HOUSE APPROPRIATIONS AND FINANCE COMMITTEE SUBSTITUTE FOR
HOUSE BILL 644
50th legislature - STATE OF NEW MEXICO - first session, 2011
AN ACT
RELATING TO THE PUBLIC PEACE, HEALTH, SAFETY AND WELFARE; AMENDING THE PUBLIC EMPLOYEES RETIREMENT ACT AND THE EDUCATIONAL RETIREMENT ACT; REDUCING COST-OF-LIVING ADJUSTMENTS AND INCREASING AGE AND SERVICE REQUIREMENTS FOR RETIREMENT OF CERTAIN EMPLOYEES; AUTHORIZING THE PURCHASE OF SERVICE CREDIT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 10-11-26.2 NMSA 1978 (being Laws 1994, Chapter 128, Section 3, as amended) is amended to read:
"10-11-26.2. STATE GENERAL MEMBER COVERAGE PLAN 3--AGE AND SERVICE CREDIT REQUIREMENTS FOR NORMAL RETIREMENT.--
A. Under state general member coverage plan 3:
(1) for a member who is a peace officer and for a member who is not a peace officer but was a retired member or a member [on June 30, 2010] with five or more years of service credit on or before July 1, 2011, the age and service credit requirements for normal retirement are:
(a) age sixty-five years or older and five or more years of service credit;
(b) age sixty-four years and eight or more years of service credit;
(c) age sixty-three years and eleven or more years of service credit;
(d) age sixty-two years and fourteen or more years of service credit;
(e) age sixty-one years and seventeen or more years of service credit;
(f) age sixty years and twenty or more years of service credit; and
(g) any age and twenty-five or more years of service credit; and
(2) for a member who is not a peace officer and was not a retired member or a member [on June 30, 2010] with five or more years of service credit on or before July 1, 2011, the age and service requirements for normal retirement are:
(a) age sixty-seven years or older and five or more years of service credit; or
(b) [any] age fifty-five years or older if the sum of the member's age and years of service credit equals at least eighty [or
(c) any age and thirty or more years of service credit].
B. As used in this section, "peace officer" means any employee of the state with a duty to maintain public order or to make arrests for crime, whether that duty extends to all crimes or is limited to specific crimes, and who is not specifically covered by another coverage plan."
SECTION 2. Section 10-11-45 NMSA 1978 (being Laws 1987, Chapter 253, Section 45, as amended) is amended to read:
"10-11-45. MUNICIPAL GENERAL MEMBER COVERAGE PLAN 1--AGE AND SERVICE REQUIREMENTS FOR NORMAL RETIREMENT.--Under municipal general member coverage plan 1:
A. for a member who was a retired member or a member [on June 30, 2010] with five or more years of service credit on or before July 1, 2011, the age and service requirements for normal retirement are:
(1) age sixty-five years or older and five or more years of service credit;
(2) age sixty-four years and eight or more years of service credit;
(3) age sixty-three years and eleven or more years of service credit;
(4) age sixty-two years and fourteen or more years of service credit;
(5) age sixty-one years and seventeen or more years of service credit;
(6) age sixty years and twenty or more years of service credit; or
(7) any age and twenty-five or more years of service credit; and
B. for a member who was not a retired member or a member [on June 30, 2010] with five or more years of service credit on or before July 1, 2011, the age and service requirements for normal retirement are:
(1) age sixty-seven years or older and five or more years of service credit; or
(2) [any] age fifty-five years or older if the sum of the member's age and years of service credit equals at least eighty [or
(3) any age and thirty or more years of service credit]."
SECTION 3. Section 10-11-51 NMSA 1978 (being Laws 1987, Chapter 253, Section 51, as amended) is amended to read:
"10-11-51. MUNICIPAL GENERAL MEMBER COVERAGE PLAN 2--AGE AND SERVICE REQUIREMENTS FOR NORMAL RETIREMENT.--Under municipal general member coverage plan 2:
A. for a member who was a retired member or a member [on June 30, 2010] with five or more years of service credit on or before July 1, 2011, the age and service requirements for normal retirement are:
(1) age sixty-five years or older and five or more years of service credit;
(2) age sixty-four years and eight or more years of service credit;
(3) age sixty-three years and eleven or more years of service credit;
(4) age sixty-two years and fourteen or more years of service credit;
(5) age sixty-one years and seventeen or more years of service credit;
(6) age sixty years and twenty or more years of service credit; or
(7) any age and twenty-five or more years of service credit; and
B. for a member who was not a retired member or a member [on June 30, 2010] with five or more years of service credit on or before July 1, 2011, the age and service requirements for normal retirement are:
(1) age sixty-seven years or older and five or more years of service credit; or
(2) [any] age fifty-five years or older if the sum of the member's age and years of service credit equals at least eighty [or
(3) any age and thirty or more years of service credit]."
