investment policy, including any amendments, to the legislative finance committee and the department of finance and administration.
D. Securities purchased with money from or held for any fund administered by the retirement board and for which the retirement board is trustee shall be in the custody of the state treasurer who shall, at the direction of the retirement board, deposit with a bank or trust company the securities for safekeeping or servicing.
E. The retirement board may consult with the state investment council or state investment officer and request information or advice with respect to the retirement board's overall investment plan, may utilize the services of the state investment council and state investment officer and may act on their advice concerning the plan. The state investment council and state investment officer shall render investment services to the retirement board without expense to the retirement board. The retirement board may also employ the investment management services and related management services of a trust company or national bank exercising trust powers or of an investment counseling firm or brokers for the purchase and sale of securities, commission recapture and transitioning services and may pay reasonable compensation for such services from funds administered by the retirement board. The terms of any such investment management services contract shall incorporate the statutory requirements for investment of funds under the retirement board's jurisdiction.
F. The retirement board shall annually provide for its members no less than eight hours of training in pension fund investing, fiduciary obligations or ethics. A member elected to the retirement board who fails to attend the training for two consecutive years shall be deemed to have resigned from the retirement board.
[F.] G. Except as provided in the Public Employees Retirement Act, a member of the retirement board, employee of the retirement board or any person connected with the retirement board in any manner shall not:
(1) have any direct or indirect interest in the gains or profits of any investment made by the retirement board;
(2) receive any direct or indirect pay or emolument for services provided to the retirement board or the association;
(3) directly or indirectly, for the member, employee or person, for themselves or as agent or partner of others, borrow any of the funds or deposits of the association or in any manner use them except to make current and necessary payments authorized by the retirement board; or
(4) become an endorser or surety or become in any manner an obligor for money of the retirement board loaned or borrowed."
Section 20. A new section of the Public Employees Retirement Act is enacted to read:
"[NEW MATERIAL] CALCULATION OF FINAL AVERAGE SALARY.--Under each coverage plan of the Public Employees Retirement Act, the final average salary is one thirty-sixth of the greatest aggregate amount of salary paid a member for thirty-six consecutive but not necessarily continuous months of service credit; provided, however, if the salary paid in any year beginning on or after July 1, 2010 exceeds that of the previous year by more than thirty-five percent:
A. the amount in excess of thirty-five percent shall be excluded in the computation of final average salary; and
B. the salary, as adjusted to exclude any increase over the thirty-five percent limitation, shall be used to determine if the salary paid in the subsequent year exceeds the thirty-five percent limitation."
Section 21. Section 22-11-13 NMSA 1978 (being Laws 1967, Chapter 16, Section 137, as amended) is amended to read:
"22-11-13. BOARD AUTHORITY TO INVEST THE FUND--PRUDENT INVESTOR STANDARD--INDEMNIFICATION OF BOARD.--
A. The board is authorized to invest or reinvest the fund in accordance with the Uniform Prudent Investor Act.
B. The board shall provide quarterly performance reports to the legislative finance committee and the department of finance and administration. Annually, the board shall ratify and provide its written investment policy, including any amendments, to the legislative finance committee and the department of finance and administration.
C. The board or its designated agent may enter into contracts for the temporary exchange of securities for the use by broker-dealers, banks or other recognized institutional investors, for periods not to exceed one year, for a specified fee or consideration. Such a contract shall not be entered into unless the contract is fully secured by a collateralized, irrevocable letter of credit running to the board, cash or equivalent collateral of at least one hundred two percent of the market value of the securities plus accrued interest temporarily exchanged. This collateral shall be delivered to the state fiscal agent or its designee contemporaneously with the transfer of funds or delivery of the securities. Such contract may authorize the board to invest cash collateral in instruments or securities that are authorized fund investments and may authorize payment of a fee from the fund or from income generated by the investment of cash collateral to the borrower of securities providing cash as collateral. The board may apportion income derived from the investment of cash collateral to pay its agent in securities lending transactions.
D. Commissions paid for the purchase or sale of any securities pursuant to the provisions of the Educational Retirement Act shall not exceed brokerage rates prescribed and approved by national stock exchanges or by industry practice.
E. Securities purchased for the fund shall be held in the custody of the state treasurer. At the direction of the board, the state treasurer shall deposit with a bank or trust company the securities for safekeeping or servicing.
