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| SPONSOR: | Fidel | DATE TYPED: | 03/03/99 | HB | |||
| SHORT TITLE: | IRS Compliance for Educational Retirement | SB | 278 | ||||
| ANALYST: | Eaton | ||||||
| Subsequent
Years Impact |
Recurring
or Non-Rec |
Fund
Affected | ||
| FY99 | FY2000 | |||
| NFI | ERA Retirement | |||
(Parentheses ( ) Indicate Expenditure Decrease)
SOURCES OF INFORMATION
Educational Retirement Board (ERB)
State Department of Education (SDE)
SUMMARY
Synopsis of Bill
This bill adds a new section to the Educational Retirement Act by giving the Educational Retirement Board (ERB) authorization to establish a qualified excess benefit arrangement (QEBA) for employees hired before July 1, 1999. New Mexico law does not place an upper limit on benefits a government retirement plan may pay a member while the Internal Revenue Code (IRC) does have an upper limit.
According to the Educational Retirement Board (ERB), there are five physicians at the University of New Mexico Medical Center who are currently eligible to retire but who exceed the upper limit set forth in the Internal Revenue Code (IRC).
Under Section 415(M) of the Internal Revenue Code, the Educational Retirement Board may establish a qualified benefit arrangement (QEBA) to accommodate members in a government retirement plan who exceed the upper limit in benefits payable set forth in Section 415(B) if the Internal Revenue Code.
Passage of this legislation would allow the Educational Retirement Board to establish a QEBA so that those members who exceed the upper limit in benefits payable pursuant to the Internal Revenue Code, may be paid the full amount in benefits they are due upon retirement.
If this legislation is not enacted, certain members who exceed the limit set forth in Section 415(B) will not be able to receive all of the retirement benefits to which they are entitled.
FISCAL IMPLICATIONS
The Educational Retirement Board (ERB) reports that this bill would have no impact on the actuarial soundness of the retirement fund.
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