SB0534

SENATE BILL 534

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

INTRODUCED BY

Pete Campos

AN ACT

RELATING TO PUBLIC EMPLOYEE RETIREMENT; AMENDING SECTIONS OF THE PUBLIC EMPLOYEES RETIREMENT ACT; INCLUDING DISTRICT ATTORNEYS IN THE STATE POLICE MEMBER AND ADULT CORRECTIONAL OFFICER MEMBER COVERAGE PLAN 1; MAKING CONFORMING TECHNICAL CHANGES; MAKING AN APPROPRIATION.

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

SECTION 1. Section 10-7C-15 NMSA 1978 (being Laws 1990, Chapter 6, Section 15, as amended by Laws 2009, Chapter 287, Section 2 and by Laws 2009, Chapter 288, Section 3) is amended to read:

"10-7C-15. RETIREE HEALTH CARE FUND CONTRIBUTIONS.--

A. Following completion of the preliminary contribution period, each participating employer shall make contributions to the fund pursuant to the following provisions:

(1) for participating employees who are not members of an enhanced retirement plan, the employer's contribution shall equal:

(a) one and three-tenths percent of each participating employee's salary for the period from July 1, 2002 through June 30, 2010;

(b) one and six hundred sixty-six thousandths percent of each participating employee's salary for the period from July 1, 2010 through June 30, 2011;

(c) one and eight hundred thirty-four thousandths percent of each participating employee's salary for the period from July 1, 2011 through June 30, 2012; and

(d) two percent of each participating employee's salary beginning July 1, 2012;

(2) for participating employees who are members of an enhanced retirement plan, the employer's contribution shall equal:

(a) one and three-tenths percent of each participating employee's salary for the period from July 1, 2002 through June 30, 2010;

(b) two and eighty-four thousandths percent of each participating employee's salary for the period from July 1, 2010 through June 30, 2011;

(c) two and two hundred ninety-two thousandths percent of each participating employee's salary for the period from July 1, 2011 through June 30, 2012; and

(d) two and one-half percent of each participating employee's salary beginning July 1, 2012; and

(3) each employer that chooses to become a participating employer after January 1, 1998 shall make contributions to the fund in the amount determined to be appropriate by the board.

B. Following completion of the preliminary contribution period, each participating employee, as a condition of employment, shall contribute to the fund pursuant to the following provisions:

(1) for a participating employee who is not a member of an enhanced retirement plan, the employee's contribution shall equal:

(a) sixty-five hundredths of one percent of the employee's salary for the period from July 1, 2002 through June 30, 2010;

(b) eight hundred thirty-three thousandths of one percent of the employee's salary for the period from July 1, 2010 through June 30, 2011;

(c) nine hundred seventeen thousandths of one percent of the employee's salary for the period from July 1, 2011 through June 30, 2012; and

(d) one percent of the employee's salary beginning July 1, 2012;

(2) for a participating employee who is a member of an enhanced retirement plan, the employee's contribution shall equal:

(a) sixty-five hundredths of one percent of the employee's salary for the period from July 1, 2002 through June 30, 2010;

(b) one and forty-two thousandths percent of the employee's salary for the period from July 1, 2010 through June 30, 2011;

(c) one and one hundred forty-six thousandths percent of the employee's salary for the period from July 1, 2011 through June 30, 2012; and

(d) one and one-fourth percent of the employee's salary beginning July 1, 2012; and

(3) as a condition of employment, each participating employee of an employer that chooses to become a participating employer after January 1, 1998 shall contribute to the fund an amount that is determined to be appropriate by the board. Each month, participating employers shall deduct the contribution from the participating employee's salary and shall remit it to the board as provided by any procedures that the board may require.

C. On or after July 1, 2009, no person who has obtained service credit pursuant to Subsection B of Section 10-11-6 NMSA 1978, Section 10-11-7 NMSA 1978 or Paragraph (3) or (4) of Subsection A of Section 22-11-34 NMSA 1978 may enroll with the authority unless the person makes a contribution to the fund equal to the full actuarial present value of the amount of the increase in the person's health care benefit, as determined by the authority.

D. Except for contributions made pursuant to Subsection C of this section, a participating employer that fails to remit before the tenth day after the last day of the month all employer and employee deposits required by the Retiree Health Care Act to be remitted by the employer for the month shall pay to the fund, in addition to the deposits, interest on the unpaid amounts at the rate of six percent per year compounded monthly.

