SENATE FINANCE COMMITTEE SUBSTITUTE FOR
SENATE BILL 150
50th legislature - STATE OF NEW MEXICO - second session, 2012
AN ACT
RELATING TO PENSIONS; AMENDING THE EDUCATIONAL RETIREMENT ACT; CHANGING AGE AND SERVICE REQUIREMENTS FOR RETIREMENT OF CERTAIN EMPLOYEES; CHANGING MEMBER AND EMPLOYER CONTRIBUTION RATES.
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 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] from July 1, 2008 through June 30, 2013, an amount equal to seven and nine-tenths percent of the member's annual salary, except that for members whose annual salary is greater than twenty thousand dollars ($20,000):
(a) from July 1, 2009 through June 30, 2011, the member contribution rate shall be nine and four-tenths percent of the member's annual salary;
(b) from July 1, 2011 through June 30, 2012, the member contribution rate shall be eleven and fifteen-hundredths percent of the member's annual salary; and
(c) from July 1, 2012 through June 30, 2013, the member contribution rate shall be nine and four-tenths of the member's annual salary;
(6) from July 1, 2013 through June 30, 2014, the member contribution rate shall be nine and nine-tenths percent of the member's annual salary;
(7) from July 1, 2014 through June 30, 2015, the member contribution rate shall be ten and four-tenths percent of the member's annual salary;
(8) from July 1, 2015 through June 30, 2016, the member contribution rate shall be ten and nine-tenths percent of the member's annual salary; and
(9) on and after July 1, 2016, the member contribution rate shall be eleven and three-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;
(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, 2011, a sum equal to ten and nine-tenths percent of the annual salary of each member employed by the local administrative unit, except that for members whose annual salary is twenty thousand dollars ($20,000) or less, the local administrative unit shall contribute twelve and four-tenths percent of the member's annual salary;
(7) from July 1, 2011 through June 30, 2012, a sum equal to nine and fifteen-hundredths percent of the annual salary of each member employed by the local administrative unit, except that for members whose annual salary is twenty thousand dollars ($20,000) or less, the local administrative unit shall contribute twelve and four-tenths percent of the member's annual salary;
(8) from July 1, 2012 through June 30, 2013, a sum equal to ten and nine-tenths percent of the annual salary of each member employed by the local administrative unit, except that for members whose annual salary is twenty thousand dollars ($20,000) or less, the local administrative unit shall contribute twelve and four-tenths percent of the member's annual salary;
(9) from July 1, 2013 through June 30, 2014, a sum equal to [thirteen and fifteen-hundredths] eleven and four- tenths percent of the annual salary of each member employed by the local administrative unit; [and]
(10) [on and after] from July 1, 2014 through June 30, 2015, a sum equal to [thirteen and nine-tenths] eleven and nine-tenths percent of the annual salary of each member employed by the local administrative unit;
(11) from July 1, 2015 through June 30, 2016, a sum equal to twelve and four-tenths percent of the annual salary of each member employed by the local administrative unit;
(12) from July 1, 2016 through June 30, 2017, a sum equal to twelve and nine-tenths percent of the annual salary of each member employed by the local administrative unit;
(13) from July 1, 2017 through June 30, 2018, a sum equal to thirteen and four-tenths percent of the annual salary of each member employed by the local administrative unit; and
(14) on and after July 1, 2018, 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 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 22-11-23 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 or before June 30, 2010, [or was a member at any time prior to that date] and had not, on or before that date, been refunded all member contributions pursuant to Subsection A of Section 22-11-15 NMSA 1978 [is as follows] or was a member at any time on or before that date and had been refunded all member contributions pursuant to that subsection and had restored refunded contributions on or before June 30, 2010 occurs when:
[(1) a member shall be eligible for retirement benefits pursuant to the Educational Retirement Act when either of the following conditions occurs:
(a) the sum of the member's age and years of earned service credit equals seventy-five; or
(b) 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 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]
(1) the member has twenty-five or more years of earned and allowed service credit;
(2) the member is at least sixty-five years of age and has five or more years of earned service credit; or
(3) the sum of the member's age and years of earned service credit equals at least seventy-five; provided that a member younger than sixty years of age who retires pursuant to the provisions of this paragraph shall be subject to the benefit reductions provided in Subsection G of Section 22-11-30 NMSA 1978.
B. A member shall be subject to the provisions of Paragraphs [(2)] (1) 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 3. 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) 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.]
