HB0194

HOUSE BILL 194

51st legislature - STATE OF NEW MEXICO - second session, 2014

INTRODUCED BY

William "Bill" R. Rehm

AN ACT

RELATING TO PUBLIC EMPLOYEES; AMENDING THE PUBLIC EMPLOYEES RETIREMENT ACT AND PUBLIC EMPLOYER GROUP INSURANCE PROVISIONS; DEFINING "PUBLIC SAFETY EMPLOYEE"; PROVIDING THAT RETIRED PUBLIC SAFETY EMPLOYEES MAY RETURN TO PUBLIC SAFETY EMPLOYMENT WITHOUT SUSPENDING THEIR PENSIONS DURING REEMPLOYMENT; PROVIDING THAT CERTAIN REEMPLOYED PUBLIC SAFETY EMPLOYEES AND THEIR AFFILIATED PUBLIC EMPLOYERS ARE NOT REQUIRED TO PAY THE CONTRIBUTIONS UNDER THE APPLICABLE MEMBER COVERAGE PLAN; REQUIRING THAT THE STATE OR ANY OTHER AFFILIATED PUBLIC EMPLOYER PAY PUBLIC SAFETY EMPLOYEES' MEMBER CONTRIBUTIONS AND ALL GROUP INSURANCE CONTRIBUTIONS IF SUCH AN EMPLOYEE SUSTAINS A NON-ADMINISTRATIVE WORK-RELATED INJURY RENDERING THE EMPLOYEE ABSENT FROM WORK ON APPROVED WORKERS' COMPENSATION LEAVE.

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

SECTION 1. Section 10-7-4 NMSA 1978 (being Laws 1941, Chapter 188, Section 1, as amended) is amended to read:

"10-7-4. GROUP INSURANCE--CAFETERIA PLAN--CONTRIBUTIONS FROM PUBLIC FUNDS.--

A. All state departments and institutions and all political subdivisions of the state, excluding municipalities, counties and political subdivisions of the state with twenty-five employees or fewer, shall cooperate in providing group term life, medical or disability income insurance for the benefit of eligible employees or salaried officers of the respective departments, institutions and subdivisions.

B. The group insurance contributions of the state or any of its departments or institutions, including institutions of higher education and the public schools, shall be made as follows:

(1) at least seventy-five percent of the cost of the insurance of an employee whose annual salary is less than fifteen thousand dollars ($15,000);

(2) at least seventy percent of the cost of the insurance of an employee whose annual salary is fifteen thousand dollars ($15,000) or more but less than twenty thousand dollars ($20,000);

(3) at least sixty-five percent of the cost of the insurance of an employee whose annual salary is twenty thousand dollars ($20,000) or more but less than twenty-five thousand dollars ($25,000); and

(4) at least sixty percent of the cost of the insurance of an employee whose annual salary is twenty-five thousand dollars ($25,000) or more.

C. Effective July 1, 2004, the group insurance contributions of the state or any of its executive, judicial or legislative departments, including agencies, boards or commissions, shall be made as follows; provided that the contribution percentage shall be the same for all affected public employees in a given salary bracket:

(1) up to eighty percent of the cost of the insurance of an employee whose annual salary is less than thirty thousand dollars ($30,000);

(2) up to seventy percent of the cost of the insurance of an employee whose annual salary is thirty thousand dollars ($30,000) or more but less than forty thousand dollars ($40,000); and

(3) up to sixty percent of the cost of the insurance of an employee whose annual salary is forty thousand dollars ($40,000) or more.

D. Except as provided in Subsection G of this section, effective July 1, 2005, the group insurance contributions of the state or any of its executive, judicial or legislative departments, including agencies, boards or commissions, shall be made as follows; provided that the contribution percentage shall be the same for all affected public employees in a given salary bracket:

(1) up to eighty percent of the cost of the insurance of an employee whose annual salary is less than fifty thousand dollars ($50,000);

(2) up to seventy percent of the cost of the insurance of an employee whose annual salary is fifty thousand dollars ($50,000) or more but less than sixty thousand dollars ($60,000); and

(3) up to sixty percent of the cost of the insurance of an employee whose annual salary is sixty thousand dollars ($60,000) or more.