SECTION 4. Section 10-11-55.2 NMSA 1978 (being Laws 1993, Chapter 58, Section 2, as amended) is amended to read:
"10-11-55.2. MUNICIPAL GENERAL MEMBER COVERAGE PLAN 3--AGE AND SERVICE REQUIREMENTS FOR NORMAL RETIREMENT.--Under municipal general member coverage plan 3:
A. for a member who was a retired member or a member [on June 30, 2010] with five or more years of service credit on or before July 1, 2011, the age and service requirements for normal retirement are:
(1) age sixty-five years or older and five or more years of service credit;
(2) age sixty-four years and eight or more years of service credit;
(3) age sixty-three years and eleven or more years of service credit;
(4) age sixty-two years and fourteen or more years of service credit;
(5) age sixty-one years and seventeen or more years of service credit;
(6) age sixty years and twenty or more years of service credit; or
(7) any age and twenty-five or more years of service credit; and
B. for a member who was not a retired member or a member [on June 30, 2010] with five or more years of service credit on or before July 1, 2011, the age and service requirements for normal retirement are:
(1) age sixty-seven years or older and five or more years of service credit; or
(2) [any] age fifty-five years or older if the sum of the member's age and years of service credit equals at least eighty [or
(3) any age and thirty or more years of service credit]."
SECTION 5. Section 10-11-55.8 NMSA 1978 (being Laws 1998, Chapter 106, Section 2, as amended) is amended to read:
"10-11-55.8. MUNICIPAL GENERAL MEMBER COVERAGE PLAN 4--AGE AND SERVICE REQUIREMENTS FOR NORMAL RETIREMENT.--Under municipal general member coverage plan 4:
A. for a member who was a retired member or a member [on June 30, 2010] with five or more years of service credit on or before July 1, 2011, the age and service requirements for normal retirement are:
(1) age sixty-five years or older and five or more years of service credit;
(2) age sixty-four years and eight or more years of service credit;
(3) age sixty-three years and eleven or more years of service credit;
(4) age sixty-two years and fourteen or more years of service credit;
(5) age sixty-one years and seventeen or more years of service credit;
(6) age sixty years and twenty or more years of service credit; or
(7) any age and twenty-five or more years of service credit; and
B. for a member who was not a retired member or a member [on June 30, 2010] with five or more years of service credit on or before July 1, 2011, the age and service requirements for normal retirement are:
(1) age sixty-seven years or older and five or more years of service credit; or
(2) [any] age fifty-five years or older if the sum of the member's age and years of service credit equals at least eighty [or
(3) any age and thirty or more years of service credit]."
SECTION 6. Section 10-11-118 NMSA 1978 (being Laws 1987, Chapter 253, Section 118, as amended) is amended to read:
"10-11-118. COST-OF-LIVING ADJUSTMENTS.--
A. For the purposes of this section:
(1) "adjustment factor" means a multiplicative factor computed to provide a pension adjustment pursuant to the provisions of Subsection C of this section;
(2) "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;
(3) "next preceding calendar year" means the full calendar year immediately prior to the preceding calendar year; and
[(1)] (4) "preceding calendar year" means the twelve-month period ending on the December 31 preceding the July 1 in which pensions are being adjusted [and
(2) "second preceding calendar year" means the full calendar year prior to the preceding calendar year].
B. The amount of pension payable to a qualified pension recipient who had five or more years of service credit on or before July 1, 2011 shall be increased three percent each July 1. The amount of the increase shall be determined by multiplying the amount of pension inclusive of all prior adjustments by three percent.
C. The amount of pension payable to a qualified pension recipient who did not have five or more years of service credit on or before July 1, 2011 shall be increased annually and cumulatively each July 1. The amount of the increase shall be determined by applying an adjustment factor that results in an adjustment equal to three-fourths of the percentage increase of the consumer price index between the next preceding calendar year and the preceding calendar year, except that the adjustment shall not exceed three percent nor shall it be less than zero percent. The amount of pension payable shall not be decreased in the event that there is a decrease in the consumer price index between the next preceding calendar year and the preceding calendar year.
