SENATE BILL 380
50th legislature - STATE OF NEW MEXICO - first session, 2011
INTRODUCED BY
Clinton D. Harden
AN ACT
RELATING TO PUBLIC EMPLOYEES; INCLUDING SPECIAL HOSPITAL DISTRICTS AS PUBLIC EMPLOYERS PURSUANT TO THE PUBLIC EMPLOYEES RETIREMENT ACT; PROVIDING THAT THE PURCHASE COST OF SERVICE CREDIT SHALL BE AT THE ACTUAL ACTUARIAL VALUE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 10-11-2 NMSA 1978 (being Laws 1987, Chapter 253, Section 2, as amended) is amended to read:
"10-11-2. DEFINITIONS.--As used in the Public Employees Retirement Act:
A. "accumulated member contributions" means the amounts deducted from the salary of a member and credited to the member's individual account, together with interest, if any, credited to that account;
B. "affiliated public employer" means the state and any public employer affiliated with the association as provided in the Public Employees Retirement Act, but does not include an employer pursuant to the Magistrate Retirement Act, the Judicial Retirement Act or the Educational Retirement Act;
C. "association" means the public employees retirement association established under the Public Employees Retirement Act;
D. "disability retired member" means a retired member who is receiving a pension pursuant to the disability retirement provisions of the Public Employees Retirement Act;
E. "disability retirement pension" means the pension paid pursuant to the disability retirement provisions of the Public Employees Retirement Act;
F. "educational retirement system" means that retirement system provided for in the Educational Retirement Act;
G. "employee" means any employee of an affiliated public employer;
H. "federal social security program" means that program or those programs created and administered pursuant to the act of congress approved August 14, 1935, Chapter 531, 49 Stat. 620, as that act may be amended;
I. "final average salary" means the final average salary calculated in accordance with the provisions of the applicable coverage plan;
J. "form of payment" means the applicable form of payment of a pension provided for in Section 10-11-117 NMSA 1978;
K. "former member" means a person who was previously employed by an affiliated public employer, who has terminated that employment and who has received a refund of member contributions;
L. "fund" means the funds included under the Public Employees Retirement Act;
M. "member" means a currently employed, contributing employee of an affiliated public employer, or a person who has been but is not currently employed by an affiliated public employer, who has not retired and who has not received a refund of member contributions; "member" also includes the following:
(1) "adult correctional officer member" means a member who is an adult correctional officer or an adult correctional officer specialist employed by a correctional facility of the corrections department or its successor agency;
(2) "hazardous duty member" means a member who is a juvenile correctional officer employed by the children, youth and families department or its successor agency;
(3) "municipal detention officer member" means a member who is employed by an affiliated public employer other than the state and who has inmate custodial responsibilities at a facility used for the confinement of persons charged with or convicted of a violation of a law or ordinance;
(4) "municipal fire member" means any member who is employed as a full-time nonvolunteer firefighter by an affiliated public employer and who has taken the oath prescribed for firefighters;
(5) "municipal police member" means any member who is employed as a police officer by an affiliated public employer, other than the state, and who has taken the oath prescribed for police officers; and
(6) "state police member" means any member who is an officer of the New Mexico state police and who has taken the oath prescribed for such officers;
N. "membership" means membership in the association;
O. "pension" means a series of monthly payments to a retired member or survivor beneficiary as provided in the Public Employees Retirement Act;
P. "public employer" means the state, any municipality, city, county, metropolitan arroyo flood control authority, economic development district, special hospital district, regional housing authority, soil and water conservation district, entity created pursuant to a joint powers agreement, council of government, conservancy district, irrigation district, water and sanitation district, water district and metropolitan water board, including the boards, departments, bureaus and agencies of a public employer, so long as these entities fall within the meaning of governmental plan as that term is used in Section 414(d) of the Internal Revenue Code of 1986, as amended;
Q. "refund beneficiary" means a person designated by the member, in writing, in the form prescribed by the association, as the person who would be refunded the member's accumulated member contributions payable if the member dies and no survivor pension is payable or who would receive the difference between pension paid and accumulated member contributions if the retired member dies before receiving in pension payments the amount of the accumulated member contributions;
R. "retire" means to:
(1) terminate employment with all employers covered by any state system or the educational retirement system; and