E. Effective July 1, 2013, the employer shall pay one hundred percent of basic life insurance premiums for employees, and employees who choose to carry disability insurance shall pay one hundred percent of the premium.

F. The state shall not make any group insurance contributions for legislators. A legislator shall be eligible for group benefits only if the legislator contributes one hundred percent of the cost of the insurance.

G. An affiliated public employer, as defined pursuant to the Public Employees Retirement Act, in addition to paying the employer portion of the group insurance contributions, shall be responsible for one hundred percent of the employee group insurance contributions due and payable on or after July 1, 2014 and applicable to an injured public safety employee as provided in Section 10-11-5.1 NMSA 1978. The group insurance contributions paid by the employer pursuant to this subsection shall be paid for the duration of the employee's approved leave.

[G.] H. As used in this section, "cost of the insurance" means the premium required to be paid to provide coverages. Any contributions of the political subdivisions of the state, except the public schools and political subdivisions of the state with twenty-five employees or fewer, shall not exceed sixty percent of the cost of the insurance.

[H.] I. When a public employee elects to participate in a cafeteria plan as authorized by the Cafeteria Plan Act and enters into a salary reduction agreement with the governmental employer, the provisions of Subsections B through [F] G of this section with respect to the maximum contributions that can be made by the employer are not violated and will still apply. The employer percentage or dollar contributions as provided in Subsections B through D of this section shall be determined by the employee's gross salary prior to any salary reduction agreement.

[I.] J. Any group medical insurance plan offered pursuant to this section shall include effective cost-containment measures to control the growth of health care costs. The responsible public body that administers a plan offered pursuant to this section shall report annually by September 1 to appropriate interim legislative committees on the effectiveness of the cost-containment measures required by this subsection.

[J.] K. Within available revenue, school districts, charter schools, participating entities pursuant to the Public School Insurance Authority Act and institutions of higher education may contribute up to eighty percent of the cost of the insurance of all employees."

SECTION 2. Section 10-11-2 NMSA 1978 (being Laws 1987, Chapter 253, Section 2, as amended) is amended to read:

"10-11-2. DEFINITIONS.--As used in the Public Employees Retirement Act:

A. "accumulated member contributions" means the amounts deducted from the salary of a member and credited to the member's individual account, together with interest, if any, credited to that account;

B. "affiliated public employer" means the state and any public employer affiliated with the association as provided in the Public Employees Retirement Act, but does not include an employer pursuant to the Magistrate Retirement Act, the Judicial Retirement Act or the Educational Retirement Act;

C. "association" means the public employees retirement association established under the Public Employees Retirement Act;

D. "disability retired member" means a retired member who is receiving a pension pursuant to the disability retirement provisions of the Public Employees Retirement Act;

E. "disability retirement pension" means the pension paid pursuant to the disability retirement provisions of the Public Employees Retirement Act;

F. "educational retirement system" means that retirement system provided for in the Educational Retirement

Act;

G. "employee" means any employee of an affiliated public employer;

H. "federal social security program" means that program or those programs created and administered pursuant to the act of congress approved August 14, 1935, Chapter 531, 49 Stat. 620, as that act may be amended;

I. "final average salary" means the final average salary calculated in accordance with the provisions of the applicable coverage plan;

J. "form of payment" means the applicable form of payment of a pension provided for in Section 10-11-117 NMSA 1978;

K. "former member" means a person who was previously employed by an affiliated public employer, who has terminated that employment and who has received a refund of member contributions;

L. "fund" means the funds included under the Public Employees Retirement Act;

M. "member" means a currently employed, contributing employee of an affiliated public employer, or a person who has been but is not currently employed by an affiliated public employer, who has not retired and who has not received a refund of member contributions; "member" also includes the following:

(1) "adult correctional officer member" means a member who is employed as an adult correctional officer or an adult correctional officer specialist by a state correctional facility of the corrections department or its successor agency;

(2) "juvenile correctional officer member" means a member who is employed as a juvenile correctional officer by the children, youth and families department or its successor agency;

