SENATE BILL 572
49th legislature - STATE OF NEW MEXICO - first session, 2009
INTRODUCED BY
Mary Jane M. Garcia
AN ACT
RELATING TO EDUCATIONAL RETIREMENT; PROVIDING CERTAIN CONDITIONS AND OPTIONS FOR EMPLOYEES IN ALTERNATIVE RETIREMENT PLANS; CHANGING THE BENEFITS AVAILABLE UNDER ALTERNATIVE RETIREMENT PLANS; CLARIFYING THE PORTABILITY OF THE PLANS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 22-11-47 NMSA 1978 (being Laws 1991, Chapter 118, Section 5, as amended) is amended to read:
"22-11-47. ALTERNATIVE RETIREMENT PLAN--ELECTION OF COVERAGE.--
A. Beginning October 1, 1991, any employee of the university of New Mexico, New Mexico state university, New Mexico institute of mining and technology, New Mexico highlands university, eastern New Mexico university or western New Mexico university who is eligible to become a participant may make within ninety days of that date an [irrevocable] election to participate in the alternative retirement plan. Beginning October 1, 1999, an employee of central New Mexico community college, Clovis community college, Luna community college, Mesalands community college, New Mexico junior college, northern New Mexico college, San Juan college or Santa Fe community college who is eligible to become a participant may make an [irrevocable] election to participate in the alternative retirement plan within ninety days of the initial date. Thereafter, any employee who is eligible to become a participant may make within the first ninety days of employment with a qualifying state educational institution an [irrevocable] election to participate in the alternative retirement plan. Any employee who makes the irrevocable election shall become a participant the first day of the first pay period following the election. Any employee who fails to make the [irrevocable] election within ninety days of October 1, 1991 or October 1, 1999, whichever is applicable, or within the first ninety days of employment with a qualifying state educational institution shall become or remain a regular member if that employee is eligible to be a regular member and shall not later be eligible to elect to be a participant, regardless of whether the employee subsequently is employed in another position that is eligible for participation in the alternative retirement plan. Except as provided in Subsection D of this section, an election to become a participant is irrevocable.
B. Until the time an employee who is eligible to become a participant elects to participate in the alternative retirement plan, that employee shall be a regular member.
C. When an employee elects to become a participant, any employer and employee contributions made as a regular member shall be withdrawn from the fund and applied instead toward the alternative retirement plan as if the participant had been participating in the alternative retirement plan from the commencement of employment with the qualifying state educational institution.
D. On July 1, 2009, any participant who has made contributions to the alternative retirement plan for a cumulative total of seven years or more shall have a one-time option of electing to become a regular member. Thereafter, once a participant has made contributions to the alternative retirement plan for a cumulative total of seven years, a participant shall have a one-time option of electing to become a regular member. Participants electing to become regular members shall exercise that option within one hundred twenty days of the date of becoming eligible to elect to become a regular member. Any amounts on deposit in an employee's alternative retirement plan account when a participant becomes a regular member shall remain on deposit with the contractor or carrier subject to that plan's provisions, unless otherwise provided by law. An employee who elects to become a regular member under this subsection shall use the date on which the employee was first employed with a qualifying state educational institution for purposes of determining any retirement eligibility requirement, provided that the employee:
(1) may not purchase service credit for periods of employment during which the employee participated in the alternative retirement plan; and
(2) shall acquire not less than five years of contributory employment as a regular member as provided for in Section 22-11-24 NMSA 1978 to be eligible for retirement benefits pursuant to the Educational Retirement Act.
E. The board shall approve the positions at each qualifying state educational institution that are eligible for participation in the alternative retirement plan."
Section 2. Section 22-11-51 NMSA 1978 (being Laws 1991, Chapter 118, Section 9, as amended) is amended to read:
"22-11-51. ALTERNATIVE RETIREMENT PLANS--BENEFITS--TRANSFER UPON UNEMPLOYMENT.--
A. No retirement, death or other benefit shall be paid by the board from the fund for services credited under the alternative retirement plan. Such benefits are payable to participants or their beneficiaries only by the appropriate alternative retirement plan contractor or carrier in accordance with the terms of the applicable contracts or certificates; provided, however, that retirement benefits shall, at the option of the participant, be paid in the form of a lifetime income, [and, except for death benefits, single sum cash payments shall not be permitted] if held in an annuity contract; payments for a term of years; or a single-sum cash payment.
B. Upon termination of employment with a qualifying state educational institution, a participant may transfer or roll over the account balance to another eligible retirement plan or may withdraw the balance as permitted for a plan qualified under Section 401(a) of the Internal Revenue Code of 1986."
Section 3. Section 22-11-52 NMSA 1978 (being Laws 1991, Chapter 118, Section 10) is amended to read:
"22-11-52. ALTERNATIVE RETIREMENT PLAN--SELECTION OF CONTRACTOR OR CARRIER--ADMINISTRATION.--
A. The board shall solicit and review proposals for providing retirement, death and any other benefits deemed desirable by the board for participants in the alternative retirement plan. The board shall solicit proposals for providing the benefits through contracts or investments held in trust or a custodial account that meets the requirements of Section 401(a) or 403(a) of the Internal Revenue Code of 1986, including, without limitation, annuity contracts or certificates that are fixed or variable in nature or some combination thereof.
B. The board, after consultation with the qualifying state educational institutions, shall select no less than two nor more than [three] five contractors or carriers to provide the contracts or certificates. In making its selection, the board shall consider, among other things, the following criteria:
(1) the portability of the benefits offered, based upon the number of states and institutions of higher education in which the offeror provides similar benefits;
(2) the nature and extent of the rights and benefits that would be provided to the participants, including the right to maintain their accounts or to transfer the balance to another eligible retirement plan upon termination of employment with the qualifying educational institution, to the extent permitted for a plan qualified under Section 401(a) of the Internal Revenue Code of 1986;
(3) the relation of the rights and benefits to the contributions that would be made by the participants and the qualifying state educational institutions;
(4) the ability of the offeror to provide the rights and benefits;
(5) the suitability of the rights and benefits for recruitment and retention of employees by the qualifying state educational institutions; and
(6) compliance with the requirements of the Educational Retirement Act and Section 401(a) or 403(a) of the Internal Revenue Code of 1986.
C. The board shall provide for the administration and maintenance of the alternative retirement plan and may adopt rules and regulations for that purpose."
Section 4. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2009.
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