F. The board may consult with the state investment council or the state investment officer; may request from the state investment council or the state investment officer any information, advice or recommendations with respect to investment of the fund; may utilize the services of the state investment council or the state investment officer; and may act upon any advice or recommendations of the state investment council or the state investment officer. The state investment council or the state investment officer shall render investment advisory services to the board upon request and without expense to the board. The board may also employ the investment management services and related management services of a trust company or national bank exercising trust powers or of an investment counseling firm or brokers for the purchase and sale of securities, commission recapture and transitioning services and may pay reasonable compensation for those services from funds administered by the board.
G. The board shall annually provide for its members no less than eight hours of training in pension fund investing, fiduciary obligations or ethics. A member elected or appointed to the board who fails to attend the training for two consecutive years shall be deemed to have resigned from the board.
[G.] H. Members of the board, jointly and individually, shall be indemnified from the fund by the state from all claims, demands, suits, actions, damages, judgments, costs, charges and expenses, including court costs and attorney fees, and against all liability, losses and damages of any nature whatsoever that members shall or may at any time sustain by reason of any decision made in the performance of their duties pursuant to this section."
Section 22. Section 22-11-23 NMSA 1978 (being Laws 1981, Chapter 293, Section 2, as amended) is amended to read:
"22-11-23. RETIREMENT ELIGIBILITY--INITIAL MEMBERSHIP PRIOR TO JULY 1, 2010.--
A. [On and after July 1, 1984] The retirement eligibility for a member who either was a member on June 30, 2010, or was a member at any time prior to that date and had not, on that date, been refunded all member contributions pursuant to Subsection A of Section 22-11-15 NMSA 1978, is as follows:
(1) a member shall be eligible for retirement benefits pursuant to the Educational Retirement Act when either of the following conditions occurs:
(a) the sum of the member's age and years of earned service-credit equals seventy-five; or
(b) upon completion of five years of earned service-credit and upon becoming sixty-five years of age;
(2) a member under sixty years of age eligible to retire under Paragraph (1) of this subsection may retire and receive retirement benefits pursuant to the Educational Retirement Act that [he] the member would be eligible to receive if [he] the member were to retire at the age of sixty years reduced by six-tenths of one percent for each one-fourth, or portion thereof, year that retirement occurs prior to the member's sixtieth [birthdate] birthday but after the fifty-fifth [birthdate] birthday, and one and eight-tenths percent for each one-fourth, or portion thereof, year that retirement occurs prior to age fifty-five; or
(3) a member under sixty years of age acquiring twenty-five or more years of earned and allowed service credit may retire and receive retirement benefits pursuant to the Educational Retirement Act computed on the same basis as if the member were sixty years of age.
B. A member shall be subject to the provisions of Paragraphs (2) and (3) of Subsection A of this section as they existed at the beginning of [his] the member's last cumulated four quarters of earned service-credit, regardless of later amendment."
Section 23. A new section of the Educational Retirement Act, Section 22-11-23.1 NMSA 1978, is enacted to read:
"22-11-23.1. [NEW MATERIAL] RETIREMENT ELIGIBILITY--INITIAL MEMBERSHIP ON OR AFTER JULY 1, 2010.--
A. A member who initially became a member on or after July 1, 2010 or a member who was a member at any time prior to that date and had, before that date, been refunded all member contributions pursuant to Subsection A of Section 22-11-15 NMSA 1978, shall be eligible for retirement benefits pursuant to the Educational Retirement Act when one of the following conditions occurs:
(1) the member is any age and has thirty or more years of earned service credit;
(2) the member is at least sixty-seven years of age and has five or more years of earned service credit; or
(3) the sum of the member's age and years of earned service credit equals at least eighty; provided that a member who retires pursuant to this paragraph shall be subject to the benefit reductions provided in Paragraphs (1) and (2) of Subsection H of Section 22-11-30 NMSA 1978.
B. A member shall be subject to the provisions of this section as they existed at the beginning of the member's last cumulated four quarters of earned service credit, regardless of later amendment."
Section 24. Section 22-11-25.1 NMSA 1978 (being Laws 2001, Chapter 283, Section 2, as amended by Laws 2003, Chapter 80, Section 1 and by Laws 2003, Chapter 145, Section 1) is amended to read:
"22-11-25.1. RETURN TO EMPLOYMENT--BENEFITS CONTINUED--ADMINISTRATIVE UNIT CONTRIBUTIONS.--
A. Except as provided in Subsections B and [E] F of this section, beginning January 1, 2002 and continuing until January 1, [2012] 2022, a retired member may begin employment at a local administrative unit and shall not be required to suspend retirement benefits if the member has not [been employed as an employee or independent contractor by] rendered service to a local administrative unit for at least twelve consecutive months [from] after the date of retirement [to the commencement of employment or reemployment with a local administrative unit]. If the retired member returns to employment without first completing twelve consecutive months of retirement, the retired member shall remove himself or herself from retirement.