E. Except for contributions made pursuant to Subsection C of this section, the employer and employee contributions shall be paid in monthly installments based on the percent of payroll certified by the employer.

F. Except in the case of erroneously made contributions or as may be otherwise provided in Subsection D of Section 10-7C-9 NMSA 1978, contributions from participating employers and participating employees shall become the property of the fund on receipt by the board and shall not be refunded under any circumstances, including termination of employment or termination of the participating employer's operation or participation in the Retiree Health Care Act.

G. Notwithstanding any other provision in the Retiree Health Care Act and at the first session of the legislature following July 1, 2013, the legislature shall review and adjust the distributions pursuant to Section 7-1-6.1 NMSA 1978 and the employer and employee contributions to the authority in order to ensure the actuarial soundness of the benefits provided under the Retiree Health Care Act.

H. As used in this section, "member of an enhanced retirement plan" means:

(1) a member of the public employees retirement association who, pursuant to the Public Employees Retirement Act, is included in:

(a) state police member, [and] adult correctional officer member and district attorney member coverage plan 1;

(b) municipal police member coverage plan 3, 4 or 5;

(d) municipal detention officer member coverage plan 1; or

(2) a member pursuant to the provisions of the Judicial Retirement Act."

SECTION 2. 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 employed as an adult correctional officer or an adult correctional officer specialist by a state correctional facility of the corrections department or its successor agency;

(2) "district attorney member" means a member who is employed full-time as an appointed or elected district attorney by an affiliated public employer;

[(2)] (3) "juvenile correctional officer member" means a member who is employed as a juvenile correctional officer by the children, youth and families department or its successor agency;

[(3)] (4) "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)] (5) "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)] (6) "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)] (7) "state police member" means a member who is an officer of the New Mexico state police and who has taken the oath prescribed for such officers, except that a state police member shall not include a member who is an officer of the New Mexico state police division and who was certified and commissioned as of June 30, 2015 in the former motor transportation division or the former special investigations division of the department of public safety;

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, 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 3. Section 10-11-27 NMSA 1978 (being Laws 1987, Chapter 253, Section 27, as amended) is amended to read:

"10-11-27. STATE POLICE MEMBER, [AND] ADULT CORRECTIONAL OFFICER MEMBER AND DISTRICT ATTORNEY MEMBER COVERAGE PLAN 1--APPLICABILITY--CREDITED SERVICE.--

A. State police member, [and] adult correctional officer member and district attorney member coverage plan 1 is applicable to state police members who are not specifically covered by another coverage plan, [and] to adult correctional officer members and to district attorney members.

B. The credited service of a state police member who was a retired member or a member on June 30, 2013 and who has held the permanent rank of patrolman, sergeant, lieutenant or captain and does not hold an exempt rank or who is assigned to the aircraft division as a pilot, or of an adult correctional officer member, shall have actual credited service increased by twenty percent for the purposes of state police member, [and] adult correctional officer member and district attorney member coverage plan 1.

C. Except as provided in Subsection B of this section, the credited service of a member covered under state police member, [and] adult correctional officer member and district attorney member coverage plan 1 shall be credited as provided in Section 10-11-4 NMSA 1978.

D. State police member, [and] adult correctional officer member and district attorney member coverage plan 1 is applicable to adult correctional officer members in the first full pay period after July 1, 2004 if the retirement board certifies to the secretary of state that, of those adult correctional officer members to be covered under state police member, [and] adult correctional officer member and district attorney member coverage plan 1, a majority of the members voting have voted to approve adoption of that plan at an election conducted pursuant to Laws 2003, Chapter 268, Section 16.

E. State police member, adult correctional officer member and district attorney member coverage plan 1 is applicable to district attorney members on the first day of the

calendar month following certification of the election adopting

state police member, adult correctional officer member and district attorney member coverage plan 1 by an affirmative vote of the majority of district attorney members. The election shall be conducted by the retirement board in fiscal year 2020, and the board shall certify the results. The election procedures shall afford all district attorney members an opportunity to vote. An election adopting state police member, adult correctional officer member and district attorney member coverage plan 1 is irrevocable for the purpose of subsequently adopting a coverage plan that would decrease employer or employee contributions with respect to all current and future district attorney members."

