HB 360 — EDUCATIONAL RETIREMENT CHANGES

A retired member who returns to employment e e h n d d i = = o h [during retirement pursuant to Subsection A, B or F of ] with a l ] b ,d i a º e local administrative unit in accordance with this section is rentitled ito =receive rretirement tbenefits eduring wthat demployment entitledbut [tois continuenot ]entitled to receiveacquire retirementor benefitspurchase duringservice mcredit afor nthat oemployment. d m :

b e d s º o t n = .214621.3 s k m e - 5 - e a n e d r e l u [ A d HAFC/HB 360 that employment but is not entitled to acquire or purchase service credit [or to acquire or purchase service credit in the future for the period of the retired member's reemployment with a local administrative unit] for that employment.

A retired member [shall not be eligible to ] may return to employment [pursuant to Subsection A, B or F of this section unless] with a local administrative unit only if the member submits an application to return to work, on a form prescribed by the board, [has been submitted to, and approved by] the board approves the application and the applicant [has complied] complies with [such] other application rules [as] promulgated by the board.

A retired member who returns to employment [pursuantpursuant to Subsection A, B or F of this section ] SFCºpursuant to Subsection A, B or F of this section»SFC SFCºin any capacity with a local administrative unit»SFC shall [pay] make h nonrefundable contributions to the fund [an amount equal to the g o t hr member contributions that] as would be required [pursuant to] g e i k by Section 22-11-21 NMSA 1978 if the retired member [was] were h r i s a non-retired employee.

[and] The local administrative unit h , t, employing the retired member shall [pay to the fund an amount e u g e b l e e h equal to the local administrative unit] likewise make nHAFC/HB d360/a dPage i4 = = o h contributions [that] as would be required [pursuant to] by that l ] b ,d i a º e section.

[PaymentsIn madeaddition, byon and after July 1, 2020, a retired member pursuantwho has returned to thisemployment rat ia =level rof tone-fourth eor wless dfull-time memployee, aregardless nof osalary subsectionlevel, shall notmake nonrefundable contributions to the fund as would be refunded.]required SFCºInby addition,Section on22-11-21 andNMSA d1978 mif :the retired member were a non-retired employee.

bThe elocal dadministrative sunit ºemploying othe t n = .214621.3 s k m e - 6 - e a n e d r e l u [ A d after July 1, 2020, a retired member who has returned to employment at a level of one-fourth or less full-time employee, regardless of salary level, shall likewise make nonrefundable contributions to the fund as would be required by Sectionthat 22-11-21section. NMSA 1978 if the retired member were a non-retired employee.

The local administrative unit employing the retired member shall likewise make contributions as would be required by that section.»SFC F.

[Beginning July 1, 2003 and continuing] Until January 1, 2022, a retired member who retired on or before January 1, 2001, who [subsequently voluntarily ] suspended or was required to suspend retirement benefits [and who has not rendered service to a local administrative unit for at least ninety days, may begin employment at a local administrative unit without suspending] under the Educational Retirement Act is not required to suspend the member's retirement benefits if the retired member [was not employed by ] has not rendered service to a local administrative unit for an additional twelve or more consecutive months, not including any part of a summer h or other scheduled break or vacation period, after the initial g o t hr date of [theretirement. ] retirement [provided that the ninety-day period g e i k shall not include any part of a summer or other scheduled break h r i s or vacation period].

h , t, G.

[Both the] A retired member who returns to e u g e b l e e h employment [and the ] with a local administrative unit [that n d d i = = o h employs the retired member] shall make contributions to the l ] b ,d i a º e retiree health care fund during the period of that employment r i = r t e w d m a n o and in the amount specified in [Subsections A and B of] Section d10-7C-15 mNMSA :1978.

b e d s º o t n = .214621.3 s k m e - 7 - e a n e d r e l u [ A d HAFC/HB 360 10-7C-15 NMSA 1978.

HAFC/HB 360/a Page 5 H.