B. A retired member who was retired on or before January 1, 2001 and has not since suspended or been required to suspend retirement benefits pursuant to the Educational Retirement Act [and is reemployed by a local administrative unit may continue employment at the] may, at any time prior to January 1, 2022, return to employment for a local administrative unit and shall not be required to suspend retirement benefits.
C. A retired member who returns to employment during retirement pursuant to Subsection A, [or] B or F of this section is entitled to continue to receive retirement benefits but is not entitled to acquire service credit or to acquire or purchase service credit in the future for the period of the retired member's reemployment with a local administrative unit.
D. A retired member shall not be eligible to return to employment pursuant to Subsection A, B or F of this section unless an application to return to work, on a form prescribed by the board, has been submitted to, and approved by, the board and the applicant has complied with such other rules as promulgated by the board.
[D.] E. A retired member who returns to employment pursuant to [Subsections] Subsection A, [or] B or F of this section shall not make contributions to the fund as specified in the Educational Retirement Act; however, the local administrative [unit's contributions as specified in that act shall be paid to the fund as] unit employing the retired member shall pay to the fund an amount equal to the total of the member contributions and the local administrative unit contributions that would be required pursuant to Section 22-11-21 NMSA 1978 if the retired member was a non-retired employee.
[E.] F. Beginning July 1, 2003 and continuing until January 1, [2012] 2022, a retired member who retired on or before January 1, 2001, [and who has not been employed as an employee or independent contractor by] who subsequently voluntarily suspended or was required to suspend retirement benefits and who has not rendered service to a local administrative unit for at least ninety days may begin employment at a local administrative unit without suspending retirement benefits if the retired member was not employed by a local administrative unit for an additional twelve or more consecutive months after the initial date of the retirement; provided that the ninety-day period shall not include any part of a summer or other scheduled break or vacation period.
G. Both the retired member who returns to employment and the local administrative unit that employs the retired member shall make contributions to the retiree health care fund in the amount specified in Subsections A and B of Section 10-7C-15 NMSA 1978.
H. As used in Subsections A and F of this section:
(1) "rendered service to a local administrative unit" includes employment by a local administrative unit, whether full or part time; substitute teaching; voluntarily performing duties for a local administrative unit that would otherwise be, or in the past have been, performed by a paid employee or independent contractor; or performing duties for a local administrative unit as an independent contractor or an employee of an independent contractor; and
(2) "local administrative unit" includes any entity incorporated, formed or otherwise organized by, or subject to the control of a local administrative unit, whether or not the entity is created for profit or nonprofit purposes."
Section 25. Section 22-11-30 NMSA 1978 (being Laws 1967, Chapter 16, Section 153, as amended) is amended to read:
"22-11-30. RETIREMENT BENEFITS.--
A. Retirement benefits for a member retired pursuant to the Educational Retirement Act on or before June 30, 1967 shall be paid monthly and shall be one-twelfth of a sum equal to one and one-half percent of the first four thousand dollars ($4,000) of the member's average annual salary and one percent of the remainder of the member's average annual salary multiplied by the number of years of the member's total service credit.
B. Retirement benefits for a member retired pursuant to the Educational Retirement Act on or after July 1, 1967 but on or before June 30, 1971 shall be paid monthly and shall be one-twelfth of a sum equal to one and one-half percent of the first six thousand six hundred dollars ($6,600) of the member's average annual salary and one percent of the remainder of the member's average annual salary multiplied by the number of years of the member's total service credit.
C. Retirement benefits for a member retired pursuant to the Educational Retirement Act on or after July 1, 1971 but on or before June 30, 1974 shall be paid monthly and shall be one-twelfth of a sum equal to one and one-half percent of the member's average annual salary multiplied by the number of years of the member's total service credit.
D. Retirement benefits for a member retired pursuant to the Educational Retirement Act on or before June 30, 1974 but returning to employment on or after July 1, 1974 for a cumulation of one or more years shall be computed pursuant to Subsection E of this section. Retirement benefits for a member retired pursuant to the Educational Retirement Act on or before June 30, 1974 but returning to employment on or after July 1, 1974 for a cumulation of less than one year shall be computed pursuant to Subsection A of this section if [his] the member's date of last retirement was on or before June 30, 1967 or pursuant to Subsection B of this section if [his] the member's date of last retirement was on or after July 1, 1967 but not later than June 30, 1971 or pursuant to Subsection C of this section if [his] the member's date of last retirement was on or after July 1, 1971 but not later than June 30, 1974.