(3) "municipal detention officer member" means a member who is employed by an affiliated public employer other than the state and who has inmate custodial responsibilities at a facility used for the confinement of persons charged with or convicted of a violation of a law or ordinance;

(4) "municipal fire member" means any member who is employed as a full-time nonvolunteer firefighter by an affiliated public employer and who has taken the oath prescribed for firefighters;

(5) "municipal police member" means any member who is employed as a police officer by an affiliated public employer, other than the state, and who has taken the oath prescribed for police officers; and

(6) "state police member" means any member who is an officer of the New Mexico state police and who has taken the oath prescribed for such officers;

N. "membership" means membership in the association;

O. "pension" means a series of monthly payments to a retired member or survivor beneficiary as provided in the Public Employees Retirement Act;

P. "public employer" means the state, any municipality, city, county, metropolitan arroyo flood control authority, economic development district, regional housing authority, soil and water conservation district, entity created pursuant to a joint powers agreement, council of government, conservancy district, irrigation district, water and sanitation district, water district and metropolitan water board, including the boards, departments, bureaus and agencies of a public employer, so long as these entities fall within the meaning of governmental plan as that term is used in Section 414(d) of the Internal Revenue Code of 1986, as amended;

Q. "public safety duty" means a function or duty that is performed by a public safety employee while on duty and that occurs in an inherently dangerous location or under inherently dangerous circumstances;

R. "public safety employee" means a member who retired from, or an individual who is employed in, a job that, when held by a member, is covered under a Public Employees Retirement Act member coverage plan applicable to a:

(1) state police member and adult correctional officer member;

(2) juvenile correctional officer member;

(3) municipal detention officer member;

(4) municipal fire member;

(5) municipal police member; or

(6) peace officer member;

[Q.] S. "refund beneficiary" means a person designated by the member, in writing, in the form prescribed by the association, as the person who would be refunded the member's accumulated member contributions payable if the member dies and no survivor pension is payable or who would receive the difference between pension paid and accumulated member contributions if the retired member dies before receiving in pension payments the amount of the accumulated member contributions;

[R.] T. "retire" means to:

(1) terminate employment with all employers covered by any state system or the educational retirement system; and

(2) receive a pension from a state system or the educational retirement system;

[S.] U. "retired member" means a person who has met all requirements for retirement and who is receiving a pension from the fund;

[T.] V. "retirement board" means the retirement board provided for in the Public Employees Retirement Act;

[U.] W. "salary" means the base salary or wages paid a member, including longevity pay, for personal services rendered an affiliated public employer. "Salary" shall not include overtime pay, allowances for housing, clothing, equipment or travel, payments for unused sick leave, unless the unused sick leave payment is made through continuation of the member on the regular payroll for the period represented by that payment, and any other form of remuneration not specifically designated by law as included in salary for Public Employees Retirement Act purposes. Salary in excess of the limitations set forth in Section 401(a)(17) of the Internal Revenue Code of 1986, as amended, shall be disregarded. The limitation on compensation for eligible employees shall not be less than the amount that was allowed to be taken into account under the state retirement system acts in effect on July 1, 1993. For purposes of this subsection, "eligible employee" means an individual who was a member of a state system before the first plan year beginning after December 31, 1995;

[V.] X. "state system" means the retirement programs provided for in the Public Employees Retirement Act, the Magistrate Retirement Act and the Judicial Retirement Act;

[W.] Y. "state retirement system acts" means collectively the Public Employees Retirement Act, the Magistrate Retirement Act, the Judicial Retirement Act and the Volunteer Firefighters Retirement Act; and

[X.] Z. "survivor beneficiary" means a person who receives a pension or who has been designated to be paid a pension as a result of the death of a member or retired member."

SECTION 3. A new section of the Public Employees Retirement Act, Section 10-11-5.1 NMSA 1978, is enacted to read:

"10-11-5.1. [NEW MATERIAL] CREDITED SERVICE--PAYMENT OF INJURED PUBLIC SAFETY EMPLOYEES' MEMBER CONTRIBUTIONS.--

A. An affiliated public employer, in addition to paying the applicable employer contributions, shall be responsible for one hundred percent of the member contributions due and payable for service credit earned on or after July 1, 2014 and applicable to a public safety employee who is injured while performing a public safety duty and the injury renders the employee absent from work pursuant to approved workers' compensation leave.

