HB 251 — ED. RETIREMENT BENEFICIARY CHANGES

HOUSEAN BILLACT 251RELATING 57THTO LEGISLATUREEDUCATIONAL -STATEOFNEWMEXICO-RETIREMENT; FIRST SESSION, 2025 INTRODUCED BY William A.

Hall II and Tanya Mirabal Moya and Brian G.

Baca and Luis M.

Terrazas and Catherine J.

Cullen 7 9 AN ACT RELATING TO EDUCATIONAL RETIREMENT;

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

Section 22-11-29 NMSA 1978 (being Laws 1967, e t 17 Chapter 16, Section 152, as amended) is amended to read:

w l n d 18 "22-11-29.

RETIREMENT BENEFIT OPTIONS.-- = = 19 a l A.

Upon retirement pursuant to the Educational i a e r 20 Retirement Act, a member may elect, and, except as provided in a t m m 21 Subsection D, [or] E or F of this section, such election shall d r e 22 be irrevocable, to receive the actuarial equivalent of the c e s k 23 member's retirement benefit, as provided in Section 22-11-30 e a n b 24 NMSA 1978, to be effective on the member's retirement in any u [ one of the following optional forms:

.228775.3 (1) OPTION A.

A reduced annuity payable during the member's life with provision that upon the HB 251 Page 1 member's death one-half of this same annuity shall be continued during the life of and paid to the beneficiary designated by the member in writing at the time of electing this option.

In the case of Options B and C of Subsection A of this section, the actuarial equivalent of the member's retirement benefit shall be computed on the basis of the lives of both the member and the beneficiary or in the event that a e t 17 supplemental needs trust is the designated beneficiary, the w l n d 18 life of the member and the beneficiary of that trust.

= = 19 a l C.

In the event that the named beneficiary of a i a e r 20 retired member who elected Option B or C of Subsection A of a t m m 21 this section at the time of retirement predeceases the retired d r e 22 member or the supplemental needs trust terminates while the c e s k 23 retired member is living, the annuity of the retired member e a n b 24 shall be adjusted by adding an amount equal to the amount by u [ which the annuity of the retired member was reduced at .228775.3 - 2 - retirement as a result of the election of Option B or C of Subsection A of this section.

(1) beginning on the first month following the month in which the named beneficiary of a retiree dies or the beneficiary of a supplemental needs trust that is the named beneficiary dies or that trust otherwise terminates HB 251 Page 2 applicable to an annuity received by a retiree who retires after June 30, 1987;

A retired member who is being paid an adjusted annuity pursuant to Subsection C of this section because of the death of the named beneficiary or the death of the beneficiary e t 17 of a supplemental needs trust or the termination of that trust w l n d 18 may exercise a one-time irrevocable option to designate another = = 19 a l beneficiary and may select either Option B or Option C of i a e r 20 Subsection A of this section;

a t m m 21 (1) the amount of the annuity under the option d r e 22 selected shall be recalculated and have the same actuarial c e s k 23 present value, computed on the effective date of the e a n b 24 designation, as the annuity being paid to the retired member u [ prior to the designation;

.228775.3 - 3 - (2) the designation and the amount of the annuity shall be subject to a court order as provided for in Subsection B of Section 22-11-42 NMSA 1978;

A retired member who is being paid an annuity HB 251 Page 3 under Option B or C of Subsection A of this section with a living or operating designated beneficiary other than the retired member's spouse or former spouse or the supplemental needs trust of the retired member's spouse or former spouse may exercise a one-time irrevocable option to deselect the designated beneficiary and elect to:

(a) the retired member shall not have an e t 17 option to change from the current form of payment;

w l n d 18 (b) the amount of the annuity under the = = 19 a l form of payment shall be recalculated and shall have the same i a e r 20 actuarial present value, computed [as of] on the effective date a t m m 21 of the designation, as the amount of annuity paid prior to the d r e 22 designation;

and c e s k 23 (c) the retired member shall pay one e a n b 24 hundred dollars ($100) to the board to defray the cost of u [ determining the new annuity amount;

or .228775.3 - 4 - (2) have future annuity payments made without a reduction as a result of Option B or C of Subsection A of this section.

A retired member who is being paid an annuity under Option B or C of Subsection A of this section with the member's spouse as the designated beneficiary may exercise a one-time irrevocable option to deselect the designated HB 251 Page 4 beneficiary and elect to:

(b) the amount of the annuity under the form of payment shall be recalculated and shall have the same actuarial present value, computed as of the effective date of the designation, as the amount of annuity paid prior to the e t 17 designation;

w l n d 18 (c) the retired member's spouse provides = = 19 a l a notarized, written statement expressing the spouse's consent i a e r 20 to relinquish the designation as a beneficiary;

and a t m m 21 (d) the retired member shall pay one d r e 22 hundred dollars ($100) to the board to defray the cost of c e s k 23 determining the new annuity amount;

e a n b 24 (2) have the future annuity payments made u [ without a reduction as a result of Option B or C of Subsection .228775.3 - 5 - A of this section;

HB 251 Page 5 (4) upon becoming divorced from the named spouse, exercise a one-time irrevocable option to designate another beneficiary;

e t 17 (c) the designation and the amount of w l n d 18 the annuity shall be subject to a court order as provided for = = 19 a l in Subsection B of Section 22-11-42 NMSA 1978;

and i a e r 20 (d) the retired member shall pay one a t m m 21 hundred dollars ($100) to the board to defray the cost of d r e 22 determining the new annuity amount;

or c e s k 23 (5) have the future annuity payments made e a n b 24 without a reduction as a result of Option B or C of Subsection u [ A of this section.

.228775.3 - 6 - [F.] G.

In the event of the death of the member who has not retired and who has completed at least five years' earned service credit, the member shall be considered as retiring on the first day of the month following the date of death, and the benefits due the surviving beneficiary, computed [as of] on that date, shall, except as provided in Subsection [J] K of this HB 251 Page 6 section, be commenced effective on the first day of such month in accordance with the terms of Option B of Subsection A of this section.

If the e t 17 benefit is thus deferred, it shall be calculated as though the w l n d 18 member had retired on the first day of the month in which the = = 19 a l beneficiary elects to receive the benefit.

In the event of the i a e r 20 death of the beneficiary or in the event that a supplemental a t m m 21 needs trust is the designated survivor beneficiary, the d r e 22 termination of that trust or the death of the beneficiary of c e s k 23 that trust after the death of the member and prior to the date e a n b 24 on which the beneficiary has elected to receive the u [ beneficiary's benefit, the estate of the beneficiary shall be .228775.3 - 7 - entitled to a refund of the member's contributions plus interest at the rate earned by the fund during the preceding fiscal year, reduced by the sum of any disability benefits previously received by the member.

[G.] H.

In the event of the death of a member who has not retired and who has completed at least five years' earned HB 251 Page 7 service credit, but who has not designated a beneficiary in writing pursuant to the Educational Retirement Act, the eligible surviving spouse or surviving domestic partner shall be the surviving beneficiary eligible for benefits in accordance with the provisions of Subsection [F] G of this section.

[H.] I.