SENATE FINANCE COMMITTEE SUBSTITUTE FOR
SENATE BILL 86
51st legislature - STATE OF NEW MEXICO - first session, 2013
AN ACT
RELATING TO PENSIONS; AMENDING THE PUBLIC EMPLOYEES RETIREMENT ACT TO PROVIDE FOR LIMITATIONS IN THE CALCULATION OF A MEMBER'S FINAL AVERAGE SALARY; AMENDING THE EDUCATIONAL RETIREMENT ACT TO PROVIDE A LIMITATION IN THE CALCULATION OF A MEMBER'S AVERAGE ANNUAL SALARY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 10-11-14.6 NMSA 1978 (being Laws 2009, Chapter 288, Section 12) is amended to read:
"10-11-14.6. CALCULATION OF FINAL AVERAGE SALARY--LIMITATIONS.--
A. Under each coverage plan of the Public Employees Retirement Act, [the] a member's final average salary is equal to one thirty-sixth of the greatest aggregate amount of salary paid [a] the member for thirty-six consecutive but not necessarily continuous months of service credit.
B. On and after July 1, 2013, if a member's final average salary as calculated pursuant to Subsection A of this section is an amount greater than sixty thousand dollars ($60,000):
(1) the salary in the first twelve months of the thirty-six-month period used to determine the final average salary shall be adjusted to exclude any increase in salary in excess of twenty percent of the salary paid in the twelve consecutive but not necessarily continuous months of service credit preceding the thirty-six-month period; and
(2) the salary in each of the two succeeding twelve-month intervals of the thirty-six-month period, as adjusted to exclude any increase in salary in the twelve-months preceding each such succeeding twelve-month interval that is in excess of the twenty-percent limitation provided in this subsection, shall be used to determine if the salary paid in that succeeding twelve-month interval exceeds the twenty percent limitation and to adjust the salary to exclude any increase in excess of that limitation in determining the final average salary.
C. On July 1, 2014 and on each July 1 thereafter, the salary threshold for applying the twenty-percent limitation provided for in Subsection B of this section shall be adjusted by applying an adjustment factor equal to the change in the consumer price index between the next preceding calendar year and the preceding calendar year; provided, however, that the amount determined in any year shall not decrease from the amount determined the preceding year if there is a decrease in the consumer price index between the next preceding calendar year and the preceding calendar year."
SECTION 2. Section 22-11-30 NMSA 1978 (being Laws 1967, Chapter 16, Section 153, as amended by Laws 2009, Chapter 286, Section 3 and by Laws 2009, Chapter 288, Section 17) is amended to read:
"22-11-30. RETIREMENT BENEFITS.--
A. Retirement benefits for a member retired pursuant to the Educational Retirement Act on or before June 30, 1967 shall be paid monthly and shall be one-twelfth of a sum equal to one and one-half percent of the first four thousand dollars ($4,000) of the member's average annual salary and one percent of the remainder of the member's average annual salary multiplied by the number of years of the member's total service credit.
B. Retirement benefits for a member retired pursuant to the Educational Retirement Act on or after July 1, 1967 but on or before June 30, 1971 shall be paid monthly and shall be one-twelfth of a sum equal to one and one-half percent of the first six thousand six hundred dollars ($6,600) of the member's average annual salary and one percent of the remainder of the member's average annual salary multiplied by the number of years of the member's total service credit.
C. Retirement benefits for a member retired pursuant to the Educational Retirement Act on or after July 1, 1971 but on or before June 30, 1974 shall be paid monthly and shall be one-twelfth of a sum equal to one and one-half percent of the member's average annual salary multiplied by the number of years of the member's total service credit.
D. Retirement benefits for a member retired pursuant to the Educational Retirement Act on or before June 30, 1974 but returning to employment on or after July 1, 1974 for a cumulation of one or more years shall be computed pursuant to Subsection E of this section. Retirement benefits for a member retired pursuant to the Educational Retirement Act on or before June 30, 1974 but returning to employment on or after July 1, 1974 for a cumulation of less than one year shall be computed pursuant to Subsection A of this section if the member's date of last retirement was on or before June 30, 1967 or pursuant to Subsection B of this section if the member's date of last retirement was on or after July 1, 1967 but not later than June 30, 1971 or pursuant to Subsection C of this section if the member's date of last retirement was on or after July 1, 1971 but not later than June 30, 1974.