B. The member contributions paid by the affiliated public employer pursuant to Subsection A of this section shall be paid for the duration of the public safety employee's workers' compensation leave.

C. A pension payable to a member whose affiliated public employer pays the member contributions pursuant to this section shall be an amount equal to the pension payment the member would receive if all member contributions had been paid by the member."

SECTION 4. Section 10-11-8 NMSA 1978 (being Laws 1987, Chapter 253, Section 8, as amended) is amended to read:

"10-11-8. NORMAL RETIREMENT--RETURN TO EMPLOYMENT--BENEFITS CONTINUED--CONTRIBUTIONS.--

A. A member may retire upon fulfilling the following requirements prior to the selected date of retirement:

(1) a written application for normal retirement, in the form prescribed by the association, is filed with the association;

(2) employment is terminated with all employers covered by any state system or the educational retirement system;

(3) the member selects an effective date of retirement that is the first day of a calendar month; and

(4) the member meets the age and service credit requirement for normal retirement specified in the coverage plan applicable to the member.

B. The amount of normal retirement pension is determined in accordance with the coverage plan applicable to the member.

C. Except as provided in Subsection E or G of this section, on or after July 1, 2010, a retired member may be subsequently employed by an affiliated public employer only pursuant to the following provisions:

(1) the retired member has not been employed as an employee of an affiliated public employer or retained as an independent contractor by the affiliated public employer from which the retired member retired for at least twelve consecutive months from the date of retirement to the commencement of the subsequent employment or reemployment with an affiliated public employer;

(2) the [previously] retired member's pension shall be suspended upon commencement of the subsequent employment;

(3) except as provided in Subsection [G] H of this section, during the subsequent employment, the [previously] retired member shall not become a member and thus the [previously] retired member shall not accrue service credit, and the [previously] retired member and that person's affiliated public employer shall not make contributions under any coverage plan pursuant to the Public Employees Retirement Act; and

(4) upon termination of the subsequent employment, the [previously] retired member's pension shall resume in accordance with the provisions of Subsection A of this section.

D. Notwithstanding the provisions of Subsection B of Section 10-11-118 NMSA 1978, on and after July 1, 2013, if a retired member becomes employed with an employer pursuant to the Educational Retirement Act:

(1) the retired member's cost-of-living pension adjustment shall be suspended upon commencement of the employment; and

(2) upon termination of the employment, the retired member's suspended cost-of-living pension adjustment shall be reinstated as provided under Subsection B of

Section 10-11-118 NMSA 1978.

E. The provisions of Subsections C and [H] I of this section do not apply to:

(1) a retired member employed by the legislature for legislative session work;

(2) a retired member employed temporarily as a precinct board member for a municipal election or an election covered by the Election Code; [or]

(3) a county undersheriff;

(4) a retired public safety employee who is subsequently employed as an instructor at the New Mexico law enforcement academy or a state, local or municipal police, sheriff's or firefighter training academy and who is paid for that employement a salary in an amount less than or equal to thirty thousand dollars ($30,000) in any fiscal year; or

[(3)] (5) a retired member who is elected to serve a term as an elected official; provided that:

(a) the retired member files an irrevocable exemption from membership with the association within thirty days of taking office; and

(b) the irrevocable exemption shall be for the elected official's term of office.

F. A retired member who returns to employment during retirement pursuant to Subsection E of this section:

(1) is entitled to receive retirement benefits but is not entitled to accrue service credit or to [acquire or] purchase service credit in the future for the period of the [previously] retired member's [reemployment] subsequent employment with an affiliated public employer; and

(2) shall not pay the member contributions, and the retired member's affiliated public employer shall not pay the employer contributions, under the applicable member coverage plan pursuant to the Public Employees Retirement Act during the period of subsequent employment.

