44th legislature - STATE OF NEW MEXICO - second session, 2000

RELATING TO EDUCATIONAL RETIREMENT; PROVIDING THAT CERTAIN EMPLOYEES WITH QUALIFYING RETIREMENT PLANS MAY ELECT TO BE EXEMPT FROM THE PROVISIONS OF THE EDUCATIONAL RETIREMENT ACT.

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

Section 1. Section 22-11-2 NMSA 1978 (being Laws 1967, Chapter 16, Section 126, as amended) is amended to read:

"22-11-2. DEFINITIONS.--As used in the Educational Retirement Act:

A. "member" means [any] an employee, except for: [a participant coming within the provisions of the Educational Retirement Act]

(1) a participant; or

(2) an employee of the physical science laboratory at New Mexico state university who elects to be exempt pursuant to Section 22-11-46 NMSA 1978;

B. "regular member" means:

(1) a person regularly employed as a teaching, nursing or administrative employee of a state educational institution, except for:

(a) a participant; or

(b) all employees of a general hospital or outpatient clinics thereof operated by a state educational institution named in Article 12, Section 11 of the constitution of New Mexico;

(2) a person regularly employed as a teaching, nursing or administrative employee of a junior college or community college created pursuant to Chapter 21, Article 13 NMSA 1978, except for a participant;

(3) a person regularly employed as a teaching, nursing or administrative employee of a technical and vocational institute created pursuant to the Technical and Vocational Institute Act, except for a participant;

(4) a person regularly employed as a teaching, nursing or administrative employee of the New Mexico boys' school, the New Mexico girls' school, the Los Lunas medical center or a school district or as a certified school instructor of a state institution or agency providing an educational program and holding a standard or substandard certificate issued by the state board, except for a participant;

(5) a person regularly employed by the department of education or the board holding a standard or substandard certificate issued by the state board at the time of commencement of such employment;

(6) a member classified as a regular member in accordance with the [regulations] rules of the board;

(7) a person regularly employed by the New Mexico activities association holding a standard certificate issued by the state board at the time of commencement of such employment; or

(8) a person regularly employed by a regional education cooperative holding a standard certificate issued by the state board at the time of commencement of such employment;

C. "provisional member" means a person not eligible to be a regular member but who is employed by a local administrative unit designated in Subsection B of this section; provided, however, that employees of a general hospital or outpatient clinics thereof operated by a state educational institution named in Article 12, Section 11 of the constitution of New Mexico are not provisional members;

D. "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;

E. "beneficiary" means a person having an insurable interest in the life of a member or a participant designated by written instrument duly executed by the member or participant and filed with the director to receive a benefit pursuant to the Educational Retirement Act that may be received by someone other than the member or participant;

F. "employment" means employment by a local administrative unit that qualifies a person to be a member or participant;

G. "service employment" means employment that qualifies a person to be a regular member;

H. "provisional service employment" means employment that qualifies a person to be a provisional member;

I. "prior employment" means employment performed prior to the effective date of the Educational Retirement Act that would be service employment or provisional service employment if performed thereafter;

J. "service credit" means that period of time with which a member is accredited for the purpose of determining his eligibility for and computation of retirement or disability benefits;

K. "earned service credit" means that period of time during which a member was engaged in employment or prior employment with which he is accredited for the purpose of determining his eligibility for retirement or disability benefits;

L. "allowed service credit" means that period of time during which a member has performed certain nonservice employment with which he may be accredited, as provided in the Educational Retirement Act, for the purpose of computing retirement or disability benefits;

M. "retirement benefit" means an annuity paid monthly to members whose employment has been terminated by reason of their age;

N. "disability benefit" means an annuity paid monthly to members whose employment has been terminated by reason of a disability;

