HOUSE BILL 33
53rd legislature - STATE OF NEW MEXICO - first session, 2017
INTRODUCED BY
Roberto "Bobby" J. Gonzales and Tomás E. Salazar
AN ACT
RELATING TO DEFERRED COMPENSATION; AMENDING THE DEFERRED COMPENSATION ACT TO UPDATE DEFINITIONS, INVESTMENT OPTIONS, TRANSMISSION METHOD AND FILING AND NOTIFICATION REQUIREMENTS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 10-7A-2 NMSA 1978 (being Laws 1981, Chapter 155, Section 2, as amended) is amended to read:
"10-7A-2. DEFINITIONS.--As used in the Deferred Compensation Act:
A. "board" means the public [employees'] employees retirement board;
B. "local public body" means all political subdivisions of the state, their agencies, instrumentalities and institutions;
C. "local public employee" means any officer or employee to whom a local public body pays a salary for services rendered;
D. "deferred compensation carriers" means any corporation, partnership or persons [who provide investment options] providing administrative, recordkeeping or investment consulting services to participants in deferred compensation plans pursuant to funding agreements; and
E. "state employee" means any officer or employee to whom the state pays a salary for services rendered."
SECTION 2. Section 10-7A-3 NMSA 1978 (being Laws 1984, Chapter 127, Section 988.1, as amended) is amended to read:
"10-7A-3. DEFERRED COMPENSATION PLAN--STATE AND LOCAL PUBLIC [BODY] EMPLOYEES.--
A. After the effective date of the Deferred Compensation Act, the board shall review and approve deferred compensation plans for participation by state and local public employees. A deferred compensation plan shall provide for the method of transfer of funds to a plan through written or electronic salary reduction agreements with state and local public employees and shall provide for deferral of only those salary amounts upon which income taxes are eligible for deferral pursuant to federal law.
B. Compensation deferred under any deferred compensation plan shall be included with current income for purposes of computing retirement contributions and benefits.
C. Amounts by which salary is reduced shall be transmitted [to the state treasurer or his designated agent who shall then transfer such amounts directly] to the approved deferred compensation carrier.
D. Local public employees may [through formal action of their governing boards] participate in a deferred compensation plan selected by [such governing board] their local public body employer after it takes formal action conforming to board requirements. If the plan selected is different from the plan approved by the board, the board shall have no responsibility concerning the plan. If the plan selected is that approved by the board pursuant to Section 10-7A-5 NMSA 1978, [participation by employees of the local public body so selecting is effected pursuant to] the provisions of Section 10-7A-8 NMSA 1978 shall apply."
SECTION 3. Section 10-7A-5 NMSA 1978 (being Laws 1984, Chapter 127, Section 988.2, as amended) is amended to read:
"10-7A-5. DEFERRED COMPENSATION PLAN--APPROVAL.--
A. The board shall review proposals providing investment options to participants of a deferred compensation plan submitted by deferred compensation carriers [which] that have been engaged for a minimum of three years in the business of funding public employee deferred compensation plans authorized by 26 U.S.C. Section 457 and approve [not more than four such] proposals [which] that are consistent with the goals of providing state or local public employees with an investment that, in the opinion of the board, is safe and will provide a reasonable return to the employees upon their reaching the appropriate age or date at which they may begin receiving funds from the deferred compensation plan.
B. The type of deferred compensation investment options that may be approved include
[(1) life insurance or annuity contracts with insurance companies licensed to conduct such business in New Mexico;
(2)] mutual funds, including stock, bond or capital preservation funds [and money market funds;
(3) deferred compensation investment options of New Mexico banks or savings and loan associations, such banks or savings and loan associations to provide, as security for participants' funds, collateral, such as U.S. treasury securities or other liquid securities, for amounts of participants' funds in excess of applicable depository insurance; and
(4) other deferred compensation investment options, including those created by the board not requiring funding agreements with deferred compensation carriers, deemed] or any other investments determined by the board to fulfill the goals of providing viable deferred compensation for state or local public employees."
SECTION 4. Section 10-7A-8 NMSA 1978 (being Laws 1981, Chapter 155, Section 8, as amended) is amended to read:
"10-7A-8. DEFERRED COMPENSATION PLAN--LOCAL PUBLIC EMPLOYEE PARTICIPATION.--
A. Local public employees shall be eligible to participate in a deferred compensation plan approved by the board upon the filing of [the governing authority's written notice] a local public body's participation agreement, conforming to board requirements, applicable to [all the] its local public employees and such other participants permitted by the plan as the local public body may elect. Such filing shall be made at such dates and places and in such manner as the board [determines] requires.
B. A local public body may terminate its local public employees' and other qualified participants' future participation in a board-approved plan any time not less than two years after the date participation has become effective, upon the [governing authority's] local public body's filing of written or electronic notice [at such dates and places as the] conforming to board [determines] requirements."
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