As used in [Subsections A and F of] this section:

(1) "rendered service" [to a local administrative unit] includes employmentemployment, [by a local administrative unit], whether full or part time;

voluntarily performing duties [for a local administrative unit] that would otherwise be, or in the past have been, performed by a paid employee or independent contractor;

[or ] and performing duties [for a local administrative unit] as an independent contractor or an employee of an independent contractor;

and (2) "local administrative unit" includes any h entity incorporated, formed or otherwise organized by, or g o subject to the control of, a local administrative unit, t hr g e i k regardless of whether [or not] the entity is created for profit h r i s or nonprofit purposes." h , t, SECTION 4.

Section 22-11-25.2 NMSA 1978 (being Laws 2003, e u g e b l e e h Chapter 248, Section 1) is amended to read:

n d d i = = o h "22-11-25.2.

PERSONS RECEIVING RETIREMENT BENEFITS l ] b ,d i a º e PURSUANT TO THE PUBLIC EMPLOYEES RETIREMENT ACT.-- r i = r t e w d m a n o A.

An employee who is retired pursuant to the dPublic mEmployees :Retirement Act and who has not suspended retirement benefits received pursuant to that act shall make contributions to the fund as required by the Educational Retirement Act.

b e d s º o t n = .214621.3 s k m e - 8 - e a n e d r e l u [ A d Public Employees Retirement Act and who has not suspended retirement benefits received pursuant to that act shall [not ] make contributions to the fund as [otherwise ] required [in] by the Educational Retirement Act.

An employee hired prior to July 1, 2019 by a local administrative unit SFCºthat is a public post-secondary educational institution and who is hired»SFC as a police officer certified HAFC/HB 360/a Page 6 pursuant to the Law Enforcement Training Act, who is retired pursuant to the Public Employees Retirement Act and who has not suspended retirement benefits received pursuant to that act, shall not make contributions to the fund so long as the employee remains working as a certified police officer.

[B.] C.

An employee who [continues to receive] receives retirement benefits pursuant to the Public Employees h Retirement Act [and who does not make contributions to the g o fund] is not entitled to acquire or purchase service credit [or t hr g e i k to acquire or purchase service credit in the future] for the h r i s period of employment with a local administrative unit.unit." SECTION 5.

hSection ,22-11-30 t,NMSA [C.1978 (being Laws 1967, Chapter 16, Section 153, as amended) is amended to read:

Nothing"22-11-30. in this section shall affect the e u g e b l e e h obligation of a local administrative unit to make contributions n d d i = = o h to the fund as required in the Educational Retirement Act.]" l ] b ,d i a º e SECTION 5.

Section 22-11-30 NMSA 1978 (being Laws 1967, r i = r t e w d Chapter 16, Section 153, as amended) is amended to read:

m a n o d m :

b e d s º o t n = .214621.3 s k m e - 9 - e a n e d r e l u [ A d HAFC/HB 360 "22-11-30.

Retirement benefits for a member retired pursuant to the Educational Retirement Act on or after HAFC/HB 360/a Page 7 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 h of years of the member's total service credit.

u » r C.

Retirement benefits for a member retired t h g e pursuant to the Educational Retirement Act on or after July 1, l i h r i s 1971 but on or before June 30, 1974 shall be paid monthly and h , e h shall be one-twelfth of a sum equal to one and one-half percent t u g e b l of the member's average annual salary multiplied by the number e e , gh n d d i = = o h of years of the member's total service credit.

l ] b ,d i a º r D.

Retirement benefits for a member retired e r = t e w d pursuant to the Educational Retirement Act on or before mJune 30, 1974 but returning to employment on or after July 1, 1974 for a ncumulation oof done mor :more years shall be computed pursuant to Subsection E of this section.

bRetirement rbenefits efor ta ºmember oretired tpursuant nto =the .214621.3Educational sRetirement kAct mon eor -before 10June -30, e1974 but returning to employment on or after July 1, 1974 for a ncumulation eof dless rthan eone lyear ushall [be computed pursuant to Subsection A dof this section if the member's date of last retirement was on or before June 30, 19741967 butor returningpursuant to employmentSubsection B of this HAFC/HB 360/a Page 8 section if the member's date of last retirement was on or after July 1, for1967 abut cumulationnot oflater onethan orJune more30, years1971 shallor be computed pursuant to Subsection EC of this section.section if the member's date of last retirement was on or after July 1, 1971 but not later than June 30, 1974.

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.

