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APPROPRIATION

(Parenthesis ( ) Indicate Revenue Decreases)

Conflicts with Section 10-11-2(M)(1) NMSA 1978 -definition of hazardous duty member.

SOURCES OF INFORMATION

Public Employees Retirement Association of New Mexico (PERA)

SUMMARY

Synopsis of Bill

This bill amends the Public Employees Retirement Act by adding a hazardous duty coverage plan (Plan 3) for correctional officers 1, 2, 3, & 4.

The scheduled age and service requirements for normal retirement are congruent with other PERA retirement plans.

Pension

Pension under plan 3 Plan A is equal to three percent of final average salary multiplied by credited service. The amount shall not exceed eighty percent of final average salary.

Average salary is calculated to be the greatest aggregate amount of salary paid a member for thirty-six consecutive months of credited service divided by thirty-six.

Contribution Rate

Member contributions will equal 7.6 percent of salary. The state shall contribute 25.1 percent.

Adoption of the plan will begin upon majority vote of members seeking coverage under the plan. The Public Employees' Retirement Board shall conduct the election in accordance with procedures adopted by the retirement board.

FISCAL IMPLICATIONS

The fiscal impact of employer contributions on the general fund is unknown at this time.

PERA reports that this coverage plan will increase actual credited service by twenty percent over state hazardous duty Plan 1 & 2.

As no actuarial study has been conducted to determine if the contribution rates are adequate, the impact to the retirement fund is unknown.

ADMINISTRATIVE IMPLICATIONS

The Public Employees Retirement Association (PERA) reports that a increase in workload will be required because of the requirement that PERA administer the election.

TECHNICAL ISSUES

Normally, changes in coverage plans are made by elections conducted by the affected governmental units, not by PERA.

Section 10-11-2(M)(1) of the Public Employees Retirement Act already defines "hazardous duty member". The definition in this bill would conflict with this statute which defines "hazardous duty member" as "a state policeman who is a member and who is a juvenile or adult correctional officer employed by a corrections facility of the corrections department or its successor agency."

An actuarial study will be required to determine the actuarial soundness of this new coverage plan.

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