SENATE BILL 400

54th legislature - STATE OF NEW MEXICO - first session, 2019

INTRODUCED BY

George K. Munoz

AN ACT

RELATING TO PUBLIC PENSION SOLVENCY; AUTHORIZING THE PUBLIC EMPLOYEES RETIREMENT BOARD TO MODIFY CERTAIN FUTURE PENSION BENEFITS AND TO INCREASE CONTRIBUTION RATES TO ENHANCE OR PRESERVE THE PUBLIC EMPLOYEES RETIREMENT SYSTEM'S ACTUARIAL SOUNDNESS; DECLARING AN EMERGENCY.

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

     SECTION 1. A new section of the Public Employees Retirement Act is enacted to read:

     "[NEW MATERIAL] RETIREMENT BOARD AUTHORITY--MODIFICATION OF FUTURE PENSION BENEFITS AND CONTRIBUTION RATES TO ENHANCE OR IMPROVE ACTUARIAL SOUNDNESS.--

          A. On or before May 1 of each year, the retirement board shall certify to the association the following actuarial valuation information as it applies to June 30 of the preceding calendar year and as it is projected by the association's actuary to apply to June 30 of the current calendar year:

                (1) the funded ratio of the Public Employees Retirement Act plan;

                (2) the amortization period of the Public Employees Retirement Act plan;

                (3) the funded ratio of each coverage plan of the Public Employees Retirement Act plan; and

                (4) the amortization period of each coverage plan of the Public Employees Retirement Act plan.

          B. If the retirement board certifies in accordance with Subsection A of this section that:

                (1) the amortization period of the Public Employees Retirement Act plan for the preceding calendar year is more than twenty-five years, then the retirement board shall, for the fiscal year beginning in that year, reduce pension benefits for future service credit earned by members, including changes to pension multipliers, or change retirement eligibility requirements established by the Public Employees Retirement Act;

                (2) the amortization period of a coverage plan of the Public Employees Retirement Act plan for the preceding calendar year is more than twenty-five years, then the retirement board shall, for the fiscal year beginning in that year, increase the contribution rates applicable to members of the coverage plan and their employers, but only if:

                     (a) the amount of the increase is no more than one-half percent for members and one-half percent for employers; and

                     (b) such an increase is not in effect during the two fiscal years before the fiscal year of the increase; and

                (3) if the funded ratio for a coverage plan of the Public Employees Retirement Act plan for the preceding fiscal year is one hundred percent or more and the projected funded ratio for that coverage plan for the current fiscal year is one hundred percent or more, then the retirement board may, for the fiscal year beginning in that year, decrease the contribution rates applicable to members of the coverage plan and their employers, but only if:

                     (a) the amount of the decrease is no more than one-half percent for members and one-half percent for employers; and

                     (b) such a decrease is not in effect during the two fiscal years before the fiscal year of the decrease."

     SECTION 2. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.

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