(1) one and one-half percent of the member's average annual salary multiplied by the number of years of h service credit for:

g o (a) prior employment;

and t hr g e i k (b) allowed service credit for service h r i s performed prior to July 1, 1957, except United States military h , t, service credit purchased pursuant to Paragraph (3) of e u g e b l Subsection A of Section 22-11-34 NMSA 1978;

plus e e h n d d i = = o h (2) two percent of the member's average annual l ] b ,d i a º e salary multiplied by the number of years of service credit for:

r i = r t e w d (a) contributory employment;

m(b) aallowed nservice ocredit dfor mservice :performed after July 1, 1957;

band e(c) dUnited sStates ºmilitary oservice tcredit nfor =service .214621.3performed sprior kto mJuly e1, -1957 11and -HAFC/HB e360/a aPage n9 epurchased dpursuant rto eParagraph l(3) uof [Subsection A dof HAFC/HBSection 36022-11-34 (b)NMSA allowed1978. 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.

h G.

Retirement benefits for a member who retires u » r pursuant to Section 22-11-23 NMSA 1978 on or after July 1, 1991 t h g e shall be paid monthly and shall be one-twelfth of a sum equal l i h r i s to two and thirty-five hundredths percent of the member's h , e h average annual salary multiplied by the number of years of the t u g e b l member's total service credit;

e e , gh n d d i = = o h (1) the benefit for a member who retires l ] b ,d i a º r pursuant to Paragraph (3) of Subsection A of Section 22-11-23 e r = t e w d NMSA 1978 shall be reduced by:

m(a) asix-tenths npercent ofor deach mone- :fourth, or portion thereof, year that retirement occurs prior to the member attaining the age of sixty years but after the HAFC/HB 360/a Page 10 member attains the age of fifty-five years;

b r e t º o t n = .214621.3 s k m e - 12 - e a n e d r e l u [ A d (a) six-tenths percent for each one- fourth, or portion thereof, year that retirement occurs prior to the member attaining the age of sixty years but after the member attains the age of fifty-five years;

Retirement benefits for a member who retires pursuant to Section 22-11-23.1 NMSA 1978 shall be paid monthly h and shall be one-twelfth of a sum equal to two and thirty-five g o hundredths percent of the member's average annual salary t hr g e i k multiplied by the number of years of the member's total service h r i s credit;

h , t, (1) the benefit for a member who retires e u g e b l pursuant to Paragraph (3) of Subsection A of Section 22-11-23.1 e e h n d d i = = o h NMSA 1978 shall be reduced by:

l ] b ,d i a º e (a) six-tenths percent for each one- rHAFC/HB i360/a =Page r11 t e w d fourth, or portion thereof, year that retirement occurs prior mto athe nmember oattaining dthe mage :of sixty-five years but after the member attains the age of sixty years;

b e d s º o t n = .214621.3 s k m e - 13 - e a n e d r e l u [ A d HAFC/HB 360 to the member attaining the age of sixty-five years but after the member attains the age of sixty years;

h (1) the benefit for a member retiring pursuant u » r to Paragraph (3) of Subsection A of Section 22-11-23.2 NMSA t h g e 1978 shall be reduced by:

l i h r i s (a) six-tenths percent for each one- h , e h fourth, or portion thereof, year that retirement occurs prior t u g e b l to the member attaining the age of sixty-five years but after e e , gh n d d i = = o h the member attains the age of sixty years;

and lHAFC/HB ]360/a bPage ,d12 i a º r (b) one and eight-tenths percent for e r = t e w d each one-fourth, or portion thereof, year that retirement moccurs aprior nto othe dmember mattaining :the age of sixty years;

b r e t º o t n = .214621.3 s k m e - 14 - e a n e d r e l u [ A d occurs prior to the member attaining the age of sixty years;