SECTION 4. Section 10-11-27.1 NMSA 1978 (being Laws 2003, Chapter 268, Section 10) is amended to read:

"10-11-27.1. STATE POLICE MEMBER, [AND] ADULT CORRECTIONAL OFFICER MEMBER AND DISTRICT ATTORNEY MEMBER COVERAGE PLAN 1--SERVICE CREDIT REQUIRED.--Notwithstanding the provisions of Section 10-11-27 NMSA 1978, to qualify for payment under state police member, [and] adult correctional officer member and district attorney member coverage plan 1, an adult correctional officer member shall have eighteen months of service credit earned under the state police member, [and] adult correctional officer member and district attorney member coverage plan 1 subsequent to July 1, 2004."

SECTION 5. Section 10-11-28 NMSA 1978 (being Laws 1987, Chapter 253, Section 28, as amended) is amended to read:

"10-11-28. STATE POLICE MEMBER, [AND] ADULT CORRECTIONAL OFFICER MEMBER AND DISTRICT ATTORNEY MEMBER COVERAGE PLAN 1--AGE AND SERVICE REQUIREMENTS FOR NORMAL RETIREMENT.--Under state police member, [and] adult correctional officer member and district attorney member coverage plan 1:

A. for a member who was a retired member or a member on June 30, 2013, the age and service requirements for normal retirement are:

(1) age sixty-five years or older and five or more years of credited service;

(2) age sixty-four years and eight or more years of credited service;

(3) age sixty-three years and eleven or more years of credited service;

(4) age sixty-two years and fourteen or more years of credited service;

(5) age sixty-one years and seventeen or more years of credited service;

(6) age sixty years and twenty or more years of credited service; or

(7) any age and twenty-five or more years of credited service; and

B. for a member who was not a retired member or a member on June 30, 2013, the age and service requirements for normal retirement are:

(1) age sixty years or older and six or more years of service credit; or

(2) any age and twenty-five or more years of service credit."

SECTION 6. Section 10-11-29 NMSA 1978 (being Laws 1987, Chapter 253, Section 29, as amended) is amended to read:

"10-11-29. STATE POLICE MEMBER, [AND] ADULT CORRECTIONAL OFFICER MEMBER AND DISTRICT ATTORNEY MEMBER COVERAGE PLAN 1--AMOUNT OF PENSION--FORM OF PAYMENT A.--Under state police member, [and] adult correctional officer member and district attorney member coverage plan 1, the amount of pension under form of payment A is equal to three percent of final average salary multiplied by credited service. The amount shall not exceed ninety percent of the final average salary."

SECTION 7. Section 10-11-31 NMSA 1978 (being Laws 1987, Chapter 253, Section 31, as amended) is amended to read:

"10-11-31. STATE POLICE MEMBER, [AND] ADULT CORRECTIONAL OFFICER MEMBER AND DISTRICT ATTORNEY MEMBER COVERAGE PLAN 1--MEMBER CONTRIBUTION RATE.--A member under state police member, [and] adult correctional officer member and district attorney member coverage plan 1 shall contribute seven and six-tenths percent of salary, except that a member whose annual salary is greater than twenty thousand dollars ($20,000) shall contribute nine and one-tenth percent of salary."

SECTION 8. Section 10-11-32 NMSA 1978 (being Laws 1987, Chapter 253, Section 32, as amended) is amended to read:

"10-11-32. STATE POLICE MEMBER, [AND] ADULT CORRECTIONAL OFFICER MEMBER AND DISTRICT ATTORNEY MEMBER COVERAGE PLAN 1--STATE CONTRIBUTION RATE--AFFILIATED PUBLIC EMPLOYER CONTRIBUTION RATE.--The state or other affiliated public employer shall contribute twenty-five and one-half percent of the salary of each member under state police member, [and] adult correctional officer member and district attorney member coverage plan 1, except that, from July 1, 2013 through June 30, 2014, the state contribution rate shall be twenty-five and one-tenth percent of the salary of each member."

SECTION 9. APPROPRIATION.--Two million dollars ($2,000,000) is appropriated from the general fund to the public employees retirement association for expenditure in fiscal year 2020 and subsequent fiscal years for accrued liability for district attorney member coverage under state police member, adult correctional officer member and district attorney member coverage plan 1. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert to the general fund; provided that the appropriation shall revert at the end of fiscal year 2020 if a majority of the district attorney members do not elect to adopt state police member, adult correctional officer member and district attorney member coverage plan 1 in fiscal year 2020 as provided in Subsection E of Section 10-11-27 NMSA 1978.

- 18 -