NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature. The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.
The LFC is only preparing FIRs on bills referred to the Senate Finance Committee, the Senate Ways and Means Committee, the House Appropriations and Finance Committee and the House Taxation and Revenue Committee. The chief clerks are responsible for preparing and issuing all other bill analyses.
Only the most recent FIR version, excluding attachments, is available on the Intranet. Previously issued FIRs and attachments may be obtained from the LFC office in Room 416 of the State Capitol Building.
| SPONSOR: | Wright | DATE TYPED: | 02/10/99 | HB | 147 | ||
| SHORT TITLE: | Volunteer Firefighter Age Limitation | SB | |||||
| ANALYST: | Eaton | ||||||
| Recurring
or Non-Rec |
Fund
Affected | ||||
| FY99 | FY2000 | FY99 | FY2000 | ||
| $ 3,400.0 | Recurring | General Fund | |||
| Indeterminate | Recurring | Fire Protection | |||
(Parenthesis ( ) Indicate Expenditure Decreases)
SOURCES OF INFORMATION
Public Employees Retirement Association of New Mexico (PERA)
SUMMARY
Synopsis of Bill:
This bill would expand eligibility for benefits for firefighters by eliminating the age limit set for volunteer firefighters. Current law excludes membership from PERA for those firefighters whose first year of service was after they reached the age of forty-five.
Significant Issues:
Funding for member benefits is derived exclusively from the Fire Protection Fund, as volunteer firefighters are not salaried employees of the state. As this bill would increase the number of members/ beneficiaries, so will the funding needs of the Fire Protection Fund.
New Mexico Constitution Article XX, Section 22 prohibits increasing retirement benefits unless they are properly funded on an actuarial sound basis (GASB 25 compliant). It is the opinion of PERA counsel and this analyst that the passage of this bill without properly funding the retirement account may be unconstitutional.
The volunteer firefighter retirement fund currently needs $3.4 million in additional funding in order to become compliant with governmental accounting standard GASB 25. This standard states that the minimum funding period is forty years for fiscal years through 2006 and thirty years thereafter.
FISCAL IMPLICATIONS
There are over 10,000 volunteer firefighters in New Mexico. PERA does not presently have information regarding the number of persons who would be added to the program if this legislation is enacted.
PERA estimates that currently $3.4 million (recurring) will be required to get the Retirement Fund into compliance. State funding in excess of this amount will be required under authority of the New Mexico Constitution if this legislation is to be enacted.
ADMINISTRATIVE IMPLICATIONS
The administrative impact would be increased volume of service as provisional members take advantage of this opportunity.
JE/gm