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SPONSOR: |
Marquardt |
DATE TYPED: |
|
HB |
966/aHAFC |
||
SHORT TITLE: |
Educational Retirement Service Credit |
SB |
|
||||
|
ANALYST: |
Gilbert |
|||||
APPROPRIATION
Appropriation
Contained |
Estimated
Additional Impact |
Recurring or
Non-Rec |
Fund Affected |
||
FY03 |
FY04 |
FY03 |
FY04 |
|
|
|
|
|
$0.1
See Narrative |
Recurring |
ERB
Fund |
(Parenthesis
( ) Indicate Expenditure Decreases)
LFC Files
New Mexico Department of Labor (DOL)
Educational Retirement Association (ERA)
SUMMARY
Synopsis
of HAFC Amendment
House Appropriations and Finance Committee
amendment to House Bill 966 specifies that purchase of service credit for
military or public health service work is allowed until
Payment for each year of allowed service credit is equal to the actuarial value of the service purchased as defined by the ERB. Payment pursuant to this paragraph may be made in installments, at the discretion of the board, over a period not to exceed one year and, if the sum paid does not equal the amount required for any full year of allowed service credit, the member shall acquire allowed service credit for that period of time that is proportionate to the payment made subject to the federal Uniformed Services Employment and Reemployment Rights Act of 1994.
This amendment appears to make the purchase of service credit for military or public health service work cost-neutral, thus compliant with NM Const., Art. XX, Section 22 (no benefits may be enhanced unless the costs of those benefits are properly funded in accordance with actuarial standards).
This amendment also restricts the purchase of service credit for military, public health service, qualified out-of-state credit, or private school educational credit unless a local administrative unit currently employs the member.
Synopsis
of Original Bill
House Bill 966 amends NMSA 1978, § 22-11-34, to
allow Educational Retirement Association (ERA) members, after four years of
employment with an ERA employer, to purchase up to five years of service credit
for military or public health service.
The employee cost per year of purchased service
credit is 25% of the member’s current salary.
ERA employers are not required to make any contributions for purchases
of the service credit allowed by this bill.
Significant
Issues
Currently, ERA members may purchase allowed
military service credit. However, it must be purchased within three years of
the member’s employment with an ERA employer and the cost is 10 ½ % of member’s
current salary.
FISCAL IMPLICATIONS
This bill does not
contain an appropriation and it may be contrary to NM Const., Art. XX, Section
22 (no benefits may be enhanced unless the costs of those benefits are properly
funded in accordance with actuarial standards). An actuarial study to determine
the cost of the new benefits provided by HB 966 has not been performed.
ERA members with sufficient resources may purchase military or public health service and retire with only 20 years of service.
HB 966 could serve as an incentive for former
Commissioned Corps of the Public Health Service members to accept employment
with ERA employers, thus assisting with the severe nursing shortage in
RLG/ls:njw