NOTE: As provided in LFC policy, this report is
intended only for use by the standing finance committees of the
legislature. The Legislative Finance Committee does not assume
responsibility for the accuracy of the information in this report when used for
other purposes.
The most recent FIR
version (in HTML & Adobe PDF formats) is available on the Legislative
Website. The Adobe PDF version includes
all attachments, whereas the HTML version does not. Previously issued FIRs and attachments may be
obtained from the LFC in
|
SPONSOR: |
HAFC |
DATE TYPED: |
|
HB |
408,660,730/HAFCS |
||
|
SHORT TITLE: |
Benefits for Retired Volunteer Firefighters |
SB |
|
||||
|
|
ANALYST: |
Gilbert |
|||||
APPROPRIATION
|
Appropriation
Contained |
Estimated
Additional Impact |
Recurring or
Non-Rec |
Fund Affected |
||
|
FY03 |
FY04 |
FY03 |
FY04 |
|
|
|
|
|
|
$0.1
See Narrative |
Recurring |
General
Fund |
(Parenthesis
( ) Indicate Expenditure Decreases)
REVENUE
|
Estimated Revenue |
Subsequent Years Impact |
Recurring or
Non-Rec |
Fund Affected |
|
|
FY03 |
FY04 |
|
|
|
|
|
$(0.1)
See Narrative |
$(0.1)
See Narrative |
Recurring |
General
Fund |
LFC Files
Response
Received From
Public
Employees Retirement Association (PERA)
SUMMARY
Synopsis
of Bill
House Bill 408,660,730/HAFCS
expands the number of persons who would be eligible to receive benefits under
the Volunteer Firefighters Retirement Act. Volunteer firefighters, who have retired
and are receiving pension benefits from another state system, would be eligible
under HB 408,660,730/HAFCS to participate
in the volunteer firefighters plan.
Current law excludes from membership those volunteers who are already
retired or receiving a pension benefit from another state retirement system, other
than the state police pension fund.
Currently, the first year of volunteer
firefighter service credit must be attained before the age of forty-five. HB 408,660,730/HAFCS
removes this maximum age restriction.
Currently, there are
approximately 13,000 volunteer firefighters in
According to the Public Employees
Retirement Association (PERA), the proponents of this bill have not
provided any demographic information that would allow PERA’s actuaries to
evaluate quantitatively the extent of the negative actuarial impact this
proposal may have on the volunteer firefighter retirement fund. NM Const. Art. XX, Section 22 prohibits
increased benefits unless the benefits are properly funded on an actuarially
sound basis. The proposed bill does not
include funding for these benefits, and there has been no actuarial study to
determine how much the Legislature would need to appropriate in order to expand
the volunteer firefighter benefits program as proposed in HB 408,660,730/HAFCS. Adding new liabilities to the fund would require
an even greater annual contribution to the fund in order to keep it actuarially
sound.
The Volunteer
Firefighters Retirement Plan, passed by the Legislature in 1983, is unlike any
other PERA coverage plan in that it is not funded based upon contributions from
salary. Volunteer firefighters are not
salaried employees and their “retirement benefits” do not derive from
employment. Rather, the benefits are
provided by the Legislature and funded by the Legislature from the Fire
Protection Fund which, in turn, impacts the general fund. The source of funding to meet the fund’s
statutory obligations is an annual appropriation of $750.0. This amount is supplemented, as required, to
meet unfunded obligations.
Since balances in the
fire protection fund revert each fiscal year to the general fund, this bill
will reduce general fund revenue by the amount required to make these new
volunteer firefighter benefits actuarially sound.
PERA would be required
to amend its regulations to address the statutory changes to the PERA Act and
would incur increased printing costs associated with reprinting pertinent
information about the Volunteer Firefighters Retirement Plan.
Additionally, PERA
states that expanding this program would have an administrative impact on
PERA. PERA is unable to assess the
extent of the impact, because it does not presently have information regarding
the number of persons who would be added to the program as the result of this
legislation. The legislation, if
enacted, would require changes to PERA’s computerized retirement information
systems.
OTHER SUBSTANTIVE ISSUES
According to PERA, this bill raises several policy issues
for the legislature. Historically, the
Legislature has been adverse to “double dipping” from two public pension
systems. For example, retirees from the
Education Retirement Act system are exempt from membership in PERA. NMSA 1978, §
RLG/yr/njw