(2) receive a pension from a state system or the educational retirement system;
S. "retired member" means a person who has met all requirements for retirement and who is receiving a pension from the fund;
T. "retirement board" means the retirement board provided for in the Public Employees Retirement Act;
U. "salary" means the base salary or wages paid a member, including longevity pay, for personal services rendered an affiliated public employer. "Salary" shall not include overtime pay, allowances for housing, clothing, equipment or travel, payments for unused sick leave, unless the unused sick leave payment is made through continuation of the member on the regular payroll for the period represented by that payment, and any other form of remuneration not specifically designated by law as included in salary for Public Employees Retirement Act purposes. Salary in excess of the limitations set forth in Section 401(a) (17) of the Internal Revenue Code of 1986, as amended, shall be disregarded. The limitation on compensation for eligible employees shall not be less than the amount that was allowed to be taken into account under the state retirement system acts in effect on July 1, 1993. For purposes of this subsection, "eligible employee" means an individual who was a member of a state system before the first plan year beginning after December 31, 1995;
V. "state system" means the retirement programs provided for in the Public Employees Retirement Act, the Magistrate Retirement Act and the Judicial Retirement Act;
W. "state retirement system acts" means collectively the Public Employees Retirement Act, the Magistrate Retirement Act, the Judicial Retirement Act and the Volunteer Firefighters Retirement Act; and
X. "survivor beneficiary" means a person who receives a pension or who has been designated to be paid a pension as a result of the death of a member or retired member."
SECTION 2. Section 10-11-4 NMSA 1978 (being Laws 1987, Chapter 253, Section 4, as amended) is amended to read:
"10-11-4. SERVICE CREDIT--REQUIREMENTS FOR--FORFEITURE-- REINSTATEMENT.--
A. Personal service rendered an affiliated public employer by a member shall be credited to the member's service credit account in accordance with retirement board rules and regulations. Service shall be credited to the nearest month. In no case shall any member be credited with a year of service for less than twelve months of service in any calendar year or more than a month of service for all service in any calendar month or more than a year of service for all service in any calendar year. In no case shall any member be allowed to purchase service credit unless the purchase is authorized in the Public Employees Retirement Act.
B. Personal service rendered an affiliated public employer prior to August 1, 1947 shall be credited to a member if the member acquires one year of service credit for personal service rendered an affiliated public employer.
C. Personal service rendered an affiliated public employer after July 31, 1947 but prior to the date the public employer became an affiliated public employer is prior service and shall be credited to a member if:
(1) the member acquires five years of service credit for personal service rendered an affiliated public employer; and
(2) the member pays the association the amount determined in accordance with Subsection D of this section.
D. The purchase cost for each month of service credit purchased under the provisions of this section is equal to the [member's final average salary multiplied by the sum of the member contribution rate and employer contribution rate determined in accordance with the coverage plan applicable to the member at the time of the written election to purchase] full actuarial present value of the amount of the increase in the employee's pension as a consequence of the purchase as determined by the association. Full payment shall be made in a single lump-sum amount in accordance with the procedures established by the retirement board. The portion of the purchase cost [derived from] allocated by the board to the employer contribution rate shall be credited to the [employer] employer's accumulation fund and shall not be refunded to the member in the event of cessation of membership. In no case shall any member be credited with a month of service for less than the purchase cost as defined in this section.
E. Service credit shall be forfeited if a member terminates employment with an affiliated public employer and withdraws the member's accumulated member contributions.
F. A member or former member who is a member of another state system or the educational retirement system and who has forfeited service credit by withdrawal of member contributions may reinstate the forfeited service credit by repaying the amount withdrawn plus compound interest from the date of withdrawal to the date of repayment at the rate set by the retirement board. Withdrawn member contributions may be repaid in increments of one year in accordance with the procedures established by the retirement board. Full payment of each one-year increment shall be made in a single lump-sum amount in accordance with procedures established by the retirement board."
SECTION 3. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2011.
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