E. Retirement benefits for a member age sixty or over, retired pursuant to the Educational Retirement Act on or after July 1, 1974 but not later than June 30, 1987, shall be paid monthly and shall be one-twelfth of a sum equal to:
(1) one and one-half percent of the member's average annual salary multiplied by the number of years of service credit for:
(a) prior employment; and
(b) allowed service credit for service performed prior to July 1, 1957, except United States military service credit purchased pursuant to Paragraph (3) of Subsection A of Section 22-11-34 NMSA 1978; plus
(2) two percent of the member's average annual salary multiplied by the number of years of service credit for:
(a) contributory employment;
(b) allowed service credit for service performed after July 1, 1957; and
(c) United States military service credit for service performed prior to July 1, 1957 and purchased pursuant to Paragraph (3) of Subsection A of Section 22-11-34 NMSA 1978.
F. Retirement benefits for a member age sixty or over, retired pursuant to the Educational Retirement Act on or after July 1, 1987 but not later than June 30, 1991, shall be paid monthly and shall be one-twelfth of a sum equal to two and fifteen hundredths percent of the member's average annual salary multiplied by the number of years of the member's total service credit; provided that this subsection shall not apply to any member who was retired in any of the four quarters ending on June 30, 1987 without having accumulated not less than 1.0 years earned service credit after June 30, 1987.
G. Retirement benefits for a member age sixty or over, retired pursuant to [the Educational Retirement Act] Section 22-11-23 NMSA 1978 on or after July 1, 1991, shall be paid monthly and shall be one-twelfth of a sum equal to two and thirty-five hundredths percent of the member's average annual salary multiplied by the number of years of the member's total service credit; provided that this subsection shall not apply to any member who was retired in any of the four consecutive quarters ending on June 30, 1991 without having accumulated at least one year earned service credit beginning on or after July 1, 1991.
H. Retirement benefits for a member, retired pursuant to Section 22-11-23.1 NMSA 1978, shall be paid monthly and shall be one-twelfth of a sum equal to two and thirty-five hundredths percent of the member's average annual salary multiplied by the number of years of the member's total service credit; provided that the benefit for a member retiring pursuant to Paragraph (3) of Subsection A of Section 22-11-23.1 NMSA 1978 shall be reduced by:
(1) six-tenths of one percent for each one-fourth, or portion thereof, year that retirement occurs prior to the member's sixty-fifth birthday but after the sixtieth birthday; and
(2) one and eight-tenths percent for each one-fourth, or portion thereof, year that retirement occurs prior to the member's sixtieth birthday.
[H.] I. A member's average annual salary, pursuant to this section, shall be computed on the basis of the last five years for which contribution was made or upon the basis of any consecutive five years for which contribution was made by the member, whichever is higher; provided, however:
(1) if the salary paid in any year beginning on or after July 1, 2010 exceeds that of the previous year by more than thirty-five percent:
(a) the amount in excess of thirty-five percent shall be excluded in the computation of average annual salary; and
(b) the salary, as adjusted to exclude any increase over the thirty-five percent limitation, shall be used to determine if the salary paid in the subsequent year exceeds the thirty-five percent limitation; and
(2) lump-sum payments made after July 1, 2010 of accrued sick leave or annual leave shall be excluded from the calculation of salary.
J. Unless otherwise required by the provisions of the Internal Revenue Code of 1986, members shall begin receiving retirement benefits by age seventy and six months, or upon termination of employment, whichever occurs later."
Section 26. 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 [he] 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 [his] the member's employment in New Mexico if [he] the member returned to [his] employment within eighteen months 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 [he] the member was honorably discharged [if he contributes to the fund a sum equal to ten and one-half percent of his average annual salary for that period of time for which he has acquired earned service credit pursuant to the Educational Retirement Act and subject to the federal Uniformed Services Employment and Reemployment Rights Act of 1994 for each year of service credit he desires to purchase. Average annual salary shall be determined in accordance with rules promulgated by the board but shall always be based on actual salaries earned by the member where the actual salaries can be ascertained by the board. The employer's contributions for service credit shall not be paid by the employer. The purchase of service credit provided in this section shall be carried out by the member within three years after the date of the member's employment following service; or]; 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 in a single lump sum within sixty 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 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 [state board] 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. Payment pursuant to Paragraph (4) of Subsection A of this section may be made in installments, at the discretion of the board, over a period not to exceed one year and, if the sum paid does not equal the amount required for any full year of allowed service credit, the member shall acquire allowed service credit for that period of time that is proportionate to the payment made. Half credit may be allowed without contribution for not more than ten years of the educational service described by Subparagraph (a) of Paragraph (4) of Subsection A of this section if that service was prior to June 13, 1953 and if the member was employed in New Mexico prior to June 13, 1953 in a position covered by the Educational Retirement Act or a law repealed by that act. 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 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.
