Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports if they are used for other purposes.

 

Current FIRs (in HTML & Adobe PDF formats) are available on the NM Legislative Website (legis.state.nm.us).  Adobe PDF versions include all attachments, whereas HTML versions may not.  Previously issued FIRs and attachments may also be obtained from the LFC in Suite 101 of the State Capitol Building North.

 

 

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

 

 

 

SPONSOR

Gonzales

DATE TYPED

01/27/04

HB

HJM 26

 

SHORT TITLE

Cost-of-Living Benefit for Education Retirees

SB

 

 

 

ANALYST

Gilbert

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY04

FY05

FY04

FY05

 

 

 

Significant

Recurring

General Fund

 

 

 

Significant

Recurring

Educational

Retirement Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

 

SOURCES OF INFORMATION

LFC Files

 

No Response Received From

Educational Retirement Association

 

SUMMARY

 

Synopsis of Bill

 

House Joint Memorial 26 directs the Educational Retirement Association (ERA) to provide a 3% cost-of-living benefit increase to all ERA retirees and that this Memorial be forwarded to the ERA.

 

Significant Issues

 

N.M. Const. Art. XX, Sec. 22 states in part:

 

B.  The retirement board of the public employees retirement system and the board of the educational retirement system shall be the trustees for their respective systems and have the sole and exclusive fiduciary duty and responsibility for administration and investment of the trust fund held by their respective systems. 

 

C.  A retirement board shall have the sole and exclusive power and authority to adopt actuarial assumptions for its system based upon the recommendations made by an independent actuary with whom it contracts.  The legislature shall not enact any law that increases the benefits paid by the system in any manner or changes the funding formula for a retirement plan unless adequate funding is provided.

 

FISCAL IMPLICATIONS

 

An increase in ERA retirement benefits would likely require an increase in contributions.  However, ERA did not provide actuarial funding data relating to the impact of this bill.  If contributions were increased to fund the COLA recommended in bill, existing school employees may be required to pay additional retirement contributions and/or the public schools would need additional appropriations for this benefit increase to be actuarially sound.

 

RLG/sb