G. On and after July 1, 2014, a retired public safety employee may return to employment with an affiliated public employer as a public safety employee without suspension of the employee's pension if, during the subsequent employment, the employee is paid by the affiliated public employer a salary in an amount not to exceed sixty thousand dollars ($60,000) in any fiscal year. During the subsequent public safety employment, the employee shall not accrue service credit and is not entitled to purchase service credit and the employee's affiliated public employer shall pay both the member and employer contributions required under the applicable member coverage plan.

H. Member contributions paid, during the period of subsequent employment, on behalf of a retired public safety employee who returns to employment pursuant to the provisions of Subsection G of this section shall not be refundable.

[G.] I. At any time during a [previously] retired member's subsequent employment pursuant to Subsection C of this section, the [previously] retired member may elect to become a member and, upon membership, the following conditions shall apply:

(1) the [previously retired] member and the subsequent affiliated public employer shall make the required employee and employer contributions, and the [previously retired] member shall accrue service credit for the period of subsequent employment; and

(2) when the [previously retired] member terminates the subsequent employment with an affiliated public employer, the [previously retired] member shall retire according to the provisions of the Public Employees Retirement Act, subject to the following conditions:

(a) payment of the pension shall resume in accordance with the provisions of Subsection A of this section;

(b) unless the [previously retired] member accrued at least three years of service credit on account of the subsequent employment, the recalculation of pension shall: 1) employ the form of payment selected by the [previously retired] member at the time of the first retirement; and 2) use the provisions of the coverage plan applicable to the member on the date of the first retirement; and

[H.] J. A [previously] retired member who returned to work with an affiliated public employer prior to July 1, 2010 shall be subject to the provisions of this section in effect on the date the [previously] retired member returned to work; provided that:

(1) on and after July 1, 2010, the [previously] retired member shall pay the employee contribution in an amount specified in the Public Employees Retirement Act for the position in which the [previously] retired member is subsequently employed;

(2) notwithstanding the provisions of Subsection B of Section 10-11-118 NMSA 1978, on and after July 1, 2013, the [previously] retired member's cost-of-living pension adjustment shall be suspended; and

(3) upon termination of the subsequent employment with an affiliated public employer, the [previously] retired member's cost-of-living pension adjustment shall be reinstated as provided in Subsection B of Section 10-11-118 NMSA 1978.

[I.] K. The pension of a member who has earned service credit under more than one coverage plan shall be determined as follows:

(1) the pension of a member who has three or more years of service credit earned on or before June 30, 2013 under each of two or more coverage plans shall be determined in accordance with the coverage plan that produces the highest pension;

(2) the pension of a member who has service credit earned on or before June 30, 2013 under two or more coverage plans but who has three or more years of service credit under only one of those coverage plans shall be determined in accordance with the coverage plan in which the member has three or more years of service credit. If the service credit is acquired under two different coverage plans applied to the same affiliated public employer as a consequence of an election by the members, adoption by the affiliated public employer or a change in the law that results in the application of a coverage plan with a greater pension, the greater pension shall be paid a member retiring from the affiliated public employer under which the change in coverage plan took place regardless of the amount of service credit under the coverage plan producing the greater pension; provided that the member has three or more years of continuous employment with that affiliated public employer immediately preceding or immediately preceding and immediately following the date the coverage plan changed;

(3) the pension of a member who has service credit earned on or before June 30, 2013 under each of two or more coverage plans and who has service credit earned under any coverage plan on or after July 1, 2013 shall be equal to the sum of:

(a) the pension attributable to the service credit earned on or before June 30, 2013 determined pursuant to Paragraph (1) or (2) of this subsection; and

(b) the pension attributable to the service credit earned under each coverage plan on or after July 1, 2013;

(4) the pension of a member who has service credit earned only on and after July 1, 2013 shall be equal to the sum of the pension attributable to the service credit the member has accrued under each coverage plan; and

(5) the provisions of each coverage plan for the purpose of this subsection shall be those in effect at the time the member ceased to be covered by the coverage plan. "Service credit", for the purposes of this subsection, shall be only personal service rendered an affiliated public employer and credited to the member under the provisions of Subsection A of Section 10-11-4 NMSA 1978. Service credited under any other provision of the Public Employees Retirement Act shall not be used to satisfy the three-year service credit requirement of this subsection."

SECTION 5. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2014.

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