2005 Senate Bill text for SB0875

AN ACT

RELATING TO PUBLIC EMPLOYEE RETIREMENT; AMENDING CERTAIN SECTIONS OF THE PUBLIC EMPLOYEE RETIREMENT ACT AND THE EDUCATIONAL RETIREMENT ACT CONCERNING RETIREES WHO RETURN TO WORK; IMPLEMENTING THE HIGHEST THREE-YEAR AVERAGE METHOD FOR CALCULATING THE PENSION PAYABLE PURSUANT TO STATE LEGISLATOR COVERAGE PLAN 2; RECONCILING CONFLICTING AMENDMENTS TO CERTAIN SECTIONS OF THE NMSA 1978.

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

Section 1. Section 10-11-8 NMSA 1978 (being Laws 1987, Chapter 253, Section 8, as amended by Laws 2004, Chapter 2, Section 1 and by Laws 2004, Chapter 68, Section 4) is amended to read:

"10-11-8. NORMAL RETIREMENT--RETURN TO EMPLOYMENT--BENEFITS CONTINUED--EMPLOYER CONTRIBUTIONS.--

A. A member may retire upon fulfilling the following requirements prior to the selected date of retirement:

(1) a written application for normal retirement, in the form prescribed by the association, is filed with the association;

(2) employment is terminated with all employers covered by any state system or the educational retirement system;

(3) the member selects an effective date of retirement that is the first day of a calendar month; and

(4) the member meets the age and service credit requirement for normal retirement specified in the coverage plan applicable to the member.

B. The amount of normal retirement pension is determined in accordance with the coverage plan applicable to the member.

C. Except as provided in Subsection D or E of this section, a retired member may be subsequently employed by an affiliated public employer if the following conditions apply:

(1) the member has not been employed as an employee or independent contractor of an affiliated public employer for at least twelve consecutive months from the date of retirement to the commencement of employment or reemployment with an affiliated public employer; except that a member who has not been employed as an employee or independent contractor of an affiliated public employer for only ninety consecutive days may return to employment if the member is receiving the maximum pension under the member's applicable coverage plan and returns to employment as a peace officer or water or wastewater facility operator. If the retired member returns to employment without first completing twelve consecutive months of retirement, or ninety days of retirement for a retired member who is receiving the maximum pension under the member's applicable coverage plan and returns to employment as a peace officer or water or wastewater facility operator:

(a) the retired member's pension shall be suspended immediately and the previously retired member shall become a member; and

(b) upon termination of the subsequent employment, the previously retired member's pension shall be calculated pursuant to Paragraph (2) of Subsection E of this section;

(2) effective the first day of the month following the month in which the retired member's earnings total thirty thousand dollars ($30,000) during a calendar year, a retired member who returns to employment shall be required to make contributions to the fund as specified in the Public Employees Retirement Act;

(3) until the subsequent employment is terminated, the affiliated public employer that employs the retired member shall make contributions to the fund in the amount specified in the Public Employees Retirement Act or in a higher amount adjusted for full actuarial cost as determined annually by the association; and

(4) a retired member who returns to employment during retirement pursuant to this subsection is entitled 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 an affiliated public employer.

D. The provisions of Paragraphs (2) and (3) of Subsection C of this section that require employee or employer contributions do not apply to:

(1) a retired member who is appointed chief of police of an affiliated public employer, other than the affiliated public employer from which the retired member retired, or who is appointed undersheriff; provided that:

(a) the retired member files an irrevocable exemption from membership with the association within thirty days of appointment;

(b) each sheriff's office shall be limited to one undersheriff qualifying pursuant to this paragraph;

(d) filing an irrevocable exemption shall irrevocably bar the retired member from acquiring service credit for the period of exemption from membership; or

(2) a retired member employed by the legislature for legislative session work.