A. The retirement eligibility for a member who, on or after July 1, 2010, became a member or was a member at any time prior to that date and had been refunded all member contributions pursuant to Subsection A of Section 22-11-15 NMSA 1978 and had not restored refunded contributions prior to July 1, 2010 occurs when:
(1) the member 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) the sum of the member's age and earned service credit equals at least eighty; provided that a member who is younger than sixty-five years of age and who retires pursuant to this paragraph shall be subject to the benefit reductions provided in 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 4. A new section of the Educational Retirement Act, Section 22-11-23.2 NMSA 1978, is enacted to read:
"22-11-23.2. [NEW MATERIAL] RETIREMENT ELIGIBILITY-- INITIAL MEMBERSHIP ON OR AFTER JULY 1, 2012.--
A. The retirement eligibility for a member who on or after July 1, 2012 became a member or 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 and had not restored all of the refunded contributions prior to July 1, 2012 occurs when:
(1) the member is at least fifty-five years of age and has thirty or more years of earned service credit;
(2) the member is at least sixty-seven years of age and has eight or more years of earned service credit; or
(3) the member is at least fifty-five years of age and the sum of the member's age and years of earned service credit equals at least eighty; provided that a member who is younger than sixty-five years of age and who retires pursuant to this paragraph shall be subject to the benefit reductions provided in 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 5. Section 22-11-24 NMSA 1978 (being Laws 1967, Chapter 16, Section 147) is amended to read:
"22-11-24. RETIREMENT BENEFITS--MINIMUM CONTRIBUTORY EMPLOYMENT.--
A. A member [must] who was either a member on June 30, 2012 or was a member on or before June 30, 2012 and had, before that date, been refunded all member contributions pursuant to Subsection A of Section 22-11-15 NMSA 1978 and had not restored all of the refunded contributions on or before June 30, 2012, shall have acquired not less than five years of contributory employment to be eligible for retirement benefits pursuant to the Educational Retirement Act.
[B. A member desiring to retire before having completed five years of contributory employment shall be limited to the maximum benefit he would have been entitled to receive under any statute repealed by the Educational Retirement Act. A member may acquire five years or less of contributory employment by contributing to the fund, for each year of contributory employment desired, a sum equal to the prevailing combined contributions of the member and the local administrative unit in effect at the time the contributory employment is acquired. This contribution shall be computed on the member's average annual salary for the last five years of employment plus an additional sum as interest from the effective date of the Educational Retirement Act as fixed by the board, but not to exceed three percent a year.
C. Years of contributory employment purchased pursuant to this section shall not be considered as an addition to service actually performed in computing the sum of the member's retirement benefit.
D. The retirement benefits of members retired pursuant to the Educational Retirement Act prior to July 1, 1959 and who have acquired contributory employment years by purchase shall be computed upon the basis of the amount paid therefor.]
B. A member who on or after July 1, 2012 initially became a member, or who was a member on or before July 1, 2012 and had, before that date, been refunded all member contributions pursuant to Subsection A of Section 22-11-15 NMSA 1978 and had not restored all of the refunded contributions prior to July 1, 2012, shall have acquired not less than eight years of contributory employment to be eligible for retirement benefits pursuant to the Educational Retirement Act."
SECTION 6. 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 who is 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. Provided that the contributions that the member has made are left in the fund, a member eligible for retirement benefits pursuant to the provisions of Subsection A of Section 22-11-23 NMSA 1978 may terminate employment and retire at any time:
(1) if the sum of the member's age and earned service credit equals at least seventy-five;
(2) after the member has at least five years of earned service credit and is at least sixty-five years of age; or
(3) after the member has at least twenty-five years of earned and allowed service credit.
C. Provided that the contributions that the member has made are left in the fund, a member eligible for retirement benefits pursuant to the provisions of Subsection A of Section 22-11-23.1 NMSA 1978 may terminate employment and retire at any time:
(1) if the sum of the member's age and earned service credit equals at least eighty;
(2) after the member has at least five years of earned service credit and is at least sixty-seven years of age; or
(3) after the member has at least thirty years of earned service credit.
D. Provided that the contributions that the member has made are left in the fund, a member eligible for retirement benefits pursuant to the provisions of Subsection A of Section 22-11-23.2 NMSA 1978 may terminate employment and retire at any time:
(1) if the member is at least fifty-five years of age and the sum of the member's age and earned service credit equals at least eighty;
(2) after the member has at least eight years of earned service credit and is at least sixty-seven years of age; or
(3) after the member has at least thirty years of earned service credit and is at least fifty-five years of age.
[D.] E. 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 7. Section 22-11-30 NMSA 1978 (being Laws 1967, Chapter 16, Section 153, as amended by Laws 2009, Chapter 286, Section 3 and by Laws 2009, Chapter 288, Section 17) is amended to read:
"22-11-30. RETIREMENT BENEFITS.--
A. Retirement benefits for a member retired pursuant to the Educational Retirement Act on or before June 30, 1967 shall be paid monthly and shall be one-twelfth of a sum equal to one and one-half percent of the first four thousand dollars ($4,000) of the member's average annual salary and one percent of the remainder of the member's average annual salary multiplied by the number of years of the member's total service credit.
B. Retirement benefits for a member retired pursuant to the Educational Retirement Act on or after July 1, 1967 but on or before June 30, 1971 shall be paid monthly and shall be one-twelfth of a sum equal to one and one-half percent of the first six thousand six hundred dollars ($6,600) of the member's average annual salary and one percent of the remainder of the member's average annual salary multiplied by the number of years of the member's total service credit.