E. Retirement benefits for a member age sixty years or [over] older, retired pursuant to the Educational Retirement Act on or after July 1, 1974 but not later than June 30, 1987, shall be paid monthly and shall be one-twelfth of a sum equal to:
(1) one and one-half percent of the member's average annual salary multiplied by the number of years of service credit for:
(a) prior employment; and
(b) allowed service credit for service performed prior to July 1, 1957, except United States military service credit purchased pursuant to Paragraph (3) of Subsection A of Section 22-11-34 NMSA 1978; plus
(2) two percent of the member's average annual salary multiplied by the number of years of service credit for:
(a) contributory employment;
(b) allowed service credit for service performed after July 1, 1957; and
(c) United States military service credit for service performed prior to July 1, 1957 and purchased pursuant to Paragraph (3) of Subsection A of Section 22-11-34 NMSA 1978.
F. Retirement benefits for a member age sixty years or [over] older, retired pursuant to the Educational Retirement Act on or after July 1, 1987 but not later than June 30, 1991, shall be paid monthly and shall be one-twelfth of a sum equal to two and fifteen hundredths percent of the member's average annual salary multiplied by the number of years of the member's total service credit; provided that this subsection shall not apply to any member who was retired in any of the four quarters ending on June 30, 1987 without having accumulated not less than 1.0 years earned service credit after June 30, 1987.
G. Retirement benefits for a member age sixty years or [over] older, retired pursuant to Section 22-11-23 NMSA 1978 on or after July 1, 1991, shall be paid monthly and shall be one-twelfth of a sum equal to two and thirty-five hundredths percent of the member's average annual salary multiplied by the number of years of the member's total service credit; provided that this subsection shall not apply to any member who was retired in any of the four consecutive quarters ending on June 30, 1991 without having accumulated at least one year earned service credit beginning on or after July 1, 1991.
H. Retirement benefits for a member, retired pursuant to Section 22-11-23.1 NMSA 1978, shall be paid monthly and shall be one-twelfth of a sum equal to two and thirty-five hundredths percent of the member's average annual salary multiplied by the number of years of the member's total service credit; provided that the benefit for a member retiring pursuant to Paragraph (3) of Subsection A of Section 22-11-23.1 NMSA 1978 shall be reduced by:
(1) six-tenths of one percent for each one-fourth, or portion thereof, year that retirement occurs prior to the member's sixty-fifth birthday but after the sixtieth birthday; and
(2) one and eight-tenths percent for each one-fourth, or portion thereof, year that retirement occurs prior to the member's sixtieth birthday.
I. A member's average annual salary, pursuant to this section, shall be computed on the basis of the last five years for which contribution was made or upon the basis of any consecutive, but not necessarily continuous, five years for which contribution was made by the member, whichever is higher, provided, however that lump-sum payments made after July 1, 2010 of accrued sick leave or annual leave shall be excluded from the calculation of salary.
J. On and after July 1, 2013, if the member's average annual salary is greater than sixty thousand dollars ($60,000):
(1) the salary in the first twelve months of the five-year period used to determine the average annual salary shall be adjusted to exclude any increase in salary in excess of twenty percent of the salary in the twelve consecutive but not necessarily continuous months of service credit preceding the five-year period; and
(2) the salary in each of the four succeeding twelve-month intervals of the five-year period, as adjusted to exclude any increase in salary in the twelve months preceding each such succeeding twelve-month interval that is in excess of the twenty-percent limitation provided in this subsection, shall be used to determine if the salary in that succeeding twelve-month interval exceeds the twenty-percent limitation and to adjust the salary to exclude any increase in excess of that limitation in determining the average annual salary.
K. On July 1, 2014 and on each July 1 thereafter, the salary threshold for applying the twenty-percent limitation provided for in Subsection J of this section shall be adjusted by applying an adjustment factor equal to the change in the consumer price index between the next preceding calendar year and the preceding calendar year; provided, however, that the amount determined in any year shall not decrease from the amount determined the preceding year if there is a decrease in the consumer price index between the next preceding calendar year and the preceding calendar year.
[J.] L. Unless otherwise required by the provisions of the Internal Revenue Code of 1986, members shall begin receiving retirement benefits by age seventy and six months, or upon termination of employment, whichever occurs later."
SECTION 3. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2013.
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