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F I S C A L I M P A C T R E P O R T



SPONSOR: Campos DATE TYPED: 02/28/01 HB
SHORT TITLE: Amend Educational Retirement Act SB 666
ANALYST: Eaton

APPROPRIATION



Appropriation Contained
Estimated Additional Impact
 Recurring

or Non-Rec

 Fund

Affected

FY01 FY02 FY01 FY02
Unknown Unknown Recurring General Fund



(Parenthesis ( ) Indicate Expenditure Decreases)



SOURCES OF INFORMATION



LFC files



SUMMARY



Synopsis of Bill



This bill would allow employees of the department of education, the board, the New Mexico activities association, the New Mexico boys' school, the New Mexico girls' school, the Los Lunas medical center or a state agency providing an educational program who is a member of ERA and who has not elected to be a PERA member, to be covered under a new educational retirement plan that mirrors the state general retirement plan offered by PERA.



The member would have to be vested three years under the new plan to be eligible to receive retirement benefits under the new plan.



Significant Issues



In discussion with ERA staff as well as PERA staff, there was a time when the ERA retirement plan was better than the PERA retirement plan and many members who could choose between the two plans chose the ERA plan. Currently, the PERA plan has better benefits at retirement and this bill would allow those ERA members and all other future members of the said agencies to receive a PERA-like retirement after three additional years of service credit.



FISCAL IMPLICATIONS



The contribution rates in the new ERA retirement plan proposed in this bill are higher than what is required under the (current) ERA plan. Because the employer (and member) contributions are increased, this bill will require an additional appropriation in the general appropriation act for those affected employees in those eligible agencies. It is unknown at this time the amount of that additional appropriation.



ADMINISTRATIVE IMPLICATIONS



Unknown.



JBE/sb