HOUSE BILL 46

54th legislature - STATE OF NEW MEXICO - second session, 2020

INTRODUCED BY

Tomás E. Salazar

 

 

 

ENDORSED BY THE INVESTMENTS AND PENSIONS OVERSIGHT COMMITTEE

 

AN ACT

RELATING TO EDUCATIONAL RETIREMENT; PROVIDING FOR CERTAIN AUTOMATIC INCREASES IN CONTRIBUTIONS; PROVIDING FOR A DISTRIBUTION FROM THE GROSS RECEIPTS TAX TO THE EDUCATIONAL RETIREMENT FUND; MAKING AN APPROPRIATION.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. Section 22-11-49 NMSA 1978 (being Laws 1991, Chapter 118, Section 7, as amended) is amended to read:

     "22-11-49. ALTERNATIVE RETIREMENT PLAN--CONTRIBUTIONS.--

          A. A participant shall contribute an amount equal to the percentage of the participant's salary that the participant would be required to contribute if the participant were, instead, a regular member. The contribution shall be made as provided by the board.

          B. A qualifying state educational institution shall contribute on behalf of each participant an amount of the participant's salary equal to the contribution that would be required of the employer if the participant were, instead, a regular member. Of that contribution, a sum equal to three and one-fourth percent of the annual salary of each participant shall be paid to the fund, and the remainder of the contribution shall be paid to the alternative retirement plan as provided by the board; provided, however, that on July 1 following any report by the actuary to the board that concludes that less than three and one-fourth percent is required to satisfy the unfunded actuarial liability attributable to the participation of the participants in the alternative retirement plan, then the percentage the actuary determines is the minimum required to satisfy that liability.

          C. Any increase in the local administrative unit contribution rate in Section 22-11-21 NMSA 1978 that is effective on or after July 1, 2020 shall automatically increase the sum of the participant's annual salary to be paid to the fund by an amount equal to the percentage increase in employer contributions.

          [C.] D. Contributions required by this section may be made by a reduction in salary or by a public employer pick-up as provided in the Internal Revenue Code of 1986, as amended."

     SECTION 2. A new section of the Tax Administration Act is enacted to read:

     "[NEW MATERIAL] DISTRIBUTION--GROSS RECEIPTS TAX-- EDUCATIONAL RETIREMENT FUND.--A distribution pursuant to Section 7-1-6.1 NMSA 1978 from the net receipts attributable to the gross receipts tax distributable to the general fund shall be made to the educational retirement fund in the following amounts:

          A. beginning July 1, 2021 and continuing through June 30, 2022, an amount equivalent to seventeen hundredths percent of the annual salaries of all members employed by all local administrative units and participants in the alternative retirement plan under the Educational Retirement Act as of June 30, 2021;

          B. beginning July 1, 2022 and continuing through June 30, 2023, four million one hundred sixty-seven thousand dollars ($4,167,000) plus an amount equivalent to one-fourth percent of the salaries of all members employed by all local administrative units and participants in the alternative retirement plan under the Educational Retirement Act as of June 30, 2022;

          C. beginning July 1, 2023 and thereafter until the educational retirement fund reaches one hundred percent funded status, as determined by the actuaries of the educational retirement board, an amount equivalent to one-fourth percent of the salaries of all members employed by all local administrative units and participants in the alternative retirement plan under the Educational Retirement Act as of the last day for the immediate prior fiscal year; and

          D. as used in this section:

                (1) "alternative retirement plan" means the retirement plan provided for in Sections 22-11-47 through 22-11-52 NMSA 1978;

                (2) "local administrative unit" means an employing agency however constituted that is directly responsible for the payment of compensation for the employment of members or participants under the Educational Retirement Act; and

                (3) "member" means an employee, except for a participant or a retired member, coming within the provisions of the Educational Retirement Act."

     SECTION 3. TRANSFER.--On July 1, 2020, fifty million dollars ($50,000,000) plus an amount equivalent to one percent of the annual salaries of all members employed by a local administrative unit and participants in the alternative retirement plan under the Educational Retirement Act as of June 30, 2019 plus the salary increases to members and participants in fiscal year 2020 in the General Appropriation Act of 2019 shall be transferred from the general fund to the educational retirement fund.

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