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APPROPRIATION

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

Public Employees Retirement Association of New Mexico (PERA)

SUMMARY

Synopsis of Bill

This bill would freeze a spouse's property interest in a PERA members' retirement at the time of dissolution of marriage. Thus the amount of property interest will not increase or decrease after the date of issuance of the decree of dissolution of marriage.

FISCAL IMPLICATIONS

None.

ADMINISTRATIVE IMPLICATIONS

None.

TECHNICAL ISSUES

As written, this bill effectively amends Section 40-4-7(G), Section 10-11-136, and Section 10-11-118(B) and (C) NMSA 1978. Because of these changes, the bill may be unconstitutional, as it restricts the rights of the court to amend an order dividing community assets. This may also violate the equal protection clause as this legislation would not apply to other state retirement plans.

With respect to courts jurisdiction in the deciding asset division in the dissolution of marriage.

CHAPTER 40
DOMESTIC AFFAIRS

ARTICLE 4
DISSOLUTION OF MARRIAGE

40-4-7. Proceedings; spousal support; support of children; division of property.

G. The court may modify and change any order or agreement merged into an order in respect to the guardianship, care, custody, maintenance or education of the children whenever circumstances render such change proper. The district court shall have exclusive jurisdiction of all matters pertaining to the guardianship, care, custody, maintenance and education of the children until the parents' obligation of support for their children terminates. The district court shall also have exclusive, continuing jurisdiction with reference to the property decreed or funds created for the children's maintenance and education.

With respect to Cost of Living Adjustments to benefits

10-11-118.1. Adjustment of benefits.
A. If payment of a pension or other retirement benefit causes a decrease in the amount of monetary payments or other needs-based benefits due to a payee from any other governmental agency, the pension or other retirement benefit shall be reduced for the period during which the pension or other retirement benefit prevents payment of another needs-based benefit to result in payment of the maximum amount possible by the association and the other governmental agency to the payee. Any amounts which would otherwise be paid out which are not paid in accordance with the provisions of this section shall not be recoverable by a payee at any later date.
B. If there is a change in the effect of a pension or other retirement benefit on any monetary payments or other needs-based benefits due to a payee from any other governmental agency, the pension or other retirement benefits shall be adjusted to result in the maximum total benefit to the payee. In no event shall any pension be increased in an amount greater than that authorized by the Public Employees Retirement Act [this article].
C. The provisions of this section are mandatory and may not be waived or declined by a payee. Each payee shall provide the association with all information necessary for the association to carry out the requirements imposed by this section.
D. If the payee fails to provide all the facts necessary to comply with the requirements imposed by this section and payment of a pension or other retirement benefit is made without making the adjustment required by this section, neither the board, the executive director nor any officer or employee of the association or the board shall be liable to any third party because the adjustment was not made as required.
E. As used in this section:
(1) "pension" means a normal retirement, survivor or disability retirement pension payable to a retired member or survivor beneficiary pursuant to the Public Employees Retirement Act;
(2) "governmental agency" means the federal government, any department or agency of the federal government, any state and any department, agency or political subdivision of a state;
(3) "total benefits" means pensions plus any other monetary payments or other needs-based benefits due to the payee from any governmental agency;
(4) "needs-based benefit" means monetary or other benefits for which a determination of eligibility is based upon the recipient's level of income and resources; and
(5) "payee" means a retired member or the refund beneficiary or survivor beneficiary of a retired member.

History: 1978 Comp., § 10-11-118.1, enacted by Laws 1992, ch. 116, § 9; 1993, ch. 160, § 5; 1997, ch. 189, § 18.

With respect to division of property and the courts discretion in making orders

10-11-136. Division of funds as community property.
A court of competent jurisdiction, solely for the purposes of effecting a division of community property in a divorce or legal separation proceeding, may provide by appropriate order for a determination and division of a community interest in the pensions or other benefits provided for in the Public Employees Retirement Act [this article]. In so doing, the court shall fix the manner in which warrants shall be issued, may order direct payments to a person with a community interest in the pensions or other benefits, may require the election of a specific form of payment and designation of a specific survivor pension beneficiary, refund beneficiary or survivor pension beneficiary designated in accordance with Section 10-11-14.5 NMSA 1978 and may restrain the refund of accumulated member contributions. Payments made pursuant to such orders shall only be made when member contributions are refunded or a pension is payable in accordance with the provisions of the Public Employees Retirement Act. The court shall not alter the manner in which the amount of pensions or other benefits is calculated by the association or cause any increase in the actuarial present value of the pensions or other benefits to be paid by the association.

History: Laws 1987, ch. 253, § 136; 1991, ch. 149, § 2; 1993, ch. 160, § 7; 1995, ch. 115, § 3.

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