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AN ACT

RELATING TO EDUCATIONAL RETIREMENT; AMENDING THE EDUCATIONAL

RETIREMENT ACT TO LIMIT CONTRIBUTIONS FOR MEMBERS WHOSE

SALARIES EXCEED A CERTAIN FEDERAL LIMIT; ENSURING THAT SERVICE

CREDIT WILL NOT BE AND HAS NOT BEEN DIMINISHED BY FEDERALLY

IMPOSED CONTRIBUTION LIMITS; AUTHORIZING DEPOSITS INTO THE

EDUCATIONAL RETIREMENT FUND NECESSARY TO HOLD THE FUND

HARMLESS; RECONCILING MULTIPLE AMENDMENTS TO THE SAME SECTION

OF LAW IN LAWS 1999.

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

Section 1. Section 22-11-21 NMSA 1978 (being Laws 1967,

Chapter 16, Section 144, as amended) is amended to read:

"22-11-21. CONTRIBUTIONS--MEMBERS--LOCAL ADMINISTRATIVE

UNITS.--

A. Except as provided in Subsection C of this

section, each member shall make contributions to the fund

according to the following schedule:

(1) through June 30, 2005, an amount equal

to seven and six-tenths percent of the member's annual salary;

(2) from July 1, 2005 through June 30, 2006,

an amount equal to seven and six hundred seventy-five

thousandths percent of the member's annual salary;

(3) from July 1, 2006 through June 30, 2007,

an amount equal to seven and seventy-five hundredths percent

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of the member's annual salary;

(4) from July 1, 2007 through June 30, 2008,

an amount equal to seven and eight hundred twenty-five

thousandths percent of the member's annual salary; and

(5) on and after July 1, 2008, an amount

equal to seven and nine-tenths percent of the member's annual

salary.

B. Except as provided in Subsection C of this

section, each local administrative unit shall make an annual

contribution to the fund according to the following schedule:

(1) through June 30, 2005, a sum equal to

eight and sixty-five hundredths percent of the annual salary

of each member employed by the local administrative unit;

(2) from July 1, 2005 through June 30, 2006,

a sum equal to nine and forty-hundredths percent of the annual

salary of each member employed by the local administrative

unit;

(3) from July 1, 2006 through June 30, 2007,

a sum equal to ten and fifteen-hundredths percent of the

annual salary of each member employed by the local

administrative unit;

(4) from July 1, 2007 through June 30, 2008,

a sum equal to ten and ninety-hundredths percent of the annual

salary of each member employed by the local administrative

unit;

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(5) from July 1, 2008 through June 30, 2009,

a sum equal to eleven and sixty-five hundredths percent of the

annual salary of each member employed by the local

administrative unit;

(6) from July 1, 2009 through June 30, 2010,

a sum equal to twelve and four-tenths percent of the annual

salary of each member employed by the local administrative

unit;

(7) from July 1, 2010 through June 30, 2011,

a sum equal to thirteen and fifteen-hundredths percent of the

annual salary of each member employed by the local

administrative unit; and

(8) on and after July 1, 2011, a sum equal

to thirteen and nine-tenths percent of the annual salary of

each member employed by the local administrative unit.

C. If, in a calendar year, the salary of a member,

initially employed by a local administrative unit on or after

July 1, 1996, equals the annual compensation limit set

pursuant to Section 401(a)(17) of the Internal Revenue Code of

1986, as amended, then:

(1) for the remainder of that calendar year,

no additional member contributions or local administrative

unit contributions for that member shall be made pursuant to

this section; provided that no member shall be denied service

credit solely because contributions are not made by the member

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or on behalf of the member pursuant to the provisions of this

subsection; and

(2) the amount of the annual compensation

limit shall be divided into four equal portions and, for

purposes of attributing contributory employment and crediting

service credit, each portion shall be attributable to one of

the four quarters of the calendar year."

Section 2. Section 22-11-47 NMSA 1978 (being Laws 1991,

Chapter 118, Section 5, as amended by Laws 1999, Chapter 261,

Section 2 and also by Laws 1999, Chapter 274, Section 3) is

amended to read:

"22-11-47. ALTERNATIVE RETIREMENT PLAN--ELECTION OF

COVERAGE.--

A. Beginning October 1, 1991, any employee of the

university of New Mexico, New Mexico state university, New

Mexico institute of mining and technology, New Mexico

highlands university, eastern New Mexico university or western

New Mexico university who is eligible to become a participant

may make within ninety days of that date an irrevocable

election to participate in the alternative retirement plan.

Beginning October 1, 1999, an employee of central New Mexico

community college, Clovis community college, Luna community

college, Mesalands community college, New Mexico junior

college, northern New Mexico college, San Juan college or

Santa Fe community college who is eligible to become a

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participant may make an irrevocable election to participate in

the alternative retirement plan within ninety days of the

initial date. Thereafter, any employee who is eligible to

become a participant may make within the first ninety days of

employment with a qualifying state educational institution an

irrevocable election to participate in the alternative

retirement plan. Any employee who makes the irrevocable

election shall become a participant the first day of the first

pay period following the election. Any employee who fails to

make the irrevocable election within ninety days of October 1,

1991 or October 1, 1999, whichever is applicable, or within

the first ninety days of employment with a qualifying state

educational institution shall become or remain a regular

member if that employee is eligible to be a regular member.

B. Until the time an employee who is eligible to

become a participant elects to participate in the alternative

retirement plan, that employee shall be a regular member.

C. When an employee elects to become a

participant, any employer and employee contributions made as a

regular member shall be withdrawn from the fund and applied

instead toward the alternative retirement plan as if the

participant had been participating in the alternative

retirement plan from the commencement of employment with the

qualifying state educational institution.

Section 3. TEMPORARY PROVISION--ADDITIONAL

CONTRIBUTIONS TO THE EDUCATIONAL RETIREMENT FUND--RESTORATION

OF SERVICE CREDIT.--For each employee whose member

contributions and local administrative unit contributions were

incorrectly capped prior to July 1, 2008 because the

employee's salary exceeded the annual compensation limit set

pursuant to Section 401(a)(17) of the Internal Revenue Code of

1986, as amended:

A. the educational retirement board and the

applicable local administrative unit shall jointly determine

the amount of member contributions and local administrative

unit contributions owed but not paid;

B. the local administrative unit shall deposit

into the educational retirement fund the total amount

determined pursuant to Subsection A of this section; and

C. upon the deposit pursuant to Subsection B of

this section, the educational retirement board shall restore

to the member all of the service credit otherwise earned by

the member, but not previously credited because of the failure

to make contributions, for service during the calendar years

in which the contributions were incorrectly capped.

Section 4. EFFECTIVE DATE.--The effective date of the

provisions of this act is July 1, 2008.

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