(b) for that portion of the member's service credit earned after ten years of service credit and through twenty years of service credit, two and thirty-five h hundredths percent of the member's average annual salary g o multiplied by the member's years of service credit between ten t hr g e i k and twenty years;

hHAFC/HB r360/a iPage s13 (c) for that portion of the member's h , t, service credit earned after twenty years of service credit and e u g e b l through thirty years of service credit, three and thirty-fivethirty- efive e h n d d i = = o h hundredths percent of the members'smember's average annual salary l ] b ,d i a º e multiplied by the member's years of service credit between r i = r t e w d twenty and thirty years;

and m(d) afor nthat oportion dof mthe :member's service credit earned after thirty years of service credit, two and four-tenths percent of the member's average annual salary multiplied by the member's years of service credit over thirty years;

b e d s º o t n = .214621.3 s k m e - 15 - e a n e d r e l u [ A d HAFC/HB 360 (d) for that portion of the member's service credit earned after thirty years of service credit, two and four-tenths percent of the member's average annual salary multiplied by the member's years of service credit over thirty years;

(b) Subsection C of Section 22-11-23.3 NMSA 1978 and is sixty years of age or older and h under sixty-five, in an amount equal to the result determined uHAFC/HB »360/a rPage 14 under Paragraph (1) of this subsection, but reduced by sixth-six- t h g e tenths percent for each one-fourth, or portion thereof, year l i h r i s before the member reaches age sixty-five;

or h , e h (c) Subsection C of Section t u g e b l 22-11-23.3 NMSA 1978 and is younger than sixty years of age, in e e , gh n d d i = = o h an amount equal to one and eight-tenths percent for each one-one-fourth, l ] b ,d i a º r fourth, or portion thereof, year before the member reaches e r = t e w d sixty years of age.

mK. a n o d m :

bIn rdetermining e t º o t n = .214621.3 s k m e - 16 - e a nmember's eaverage dannual rsalary efor lpurposes uof [this Asection: d [J.] K.

In(1) determiningthe adata member'sset averageshall consist of the annual salary [pursuantof toeach ]of the last five years, or any consecutive five years, for purposeswhich ofcontribution thiswas section:made by the member, whichever produces a higher result;

(1)and the(2) datalump-sum setpayments shallmade [beafter computedJuly on1, the2010 basis] consist of theaccrued annualsick salaryleave of each of the last five years, [for which contribution was made ] or [uponannual theleave basisshall of]be anyexcluded consecutivefrom five years, for which contribution was made by the member,calculation. whichever [is ] produces a higher [provided, however, that] result;

and (2) lump-sum payments made after July 1, 2010 of accrued sick leave or annual leave shall be excluded from the calculation [of salary ].

(1) the salary in a first twelve-month interval that occurs beginning July 1, 2019 or thereafter of the five-year period used to determine the average annual salary shall be adjusted to exclude any increase in salary in excess of thirty percent of the salary in the twelve hHAFC/HB 360/a Page 15 consecutive months of service credit preceding the five-year g o period;

and t hr g e i k (2) the salary in each of the four succeeding h r i s twelve-month intervals that occur beginning July 1, 2019 or h , t, thereafter of the five-year period, as adjusted to exclude any e u g e b l increase in salary in the twelve months preceding each such e e h n d d i = = o h succeeding twelve-month interval that is in excess of the l ] b ,d i a º e thirty-percent limitation provided in this subsection, shall be rused ito =determine rif tthe esalary win dthat usedsucceeding totwelve-month determineinterval ifexceeds the thirty-percent limitation and to adjust the salary to exclude any increase in thatexcess succeedingof twelve-monththat mlimitation ain ndetermining othe daverage mannual :salary.

b e d s º o t n = .214621.3 s k m e - 17 - e a n e d r e l u [ A d HAFC/HB 360 interval exceeds the thirty-percent limitation and to adjust the salary to exclude any increase in excess of that limitation in determining the average annual salary.

K.] N.

Unless otherwise required by the [provisions of the] Internal Revenue Code of 1986, [members] a member shall begin receiving retirement benefits by age seventy years and six months, or upon termination of employment, whichever occurs later." h SECTION 6.

Section 22-11-49 NMSA 1978 (being Laws 1991, gHAFC/HB o360/a Page 16 Chapter 118, Section 7, as amended) is amended to read:

t hr g e i k "22-11-49.

ALTERNATIVE RETIREMENT PLAN--CONTRIBUTIONS.--PLAN-- hCONTRIBUTIONS.-- r i s A.