E. At any time during a retired member's subsequent employment pursuant to Subsection C of this section, the retired member may elect to suspend the pension. When the pension is suspended, the following conditions shall apply:

(1) the retired member who is subsequently employed by an affiliated public employer shall become a member. The previously retired member and the subsequent affiliated public employer shall make the required employee and employer contributions, and the previously retired member shall accrue service credit for the period of subsequent employment; and

(2) when a previously retired member terminates the subsequent employment with an affiliated public employer, the previously retired member shall retire according to the provisions of the Public Employees Retirement Act, subject to the following conditions:

(a) payment of the pension shall resume in accordance with the provisions of Subsection A of this section;

(b) unless the previously retired member accrued at least three years of service credit on account of the subsequent employment, the recalculation of pension shall: 1) employ the form of payment selected by the previously retired member at the time of the first retirement; and 2) use the provisions of the coverage plan applicable to the member on the date of the first retirement; and

F. The pension of a member who has three or more years of service credit under each of two or more coverage plans shall be determined in accordance with the coverage plan that produces the highest pension. The pension of a member who has service credit under two or more coverage plans but who has three or more years of service credit under only one of those coverage plans shall be determined in accordance with the coverage plan in which the member has three or more years of service credit. If the service credit is acquired under two different coverage plans applied to the same affiliated public employer as a consequence of an election by the members, adoption by the affiliated public employer or a change in the law that results in the application of a coverage plan with a greater pension, the greater pension shall be paid a member retiring from the affiliated public employer under which the change in coverage plan took place regardless of the amount of service credit under the coverage plan producing the greater pension; provided the member has three or more years of continuous employment with that affiliated public employer immediately preceding or immediately preceding and immediately following the date the coverage plan changed. The provisions of each coverage plan for the purpose of this subsection shall be those in effect at the time the member ceased to be covered by the coverage plan. "Service credit", for the purposes of this subsection, shall be only personal service rendered an affiliated public employer and credited to the member under the provisions of Subsection A of Section 10-11-4 NMSA 1978. Service credited under any other provision of the Public Employees Retirement Act shall not be used to satisfy the three-year service credit requirement of this subsection."

Section 2. Section 10-11-43.3 NMSA 1978 (being Laws 2003, Chapter 85, Section 9) is amended to read:

"10-11-43.3. STATE LEGISLATOR MEMBER COVERAGE PLAN 2--AMOUNT OF PENSION--FORM OF PAYMENT A.--Under state legislator member coverage plan 2, the annual amount of pension under form of payment A is equal in any calendar year to eleven percent of the average of the three highest per diem rates in effect, pursuant to Section 2-1-8 NMSA 1978, as determined on July 1 of each year of service of the legislator or lieutenant governor, multiplied by sixty and further multiplied by credited service as a legislator or lieutenant governor. A pension paid under state legislator member coverage plan 2 shall be adjusted pursuant to Section 10-11-118 NMSA 1978 for a legislator or lieutenant governor who has been retired for at least two full calendar years from the effective date of the latest retirement prior to July 1 of the year in which the pension is being adjusted."

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, E and 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 prior to July 1, 2005 may continue employment at the local administrative unit and shall not be required to suspend retirement benefits.

C. A retired member who returns to employment during retirement pursuant to Subsection A, B or E 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. For a retired member who returns to employment pursuant to Subsection A, B or E of this section, effective the first day of the month following the month in which the retired member's earnings total thirty thousand dollars ($30,000) during a calendar year, the retired member shall 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 at all times to the fund as if the retired member was a non-retired employee.

E. Except as provided in Subsection F of this section, 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.

F. On and after July 1, 2005, no retired member shall begin employment pursuant to this section without suspending retirement benefits unless the retired member is employed as a teacher in a public school or an instructor in a public post-secondary educational institution."

Section 4. TEMPORARY PROVISION--APPLICABILITY.--The adjustment in the pension for state legislator member coverage plan 2 provided in Section 2 of this act is applicable to state legislator members who retire on or after July 1, 2005.

Section 5. APPLICABILITY.--The provisions of Section 1 of this act that require twelve consecutive months of retirement before returning to work apply to retired members who return to work on or after July 1, 2005.

Section 6. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2005.