SENATE BILL

55th legislature - STATE OF NEW MEXICO - second session, 2022

INTRODUCED BY

Mimi Stewart

 

 

 

FOR THE LEGISLATIVE EDUCATION STUDY COMMITTEE

 

AN ACT

RELATING TO EDUCATIONAL RETIREMENT; INCREASING CERTAIN CONTRIBUTIONS TO THE EDUCATIONAL RETIREMENT FUND.

 

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

     SECTION 1. Section 22-11-21 NMSA 1978 (being Laws 1967, Chapter 16, Section 144, as amended) is amended to read:

     "22-11-21. CONTRIBUTIONS--MEMBERS--LOCAL ADMINISTRATIVE UNITS.--

          A. Except as provided in Subsection D of this section, for a member whose annual salary is greater than twenty-four thousand dollars ($24,000), the member shall make contributions to the fund at the rate of ten and seven-tenths percent of the member's annual salary.

          B. For a member whose annual salary is twenty-four thousand dollars ($24,000) or less, the member shall make contributions to the fund at the rate of seven and nine-tenths percent of the member's annual salary.

          C. Except as provided in Subsection D of this section, each local administrative unit shall make an annual contribution to the fund according to the following schedule:

                (1) from July 1, 2021 through June 30, 2022, at the rate of fifteen and fifteen-hundredths percent of the annual salary of each member employed by the local administrative unit; [and]

                (2) from July 1, 2022 through June 30, 2023, at the rate of seventeen and fifteen-hundredths percent of the annual salary of each member employed by the local administrative unit; and

                [(2)] (3) on and after July 1, [2022] 2023, at the rate of [sixteen] eighteen and fifteen-hundredths percent of the annual salary of each member employed by the local administrative unit.

          D. If, in a calendar year, the salary of a member, initially employed by a local administrative unit on or after July 1, 1996, equals the annual compensation limit set pursuant to Section 401(a)(17) of the Internal Revenue Code of 1986, as amended, then:

                (1) for the remainder of that calendar year, no additional member contributions or local administrative unit contributions for that member shall be made pursuant to this section; provided that no member shall be denied service credit solely because contributions are not made by the member or on behalf of the member pursuant to this subsection; and

                (2) the amount of the annual compensation limit shall be divided into four equal portions, and, for purposes of attributing contributory employment and crediting service credit, each portion shall be attributable to one of the four quarters of the calendar year."

     SECTION 2. Section 22-11-49 NMSA 1978 (being Laws 1991, Chapter 118, Section 7, as amended) is amended to read:

     "22-11-49. ALTERNATIVE RETIREMENT PLAN--CONTRIBUTIONS.--

          A. A participant shall contribute an amount equal to the percentage of the participant's salary that the participant would be required to contribute if the participant were, instead, a regular member. The contribution shall be made as provided by the board.

          B. A qualifying state educational institution shall contribute on behalf of each participant an amount of the participant's salary equal to the contribution that would be required of the employer if the participant were, instead, a regular member. Of that contribution, a sum equal to the following percentage of the annual salary of each participant shall be paid to the fund, and the remainder of the contribution shall be paid to the alternative retirement plan as provided by the board:

                (1) from July 1, 2021 through June 30, 2022, four and one-fourth percent; [and]

                (2) from July 1, 2022 through June 30, 2023, six and one-fourth percent; and

                [(2)] (3) on and after July 1, [2022, five] 2023, seven and one-fourth percent; or

                [(3)] (4) if, on July 1 following any report by the actuary to the board that concludes that less than that percentage is required to satisfy the unfunded actuarial liability attributable to the participation of the participants in the alternative retirement plan, then the percentage the actuary determines is the minimum required to satisfy that liability.

          C. Contributions required by this section may be made by a reduction in salary or by a public employer pick-up as provided in the Internal Revenue Code of 1986, as amended."

- 4 -