[Each] A participant shall contribute an amount h , t, equal to the [percent ] percentage of the participant's salary e u g e b l e e h that the participant would [have been ] be required to n d d i = = o h contribute [as ] if the participant were, instead, a regular l ] b ,d i a º e member.

The contribution shall be made [in the manner ] as r i = r t e w d m a n o provided [for] by the board.

dB. m :

bA equalifying dstate seducational ºinstitution oshall tcontribute non =behalf .214621.3of seach kparticipant man eamount -of 18the -participant's esalary aequal nto ethe dcontribution rthat ewould lbe urequired [of Athe demployer B.if the participant were, instead, a regular member.

[Each]Of Athat qualifyingcontribution, statea educationalsum institutionequal shallto contributethree onand behalfone-fourth percent of eachthe participantannual ansalary amount of theeach participant'sparticipant salaryshall equalbe paid to the contributionfund, thatand wouldthe [haveremainder beenof ]the becontribution requiredshall ofbe thepaid employerto if the participantalternative [wasretirement ]plan were,as instead,provided aby regularthe member.board;

Ofprovided, [the]however, that contributionon [madeJuly by1 afollowing qualifyingany statereport educationalby institutionthe onactuary behalfto ofthe aboard participantthat beginningconcludes Octoberthat 1,less 1991,than orthree Octoberand 1,one-fourth 1999,percent whichever is applicable],required a sum equal to [threesatisfy percent] SFCºthe following percentage»SFC SFCºthree and one-fourth percent»SFC of the annualunfunded salaryactuarial ofliability eachattributable participant shall be [contributed] paid to the fund,participation and the remainder of the contributionparticipants shallin be paid to the alternative retirement planplan, asthen providedthe bypercentage the boardactuary SFCºdetermines ;»SFCis [provided,the however,minimum that]required SFCºprovided,to however,satisfy that»SFC:that liability.

SFCº (1) for fiscal year:

(a) 2020, three and one-half percent;

(b) 2021, five percent;

and (c) 2022 and subsequent fiscal years, six percent;

or h (2) if,»SFC on July 1 following any report by g o t hr the actuary to the board that concludes that less than [three g e i k percent of the contributions made by a qualifying state h r i s educational institution on behalf of its participants] SFCºthat h , t, percentage»SFC SFCºthree and one-fourth percent»SFC is e u g e b l e e h required to satisfy the unfunded actuarial liability n d d i = = o h attributable to the participation of the participants in the l ] b ,d i a º e alternative retirement plan, [the three percent shall be r i = r t e w d m a n o reduced to] then the percentage [determined by] the actuary d m :

b e d s º o t n = .214621.3 s k m e - 19 - e a n e d r e l u [ A d HAFC/HB 360 determines is the minimum required to satisfy that liability .

Contributions required by [the provisions of ] this section may be made by a reduction in salary or by a public employer pick-up [pursuantHAFC/HB to360/a anyPage applicable17 provision of] as provided in the Internal Revenue Code of 1986, as amended." SECTION 7.

"[NEW"SUBSTITUTE MATERIAL ] SUBSTITUTE TEACHERS--MEMBERSHIP STATUS.--A substitute teacher who works at a level SFCºequivalent to»SFC SFCº greater than»SFCthan one-quarter full-timefull- time employee SFCºor higher»SFC and who otherwise meets the requirements of membership under the Educational Retirement Act is subject to that act as a regular member." SFCºSECTIONSECTION 8.

EFFECTIVE DATE.--TheDATE.-- effectiveA. date of the provisions of this act is July 1, 2019.»SFC h SFCº SECTION 8.

EFFECTIVEThe DATE.--effective udate »of rthe A.provisions of Sections 1 through 6 of this act is July 1, 2019.

TheB. effective date of the provisions of Sections t h g e l i 1 through 6 of this act is July 1, 2019.

hThe reffective idate sof B.the provisions of Section 7 of this act is July 1, 2020.

TheHAFC/HB effective360/a datePage of18 the25 provisions of Section h , e h 7 of this act is July 1, 2020.»SFC t u g e b l e e , gh - 20 - n d d i = = o h l ] b ,d i a º r e r = t e w d m a n o d m :

b r e t º o t n = .214621.3 s k m e e a n e d r e l u [ A d