[C.] D. A qualified pension recipient is:
(1) a normal retired member who had five or more years of service credit on or before July 1, 2011 and who has been retired for at least two full calendar years from the effective date of the latest retirement prior to July 1 of the year in which the pension is being adjusted;
(2) a normal retired member who has attained age sixty-five years and been retired for at least one full calendar year from the effective date of the latest retirement prior to July 1 of the year in which the pension is being adjusted;
(3) a disability retired member who has been retired for at least one full calendar year from the effective date of the latest retirement prior to July 1 of the year in which the pension is being adjusted;
(4) a survivor beneficiary who has received a survivor pension for at least two full calendar years; or
(5) 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 prior to July 1 of the year in which the pension is being adjusted.
[D.] E. A qualified pension recipient may decline an increase in a pension by giving the association written notice of the decision to decline the increase at least thirty days prior to the date the increase would take effect."
SECTION 7. Section 22-11-23 NMSA 1978 (being Laws 1981, Chapter 293, Section 2, as amended by Laws 2009, Chapter 286, Section 1 and by Laws 2009, Chapter 288, Section 14) is amended to read:
"22-11-23. RETIREMENT ELIGIBILITY--INITIAL MEMBERSHIP PRIOR TO JULY 1, 2010.--
A. The retirement eligibility for a member who either was a member on June 30, 2010, or was a member at any time prior to that date and had not, on that date, been refunded all member contributions pursuant to Subsection A of Section 22-11-15 NMSA 1978, is as follows:
(1) a member shall be eligible for retirement benefits pursuant to the Educational Retirement Act when [either] any of the following conditions occurs:
(a) for a member who has acquired five or more years of contributory employment before July 1, 2011, the sum of the member's age and years of earned service credit equals seventy-five; [or]
(b) the member is at least fifty-five years of age and the sum of the member's age and earned service credit equals seventy-five; or
(c) upon completion of five years of earned service credit and upon becoming sixty-five years of age;
(2) a member under sixty years of age eligible to retire under Paragraph (1) of this subsection may retire and receive retirement benefits pursuant to the Educational Retirement Act that the member would be eligible to receive if the member were to retire at the age of sixty years reduced by six-tenths of one percent for each one-fourth, or portion thereof, year that retirement occurs prior to the member's sixtieth birthday but after the fifty-fifth birthday and one and eight-tenths percent for each one-fourth, or portion thereof, year that retirement occurs prior to age fifty-five; or
(3) a member who has acquired five or more years of contributory employment before July 1, 2011 and who is under sixty years of age acquiring twenty-five or more years of earned and allowed service credit may retire and receive retirement benefits pursuant to the Educational Retirement Act computed on the same basis as if the member were sixty years of age.
B. A member shall be subject to the provisions of Paragraphs (2) and (3) of Subsection A of this section as they existed at the beginning of the member's last cumulated four quarters of earned service credit, regardless of later amendment."
SECTION 8. Section 22-11-23.1 NMSA 1978 (being Laws 2009, Chapter 286, Section 2 and Laws 2009, Chapter 288, Section 15) is amended to read:
"22-11-23.1. RETIREMENT ELIGIBILITY--INITIAL MEMBERSHIP ON OR AFTER JULY 1, 2010.--
A. A member who initially became a member on or after July 1, 2010 or a member who was a member at any time prior to that date and had, before that date, been refunded all member contributions pursuant to Subsection A of Section 22-11-15 NMSA 1978, shall be eligible for retirement benefits pursuant to the Educational Retirement Act when one of the following conditions occurs:
(1) [the member is any age and has thirty or more years of earned service credit;
(2)] the member is at least sixty-seven years of age and has five or more years of earned service credit; or
[(3)] (2) the member is age fifty-five years or older and the sum of the member's age and years of earned service credit equals at least eighty; provided that a member who retires pursuant to this paragraph shall be subject to the benefit reductions provided in Paragraphs (1) and (2) of Subsection H of Section 22-11-30 NMSA 1978.
B. A member shall be subject to the provisions of this section as they existed at the beginning of the member's last cumulated four quarters of earned service credit, regardless of later amendment."
SECTION 9. Section 22-11-27 NMSA 1978 (being Laws 1967, Chapter 16, Section 150, as amended) is amended to read:
"22-11-27. DEFERRED RETIREMENT--RESTRICTION.--
A. A member eligible for retirement may continue in employment and shall continue to pay contributions as provided by the Educational Retirement Act.
[B. A member may terminate his employment and retire at any time after his age and his earned service credit equal the sum of seventy-five if the contributions he has made are left in the fund.
C. A member having five years or more of earned service credit may terminate his employment and retire at any time after reaching the age of sixty-five years if the contributions he has made are left in the fund.]