[D.] E. The provisions of this section are made applicable to the services described prior to as well as after the effective date of the Educational Retirement Act."
Section 27. TEMPORARY PROVISION--RETIREMENT SYSTEMS SOLVENCY TASK FORCE--CREATION--DUTIES--REPORT.--
A. The "retirement systems solvency task force" is created. The task force consists of twenty-five members as follows:
(1) the director of the public employees retirement association and a member of the public employees retirement board, selected by the board;
(2) the educational retirement director and a member of the educational retirement board, selected by the board;
(3) the director of the retiree health care authority and a member of the board of the retiree health care authority, selected by the board;
(4) one member from each of the following organizations that represent members of the public employees retirement association or members under the Educational Retirement Act:
(a) the American federation of state, county and municipal employees;
(b) the communications workers of America;
(c) the international association of firefighters;
(d) the fraternal order of police;
(e) the national education association; and
(f) the American federation of teachers;
(5) the chair and vice chair of the interim investments and pensions oversight committee; provided that, if that interim committee is not created, then the New Mexico legislative council shall appoint the chair and vice chair of the appropriate interim committee;
(6) a representative of the New Mexico municipal league;
(7) a representative of the New Mexico association of counties;
(8) two majority party members and one minority party member of the house of representatives, appointed by the New Mexico legislative council;
(9) two majority party members and one minority party member of the senate, appointed by the New Mexico legislative council; and
(10) three members appointed by the governor, at least one of whom shall be experienced in financial investing of pension funds.
B. The chair of the task force shall be elected by the task force. The task force shall meet at the call of the chair.
C. The public members of the task force shall receive per diem and mileage pursuant to the Per Diem and Mileage Act.
D. The legislative council service, with assistance from the legislative finance committee, the public employees retirement association, the educational retirement association and the retiree health care authority, shall provide staff for the task force.
E. The task force shall study the actuarial soundness and solvency of the retirement plans of the public employees retirement association and the educational retirement association and the health care plan of the retiree health care authority and prepare a solvency plan for each entity. The solvency plans shall include analyses and recommendations that address:
(1) employer and employee contributions;
(2) retirement eligibility;
(3) the number of retirement plans;
(4) retirement benefits;
(5) investment policy and asset allocation;
(6) disability retirement and benefits;
(7) actuarial assumptions;
(8) health insurance plan benefits and eligibility;
(9) the costs of health insurance plans; and
(10) member services.
F. The solvency plans and recommendations shall be submitted, no later than October 1, 2009, to the interim investments and pensions oversight committee or other appropriate interim committee, the legislative finance committee and the governor.
Section 28. REPEAL.--Sections 10-11-26.4, 10-11-30, 10-11-38.4, 10-11-47, 10-11-53, 10-11-55.4, 10-11-55.10, 10-11-59, 10-11-65, 10-11-71, 10-11-77, 10-11-83, 10-11-89, 10-11-95, 10-11-101, 10-11-107, 10-11-113 and 10-11-115.4 NMSA 1978 (being Laws 1994, Chapter 128, Section 5, Laws 1987, Chapter 253, Section 30, Laws 1994, Chapter 128, Section 12, Laws 1987, Chapter 253, Sections 47 and 53, Laws 1993, Chapter 58, Section 4, Laws 1998, Chapter 106, Section 4, Laws 1987, Chapter 253, Sections 59, 65, 71, 77, 83, 89, 95, 101, 107 and 113 and Laws 2003, Chapter 268, Section 5, as amended) are repealed.
Section 29. EFFECTIVE DATES.--
A. The effective date of the provisions of Sections 1 through 5, 19, 21, 24 and 26 of this act is July 1, 2009.
B. The effective date of the provisions of Sections 6 through 18, 20, 22, 23, 25 and 28 of this act is July 1, 2010.
Section 30. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.
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