HOUSE BILL 288
47th legislature - STATE OF NEW MEXICO - first session, 2005
INTRODUCED BY
Mimi Stewart
FOR THE LEGISLATIVE EDUCATION STUDY COMMITTEE
AN ACT
RELATING TO EDUCATIONAL RETIREMENT; CHANGING THE COST-OF-LIVING ADJUSTMENT; MAKING AN APPROPRIATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 22-11-31 NMSA 1978 (being Laws 1979, Chapter 333, Section 2, as amended) is amended to read:
"22-11-31. COST-OF-LIVING ADJUSTMENT [ADDITIONAL CONTRIBUTIONS].--
A. For the purposes of this section:
[(1) "adjustment factor" means a multiplicative factor computed to provide an annuity adjustment pursuant to the provisions of Subsection B of this section;
(2)] (1) "annuity" means any benefit payable under the Educational Retirement Act or the Public Employees Retirement Reciprocity Act as a retirement benefit, disability benefit or survivor benefit; and
[(3)] (2) "calendar year" means the full twelve months beginning January 1 and ending December 31.
[(4) "consumer price index" means the average of the monthly consumer price indexes for a calendar year for the entire United States for all items as published by the United States department of labor;
(5) "next preceding calendar year" means the full calendar year immediately prior to the preceding calendar year; and
(6) "preceding calendar year" means the full calendar year preceding the July 1 on which a benefit is to be adjusted.
B. On or after July 1, 1984, each annuity shall be adjusted annually and cumulatively commencing on July 1 of the year in which a member attains the age of sixty-five or on July 1 following the year a member retires, whichever is later. The annuity shall be adjusted by applying an adjustment factor that results in either an adjustment equal to one-half of the percentage increase or decrease of the consumer price index between the next preceding calendar year and the preceding calendar year, except that the adjustment shall not exceed four percent, in absolute value, nor be less than two percent, in absolute value. In the event that the percentage increase or decrease of the consumer price index is less than two percent, in absolute value, the adjustment factor shall be the same as the percentage increase or decrease of the consumer price index. No negative adjustment in the retirement benefit shall reduce the member's benefit below that which he received upon the date of his retirement.
C. A retired member whose benefit is subject to adjustment under the provisions of the Educational Retirement Act in effect prior to July 1, 1984 shall have his annuity readjusted annually and cumulatively under the provisions of that act in effect prior to July 1, 1984 until July 1 of the year in which he attains the age of sixty-five, when he shall have his annuity readjusted annually and cumulatively under the provisions of this section. A member who retires after attaining the age of sixty-five shall have his annuity adjusted annually and cumulatively commencing on July 1 of the year following his retirement.
D. A retired member who returns to work shall be subject to the provisions of this section as they exist at the time of his final retirement.]
B. On each July 1, an annuity shall be increased by three percent if:
(1) the retired member has been retired for at least two full calendar years after the effective date of the latest retirement;
(2) the retired member has attained the age of sixty-five years and has been retired for at least one full calendar year after the effective date of the latest retirement;
(3) the annuity is paid to a survivor beneficiary who has received a survivor benefit for at least two full calendar years; or
(4) the annuity is paid to a survivor beneficiary of a deceased retired member who otherwise would have been retired at least two full calendar years from the effective date of the latest retirement.
[E.] C. Benefits of a member who is on a disability status in accordance with Section 22-11-35 NMSA 1978 or a member who the board certifies was disabled at regular retirement shall be adjusted in accordance with [Subsections B and C] Subsection B of this section, except that the benefits shall be adjusted annually and cumulatively commencing on July 1 [of the third full year following the year in which] following one full calendar year after the member was approved by the board for disability or retirement.
[F. The board shall adjust the benefits of each person receiving an annuity as of June 30, 1999. The adjustment shall be made on July 1, 1999 on the basis of an increase of two dollars ($2.00) per month for each year since the member's last retirement plus an increase of one dollar ($1.00) per month for each year of credited service at the time of the last retirement.]"
Section 2. APPROPRIATION.--One hundred twenty-six million fifty-eight thousand five hundred dollars ($126,058,500) is appropriated from the general fund to the educational retirement fund for expenditure in fiscal year 2005 and subsequent fiscal years for the purpose of making cost-of-living adjustments pursuant to Section 22-11-31 NMSA 1978. Any unexpended or unencumbered balance remaining at the end of a fiscal year shall not revert to the general fund.
Section 3. EFFECTIVE DATE.--The effective date of the provisions of Section 1 of this act is July 1, 2005.
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