B. A member may terminate employment prior to retirement and leave the member's contributions in the fund, and may thereafter retire upon satisfying the retirement eligibility requirements in Section 22-11-23 or 22-11-23.1 NMSA 1978.
[D.] C. No member shall be on a retirement status while engaged in employment unless the employment falls within exceptions established by statute or rule of the board."
SECTION 10. Section 22-11-34 NMSA 1978 (being Laws 1967, Chapter 16, Section 157, as amended) is amended to read:
"22-11-34. ALLOWED SERVICE CREDIT.--
A. A member shall be certified to have acquired allowed service credit pursuant to the Internal Revenue Code of 1986 for those periods of time when the member was:
(1) employed prior to July 1, 1967 in a federal educational program within New Mexico, including United States Indian schools and civilian conservation corps camps. This service credit shall be allowed without contribution;
(2) engaged in military service that interrupted the member's employment in New Mexico if the member returned to employment within eighteen months following honorable discharge. This service credit shall be allowed without contribution;
(3) engaged in United States military service or the commissioned corps of the public health service from which the member was honorably discharged; provided that:
(a) the member shall have five years or more of contributory employment to be eligible to purchase allowed service credit pursuant to this paragraph;
(b) the member shall contribute to the fund, for each year of service credit the member elects to purchase, a sum equal to the member's average annual actual salary for the five years preceding the date of the contribution multiplied by the sum of the member contribution rate and the employer contribution rate in effect at the time of the member's written election to purchase, subject to the federal Uniformed Services Employment and Reemployment Rights Act of 1994;
(c) full payment shall be made in a single lump sum within sixty days of the date that the member is informed of the amount of the payment; and
(d) the portion of the purchase cost derived from the employer's contribution rate shall be credited to the fund and, in the event that a member requests a refund of contributions pursuant to Section 22-11-15 NMSA 1978, the member shall not be entitled to a refund of that portion of the purchase cost derived from the employer contribution rate; or
(4) employed:
(a) in a public school or public institution of higher learning in another state, territory or possession of the United States;
(b) in a United States military dependents' school operated by a branch of the armed forces of the United States;
(c) as provided in Paragraph (1) of this subsection after July 1, 1967; or
(d) in a private school or institution of higher learning in New Mexico whose education program is accredited or approved by the department at the time of employment.
B. Effective July 1, 2001, the member or employer under Paragraph (4) of Subsection A of this section shall contribute to the fund for each year of allowed service credit desired an amount equal to the actuarial value of the service purchased as defined by the board. Payment pursuant to Paragraph (4) of Subsection A of this section may be made in installments, at the discretion of the board, over a period not to exceed one year and, if the sum paid does not equal the amount required for any full year of allowed service credit, the member shall acquire allowed service credit for that period of time that is proportionate to the payment made. Half credit may be allowed without contribution for not more than ten years of the educational service described by Subparagraph (a) of Paragraph (4) of Subsection A of this section if that service was prior to June 13, 1953 and if the member was employed in New Mexico prior to June 13, 1953 in a position covered by the Educational Retirement Act or a law repealed by that act. No allowed service credit shall be purchased pursuant to Paragraph (4) of Subsection A of this section unless the member is currently employed by a local administrative unit.
C. At any time prior to retirement, a member may purchase service credit in calendar quarterly increments, subject to the following conditions:
(1) the member has at least five years of service credit acquired as a result of employment by a local administrative unit;
(2) the aggregate amount of service credit purchased pursuant to this subsection does not exceed one year;
(3) the member pays full actuarial present value of the amount of the increase in the employee's pension as a consequence of the purchase as determined by the board;
(4) the member pays the full cost of the purchase within sixty days of the date the member is informed of the amount of the payment; and
(5) service credit purchased under this subsection shall be treated as earned service credit for the purposes of determining eligibility for retirement or disability benefits but shall not be used to determine the final average salary.
[C.] D. No member shall be certified to have acquired allowed service credit:
(1) under any single paragraph or the combination of only Paragraphs (1) and (4) or only Paragraphs (2) and (3) of Subsection A of this section in excess of five years; or
(2) in excess of ten years for any other combination of Paragraphs (1) through (4) of Subsection A of this section.
[D.] E. A member receiving service credit under Subsection C or Paragraph (3) or (4) of Subsection A of this section who enrolls in the retiree health care authority shall make contributions pursuant to Subsection C of Section 10-7C-15 NMSA 1978.
[E.] F. The provisions of this section are made applicable to the services described prior to as well as after the effective date of the Educational Retirement Act."
SECTION 11. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2011.
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