HOUSE BILL 531
46th legislature - STATE OF NEW MEXICO - second session, 2004
INTRODUCED BY
Pauline J. Ponce
AN ACT
RELATING TO EDUCATIONAL RETIREMENT; ALLOWING MEMBERS RETIRED FROM A LOCAL ADMINISTRATIVE UNIT TO BEGIN EMPLOYMENT AT THE PUBLIC EDUCATION DEPARTMENT WITHOUT SUSPENDING RETIREMENT BENEFITS; ALLOWING MEMBERS WHO ARE STATE AGENCY EMPLOYEES TO ELECT TO QUALIFY FOR COVERAGE UNDER THE PUBLIC EMPLOYEES 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 an employee, except for a participant or a retired member, coming within the provisions of the Educational Retirement Act;
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] licensed school employee of a state institution or agency providing an educational program [and holding a standard or substandard certificate issued by the state board] or a licensed school employee who is regularly employed by the public education department or the board, except for a participant and except for licensed school employees of the public education department, the board, the department of health, the corrections department and the children, youth and families department after July 1, 2004;
[(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)] (5) a member classified as a regular member in accordance with the rules of the board;
[(7)] (6) a [person] licensed school employee 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)] (7) a [person] licensed school employee 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. "Salary" includes payments made for annual or sick leave and payments for additional service provided to related activities, but does not include payments for sick leave not taken unless the payment for the unused sick leave is made through continuation of the member on the regular payroll for the period represented by that payment and does not include allowances or reimbursements for travel, housing, food, equipment or similar items;
Y. "alternative retirement plan" means the retirement plan provided for in Sections 22-11-47 through 22-11-52 NMSA 1978; and
Z. "retired member" means a person whose employment has been terminated by reason of age and who is receiving or is eligible to receive retirement benefits."
Section 2. Section 22-11-17 NMSA 1978 (being Laws 1967, Chapter 16, Section 141, as amended) is amended to read:
"22-11-17. PROVISIONAL MEMBERSHIP.--
A. A provisional member shall be covered by the provisions of the Educational Retirement Act but shall have the option to exempt himself from its coverage. A provisional member exempting himself from the provisions of the Educational Retirement Act shall not be entitled to the benefits or coverage under any other state retirement program except as otherwise provided in this section. This section shall not affect any rights a provisional member may have under the provisions of the federal Social Security Act. This option to exempt must be exercised within one year of employment according to the [regulations] rules adopted by the board. [Any] A provisional member exempting himself pursuant to this section shall be entitled to a refund of any contributions made pursuant to the Educational Retirement Act prior to the exercise of the exemption.
B. A provisional member not exempt from the coverage of the Educational Retirement Act shall have the right to earned service-credit for periods of employment subsequent to July 1, 1957 and prior to July 1, 1961, provided that all contributions at the rates in effect during that period of employment are paid. If a provisional member chooses to make the contributions for that period, the local administrative unit employing a member during that period shall pay the employer's contribution at the rate in effect during that period of employment. Contributions prior to July 1, 1961 by both the provisional member and the local administrative unit shall bear interest at the rate of three percent a year from July 1, 1961 until paid.
C. A provisional member exempt from the coverage of the provisions of the Educational Retirement Act shall have the right to revoke the exemption at any time; however, within the first two weeks following the beginning of each school year, such provisional member shall be informed by the local administrative unit in writing of his right to revoke the exemption and shall sign a statement to the effect that he does or does not wish to revoke the exemption. A copy of such statement shall be kept in the personnel file of the provisional member.
D. A provisional member who revokes the exemption from coverage may, at any time before June 30, 2006, acquire earned service credit for periods of employment during which the exemption or exemptions were in force if both the member contributions and the local administrative unit contributions, at the rates in effect during the periods of employment and applied to the earnings of the member during those periods, are paid to the fund, together with interest at the actuarial rate set by the board. The contributions shall be paid in the following manner:
(1) both the member contributions and the local administrative unit contributions, together with interest, shall be paid by the member; or
(2) if the member tenders payment of the member contributions, with interest, the local administrative unit by whom the member was employed may, but shall not be obligated to, pay the local administrative unit contributions, with interest.
E. A provisional member employed by the board, the department [of education], the New Mexico school for the deaf, the northern New Mexico state school, the New Mexico school for the visually handicapped, the New Mexico girls' school, the New Mexico boys' school or the Los Lunas medical center shall have the option of qualifying for coverage under either the Educational Retirement Act or the Public Employees Retirement [association of New Mexico] Act. This option shall be exercised by filing a written election with both the educational retirement director and the executive secretary of the public employees retirement association [of New Mexico]. This election shall be made within six months after employment and shall be irrevocable regardless of subsequent employment or reemployment in any administrative unit enumerated in this subsection. Until this election is made, the provisional member shall be covered and shall be required to make contributions under the Educational Retirement Act.
F. A member who is employed by the public education department, the board, the corrections department, the department of health or the children, youth and families department and who is currently a member may make a one-time election to join the public employees' retirement association prospectively, as long as such election is made before September 30, 2004. The member's contributions to the educational retirement board shall remain in the fund and be subject to the provisions of the Educational Retirement Act and to the Reciprocity Act."
Section 3. Section 22-11-25.1 NMSA 1978 (being Laws 2001, Chapter 283, Section 2, as amended by Laws 2003, Chapter 80, Section 1 and by Laws 2003, Chapter 145, Section 1) is amended to read:
"22-11-25.1. RETURN TO EMPLOYMENT--BENEFITS CONTINUED--ADMINISTRATIVE UNIT CONTRIBUTIONS.--
A. Except as provided in Subsections B and [E] F of this section, beginning January 1, 2002 and continuing until January 1, 2012, a retired member may begin employment at a local administrative unit and shall not be required to suspend retirement benefits if the member has not been employed as an employee or independent contractor by a local administrative unit for at least twelve consecutive months from the date of retirement to the commencement of employment or reemployment with a local administrative unit. If the retired member returns to employment without first completing twelve consecutive months of retirement, the retired member shall remove himself from retirement.
B. A retired member who was retired on or before January 1, 2001, has not since suspended or been required to suspend retirement benefits pursuant to the Educational Retirement Act and is reemployed by a local administrative unit may continue employment at the local administrative unit and shall not be required to suspend retirement benefits.
C. Beginning July 1, 2004, a retired member who retired from a local administrative unit other than the department may begin employment at the department without suspending retirement benefits.
[C.] D. A retired member who returns to employment during retirement pursuant to Subsection A [or], B or C of this section is entitled to continue to receive retirement benefits but is not entitled to acquire service credit or to acquire or purchase service credit in the future for the period of the retired member's reemployment with a local administrative unit.
[D.] E. A retired member who returns to employment pursuant to [Subsections A or] Subsection A, B or C of this section shall not make contributions to the fund as specified in the Educational Retirement Act; however, the local administrative unit's contributions as specified in that act shall be paid to the fund as if the retired member was a non-retired employee.
[E.] F. Beginning July 1, 2003 and continuing until January 1, 2012, a retired member who retired on or before January 1, 2001 and who has not been employed as an employee or independent contractor by a local administrative unit for at least ninety days may begin employment at a local administrative unit without suspending retirement benefits if the retired member was not employed by a local administrative unit for an additional twelve or more consecutive months after the initial date of the retirement; provided that the ninety- day period shall not include any part of a summer or other scheduled break or vacation period."
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