46th legislature - STATE OF NEW MEXICO - first session, 2003

RELATING TO EDUCATIONAL RETIREMENT; PROVIDING FOR AN INCREASED MULTIPLIER FOR SERVICE; CHANGING THE FORMULA FOR DETERMINING AVERAGE ANNUAL SALARY; CHANGING CONTRIBUTION REQUIREMENTS.

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

Section 1. Section 22-11-21 NMSA 1978 (being Laws 1967, Chapter 16, Section 144, as amended) is amended to read:

"22-11-21. CONTRIBUTIONS--MEMBERS--LOCAL ADMINISTRATIVE

UNITS.--

A. Each member shall make contributions to the fund in the amount of seven and six-tenths percent of his annual salary.

B. [Until June 30, 1993] Unless adjusted pursuant to Section 22-11-21.4 NMSA 1978, each local administrative unit shall make a yearly contribution to the fund of a sum equal to [seven and six-tenths] sixteen and fifty-nine hundredths percent of the annual salary of each member employed by the local administrative unit.

[C. Beginning July 1, 1993 and thereafter, each local administrative unit shall make a yearly contribution to the fund of a sum equal to eight and sixty-five hundredths percent of the annual salary of each member employed by the local administrative unit.]"

Section 2. A new section of the Educational Retirement Act, Section 22-11-21.4 NMSA 1978, is enacted to read:

"22-11-21.4. [NEW MATERIAL] CALCULATION OF CONTRIBUTION RATE.--No later than December 31, 2003, the board shall calculate the local administrative unit contribution rate actuarially necessary to fund retirement benefits and disability benefits pursuant to the Educational Retirement Act. If the rate calculated differs from the rate specified in Subsection B of Section 22-11-21 NMSA 1978, then, after certification of the calculated rate to the superintendent of public instruction, the local administrative unit contribution rate shall be adjusted to the rate calculated pursuant to this section."

Section 3. Section 22-11-30 NMSA 1978 (being Laws 1967, Chapter 16, Section 153, as amended) is amended to read:

"22-11-30. RETIREMENT BENEFITS.--

A. Retirement benefits for a member retired pursuant to the Educational Retirement Act on or before June 30, 1967 shall be paid monthly and shall be one-twelfth of a sum equal to one and one-half percent of the first four thousand dollars ($4,000) of the member's average annual salary and one percent of the remainder of the member's average annual salary multiplied by the number of years of the member's total service credit.

B. Retirement benefits for a member retired pursuant to the Educational Retirement Act on or after July 1, 1967 but on or before June 30, 1971 shall be paid monthly and shall be one-twelfth of a sum equal to one and one-half percent of the first six thousand six hundred dollars ($6,600) of the member's average annual salary and one percent of the remainder of the member's average annual salary multiplied by the number of years of the member's total service credit.

C. Retirement benefits for a member retired pursuant to the Educational Retirement Act on or after July 1, 1971 but on or before June 30, 1974 shall be paid monthly and shall be one-twelfth of a sum equal to one and one-half percent of the member's average annual salary multiplied by the number of years of the member's total service credit.

D. Retirement benefits for a member retired pursuant to the Educational Retirement Act on or before June 30, 1974 but returning to employment on or after July 1, 1974 for a cumulation of one or more years shall be computed pursuant to Subsection E of this section. Retirement benefits for a member retired pursuant to the Educational Retirement Act on or before June 30, 1974 but returning to employment on or after July 1, 1974 for a cumulation of less than one year shall be computed pursuant to Subsection A of this section if [his] the member's date of last retirement was on or before June 30, 1967 or pursuant to Subsection B of this section if [his] the member's date of last retirement was on or after July 1, 1967 but not later than June 30, 1971 or pursuant to Subsection C of this section if [his] the member's date of last retirement was on or after July 1, 1971 but not later than June 30, 1974.

E. Retirement benefits for a member age sixty or over, retired pursuant to the Educational Retirement Act on or after July 1, 1974 but not later than June 30, 1987 shall be paid monthly and shall be one-twelfth of a sum equal to:

(1) one and one-half percent of the member's average annual salary multiplied by the number of years of service credit for:

(a) prior employment; and

(b) allowed service credit for service performed prior to July 1, 1957, except United States military service credit purchased pursuant to Paragraph (3) of Subsection A of Section 22-11-34 NMSA 1978; plus

(2) two percent of the member's average annual salary multiplied by the number of years of service credit for:

(a) contributory employment;

(b) allowed service credit for service performed after July 1, 1957; and

(c) United States military service credit for service performed prior to July 1, 1957 and purchased pursuant to Paragraph (3) of Subsection A of Section 22-11-34 NMSA 1978.

F. Retirement benefits for a member age sixty or over, retired pursuant to the Educational Retirement Act on or after July 1, 1987 but not later than June 30, 1991 shall be paid monthly and shall be one-twelfth of a sum equal to two and fifteen-hundredths percent of the member's average annual salary multiplied by the number of years of the member's total service credit; provided that this subsection shall not apply to any member who was retired in any of the four quarters ending on June 30, 1987 without having accumulated not less than [1.0 years] one year earned service credit after June 30, 1987.

G. Retirement benefits for a member age sixty or over, retired pursuant to the Educational Retirement Act on or after July 1, 1991 but not later than June 30, 2003 shall be paid monthly and shall be one-twelfth of a sum equal to two and thirty-five hundredths percent of the member's average annual salary multiplied by the number of years of the member's total service credit; provided that this subsection shall not apply to any member who was retired in any of the four consecutive quarters ending on June 30, 1991 without having accumulated at least one year earned service credit beginning on or after July 1, 1991.

H. Retirement benefits for a member age sixty or over, retired pursuant to the Educational Retirement Act on or after July 1, 2003, shall be paid monthly and shall be one- twelfth of a sum equal to three percent of the member's average annual salary multiplied by the number of years of the member's total service credit; provided that:

(1) the retirement benefit shall not exceed eighty percent of the average annual salary; and

(2) this subsection shall not apply to a member who was retired in any of the four consecutive quarters ending on June 30, 2003 without having accumulated at least one year earned service credit beginning on or after July 1, 2003.

[H.] I. Except as provided in Subsection J of this section, a member's average annual salary, pursuant to this section, shall be computed on the basis of the last five years for which contribution was made or upon the basis of any consecutive five years for which contribution was made by the member, whichever is higher. Members shall begin receiving retirement benefits by age seventy and six months, or upon termination of employment, whichever occurs later.

J. The average annual salary of a member who retires pursuant to Subsection H of this section is one thirty-sixth of the greatest aggregate amount of salary paid to a member for thirty-six consecutive but not necessarily continuous months of service credit. If a member has less than thirty-six months of service credit, the average annual salary is the aggregate amount of salary paid a member for the member's period of service credit divided by the member's service credit. Members shall begin receiving retirement benefits by age seventy and six months, or upon termination of employment, whichever occurs later."

Section 4. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2003.