O. "board" means the educational retirement board;

P. "fund" means the educational retirement fund;

Q. "director" means the educational retirement director;

R. "medical authority" means a medical doctor within the state or as provided in Subsection D of Section 22-11-36 NMSA 1978 either designated or employed by the board to examine and report on the physical condition of applicants for or recipients of disability benefits;

S. "actuary" means a person trained and regularly engaged in the occupation of calculating present and projected monetary assets and liabilities under annuity or insurance programs;

T. "actuarial equivalent" means a sum paid as a current or deferred benefit that is equal in value to a regular benefit, computed upon the basis of interest rates and mortality tables;

U. "contributory employment" means employment for which contributions have been made by both a member and a local administrative unit pursuant to the Educational Retirement Act;

V. "qualifying state educational institution" means the university of New Mexico, New Mexico state university, New Mexico institute of mining and technology, New Mexico highlands university, eastern New Mexico university, western New Mexico university, Albuquerque technical-vocational institute, Clovis community college, Luna vocational-technical institute, Mesa technical college, New Mexico junior college, northern New Mexico state school, San Juan college and Santa Fe community college;

W. "participant" means:

(1) a person regularly employed as a faculty or professional 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 first becomes employed with such an educational institution on or after July 1, 1991, or a person regularly employed as a faculty or professional employee of the Albuquerque technical-vocational institute, Clovis community college, Luna vocational-technical institute, Mesa technical college, New Mexico junior college, northern New Mexico state school, San Juan college or Santa Fe community college who is first employed by the institution on or after July 1, 1999 and who elects, pursuant to Section 22-11-47 NMSA 1978, to participate in the alternative retirement plan; and

(2) a person regularly employed who performs research or other services pursuant to a contract between a qualifying state educational institution and the United States government or any of its agencies who elects, pursuant to Section 22-11-47 NMSA 1978, to participate in the alternative retirement plan, provided that the research or other services are performed outside the state;

X. "salary" means the compensation or wages paid to a member or participant by any local administrative unit for services rendered; and

Y. "alternative retirement plan" means the retirement plan provided for in Sections 22-11-47 through 22-11-52 NMSA 1978."

Section 2. A new section of the Educational Retirement Act, Section 22-11-46 NMSA 1978, is enacted to read:

"22-11-46. [NEW MATERIAL] EXEMPTION FROM COVERAGE--EMPLOYEES OF THE PHYSICAL SCIENCE LABORATORY WITH QUALIFYING RETIREMENT PLANS.--

A. An employee of the physical science laboratory at New Mexico state university may elect to be exempted from membership pursuant to the Educational Retirement Act if:

(1) the application for the exemption is filed with the director on forms promulgated by the board;

(2) the election is made:

(a) no later than September 30, 2000 for an employee who was employed by the laboratory on January 1, 2000 and had less than five years of contributory employment on January 1, 2000; or

(b) within nine months of beginning employment with the laboratory, if the employee was initially hired after January 1, 2000; and

(3) the employee shows, pursuant to rule of the board, that the employee is a member of a designated retirement plan that meets the requirement for a qualifying plan pursuant to the Internal Revenue Code of 1986, as amended.

B. An election filed pursuant to Subsection A of this section shall be approved by the director if he finds that the requirements of that subsection have been met. Upon approval by the director:

(1) the employee shall be removed as a member;

(2) the employee shall receive no retirement, death or other benefit from the fund except as provided in this section;

(3) the director shall transfer an amount equal to the total of the employee's and the employer's previous contributions to the fund plus interest at the average rate earned by the fund during the preceding five fiscal years to the employee's designated qualifying plan;

(4) each employee shall contribute to the designated qualifying plan a minimum amount equal to three percent of the employee's salary. The contribution shall be deducted from the employee's salary by New Mexico state university as the salary is paid and forwarded monthly to the designated qualifying plan; and

(5) New Mexico state university may contribute on behalf of the employee a matching contribution up to the contribution that would have been required of the university if the employee were a regular member. The contribution shall be made monthly by the university to the designated qualifying plan."