C. Retirement benefits for a member retired pursuant to the Educational Retirement Act on or after July 1, 1971 but on or before June 30, 1974 shall be paid monthly and shall be one-twelfth of a sum equal to one and one-half percent of the member's average annual salary multiplied by the number of years of the member's total service credit.
D. Retirement benefits for a member retired pursuant to the Educational Retirement Act on or before June 30, 1974 but returning to employment on or after July 1, 1974 for a cumulation of one or more years shall be computed pursuant to Subsection E of this section. Retirement benefits for a member retired pursuant to the Educational Retirement Act on or before June 30, 1974 but returning to employment on or after July 1, 1974 for a cumulation of less than one year shall be computed pursuant to Subsection A of this section if the member's date of last retirement was on or before June 30, 1967 or pursuant to Subsection B of this section if the member's date of last retirement was on or after July 1, 1967 but not later than June 30, 1971 or pursuant to Subsection C of this section if the member's date of last retirement was on or after July 1, 1971 but not later than June 30, 1974.
E. Retirement benefits for a member age sixty years or [over] older, retired pursuant to the Educational Retirement Act on or after July 1, 1974 but not later than June 30, 1987, shall be paid monthly and shall be one-twelfth of a sum equal to:
(1) one and one-half percent of the member's average annual salary multiplied by the number of years of service credit for:
(a) prior employment; and
(b) allowed service credit for service performed prior to July 1, 1957, except United States military service credit purchased pursuant to Paragraph (3) of Subsection A of Section 22-11-34 NMSA 1978; plus
(2) two percent of the member's average annual salary multiplied by the number of years of service credit for:
(a) contributory employment;
(b) allowed service credit for service performed after July 1, 1957; and
(c) United States military service credit for service performed prior to July 1, 1957 and purchased pursuant to Paragraph (3) of Subsection A of Section 22-11-34 NMSA 1978.
F. Retirement benefits for a member age sixty years or [over] older, retired pursuant to the Educational Retirement Act on or after July 1, 1987 but not later than June 30, 1991, shall be paid monthly and shall be one-twelfth of a sum equal to two and fifteen hundredths percent of the member's average annual salary multiplied by the number of years of the member's total service credit; provided that this subsection shall not apply to any member who was retired in any of the four quarters ending on June 30, 1987 without having accumulated not less than 1.0 years earned service credit after June 30, 1987.
G. The retirement benefits provisions of this subsection shall not apply to a member who was retired in any of the four consecutive quarters ending on June 30, 1991 without having acquired at least one year of earned service credit beginning on or after July 1, 1991. Retirement benefits for a member [age sixty or over] retired pursuant to Section 22-11-23 NMSA 1978 on or after July 1, 1991, shall be paid monthly and shall be one-twelfth of a sum equal to two and thirty-five hundredths percent of the member's average annual salary multiplied by the number of years of the member's total service credit; provided that [this subsection shall not apply to any member who was retired in any of the four consecutive quarters ending on June 30, 1991 without having accumulated at least one year earned service credit beginning on or after July 1, 1991] the benefits for a member who is younger than sixty years of age and is retiring pursuant to Paragraph (3) of Subsection A of Section 22-11-23 NMSA 1978 shall be reduced by:
(1) six-tenths percent for each one-fourth, or portion thereof, year that retirement occurs prior to the member's sixtieth birthday but after the member's fifty-fifth birthday; and
(2) one and eight-tenths percent for each one-fourth, or portion thereof, year that retirement occurs prior to the member reaching the age of fifty-five years.
H. Retirement benefits for a member, retired pursuant to Section 22-11-23.1 or 22-11-23.2 NMSA 1978, shall be paid monthly and shall be one-twelfth of a sum equal to two and thirty-five hundredths percent of the member's average annual salary multiplied by the number of years of the member's total service credit; provided that the benefit for a member retiring pursuant to Paragraph (3) of Subsection A of Section 22-11-23.1 NMSA 1978 or Paragraph (3) of Subsection A of Section 22-11-23.2 NMSA 1978 shall be reduced by:
(1) six-tenths [of one] percent for each one-fourth, or portion thereof, year that retirement occurs prior to the member's sixty-fifth birthday but after the sixtieth birthday; and
(2) one and eight-tenths percent for each one-fourth, or portion thereof, year that retirement occurs prior to the member's sixtieth birthday.
I. A member's average annual salary, pursuant to this section, shall be computed on the basis of the last five years for which contribution was made or upon the basis of any consecutive five years for which contribution was made by the member, whichever is higher; provided, however, that lump-sum payments made after July 1, 2010 of accrued sick leave or annual leave shall be excluded from the calculation of salary.
J. Unless otherwise required by the provisions of the Internal Revenue Code of 1986, members shall begin receiving retirement benefits by age seventy and six months, or upon termination of employment, whichever occurs later."
SECTION 8. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2012.
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