New Mexico
Register / Volume XXX, Issue 15 / August 13, 2019
NOTICE OF PUBLIC RULE HEARING
The New Mexico Educational Retirement
Board (NMERB) will hold a public board meeting and rule hearing on October 18, 2019
at 9:00 a.m. The rule hearing will be conducted during NMERB’s regular public
board meeting and will be held at the NMERB office located at 8500 Menaul Blvd. NE, Suite A-319, Albuquerque,
NM 87112. The purpose of the rule hearing is to consider proposed amendments to
the following rules:
Proposed Rule Amendments:
2.82.2.9 NMAC - Regular
Members
2.82.2.11 NMAC - Employees
Excluded from Coverage
2.82.3.8 NMAC - Salary
Covered; Salary Excluded
2.82.3.9 NMAC - Refunds of
Contributions
2.82.3.10 NMAC - Refunds
of Contributions in the Event of Death of Member or Beneficiary
2.82.3.12 NMAC - Purchase
of Non-Reported Service; Failure to Deduct Member Contributions
2.82.4.8 NMAC - Earned
Service Credit
2.82.4.10 NMAC - Return to
Work
2.82.5.10 NMAC - Computation
and Commencement of Retirement Benefits
2.82.5.11 NMAC - Effective
Date of Benefit
2.82.5.13 NMAC - Options
2.82.5.15 NMAC - Return to
Work Program
2.82.5.16 NMAC - Return to
Work .25 FTE or Less
Details for Obtaining a Copy of Proposed Rule Changes and
Submitting Oral or Written Comments
To obtain a copy of the
proposed rule changes, please go to the NMERB website at www.nmerb.org or visit
the NMERB office located at 701 Camino de los
Marquez, Santa Fe, NM 87505, or call Amanda Olsen, Paralegal, at (505)
476-6133.
Interested individuals may
provide comments at the public hearing and/or submit written comments to Amanda
Olsen, Paralegal, via email at rule.change@state.nm.us or by fax, attention Amanda
Olsen, at (505) 827-1855, or by regular mail to Amanda Olsen – rule change,
NMERB, 701 Camino de los Marquez, Santa Fe, NM 87505.
Written comments must be received no later than 5:00 pm October 15, 2019. All
written public comments will be posted on the NMERB website at www.nmerb.org.
Statutory
Authority: Legal authority for this
rulemaking can be found in the Educational Retirement Act, NMSA 1978 Sections
22-11-1 through 22-11-55 (Act) which, among other provisions, specifically
authorizes the Board of Trustees of the Educational Retirement Board to adopt
regulations pursuant to the Act. Section 22-11-6(A)(5)
NMSA 1978.
Purpose:
The purpose of the
majority of the proposed rule amendments is to bring the rules into conformity
with amendments to the Educational Retirement Act resulting from the passage of
House Bill 360 (H.B 360) and Senate Bill 664 (S.B. 664), 54th Leg., 1st Sess.
(N.M. 2019). Other proposed amendments are necessary for purposes of clarity,
to correct confusing or ungrammatical language, to make language gender neutral
or as described under each rule section below.
Summary of Proposed Changes:
2.82.2.9 NMAC - Regular Members
H.B. 360 eliminated the
$15,000 earnings limit for retirees working under the NMERB program formerly
known as the “return to work exception”. Subsections A, B, C and D are amended
to delete the phrase “return to work exception” as it no longer accurately
describes retirees who work .25 full time equivalency (FTE) or less. Subsection
D is also amended to delete the word “participants” and insert the phrase
“retired members working…” because the word “participants” is a defined term
under Subsection W of Section 22-11-2 NMSA 1978 that refers to individuals who
participate in the Alternative Retirement Plan.
2.82.2.11 NMAC - Employees Excluded from Coverage
Subsection B is amended to
provide that beginning July 1, 2020, retired members working .25 FTE or less
full time must make nonrefundable contributions to the fund, pursuant to H.B.
360. Subsection F is a new provision which provides that police officers who
receive a pension pursuant to the Public Employees Retirement Act (PERA) and
were hired by a local administrative unit (LAU) prior to July 1, 2019, will be
grandfathered in and will not have to make contributions to the fund, pursuant
to H.B. 360.
2.82.3.8 NMAC - Salary Covered; Salary Excluded
Subsection A is amended to
delete language that excluded salary earned while a retiree is in the return to
work program for the purpose of contributions to the fund and computation of
benefits. The previous language conflicts with H.B. 360, which requires that
retired members working .25 FTE or less must make nonrefundable contributions
to the fund beginning July 1, 2020. See also the proposed amendment at
Subsection D of 2.82.5.10 NMAC which would exclude from a member’s annual
salary any salary earned by a retiree working in the return to work program or
the return to work .25 FTE or less program. Subsection A is also amended to
delete “$20,000” and insert “$24,000” in several locations in order to comply
with H.B. 360, which increased to $24,000 the threshold for the higher employee
contribution rate of 10.70%.
2.82.3.9 - Refunds of Contributions
Subsection B is amended to
add language providing that contributions made to the fund after July 1, 2019
by PERA retirees are nonrefundable.
2.82.3.10 - Refunds of Contributions in the Event of
Death of Member or Beneficiary
Subsection B is amended to
add language providing that a surviving spouse or domestic partner will be considered
a beneficiary if no beneficiary has been named, in accordance with S.B. 664.
Subsection E is a new provision that lists the documents NMERB may accept as
proof that a person is the domestic partner of the member.
2.82.3.12 - Purchase of Non-Reported Service; Failure
to Deduct Member Contributions
Subsection A is amended to
delete “$20,000” and insert “$24,000” as the salary threshold for the purpose
of determining the contribution rate for non-reported service, in accordance
with H.B. 360.
2.82.4.8 NMAC - Earned Service Credit
Adds a new provision
(Subsection J) providing that PERA retirees who are employed by an LAU do not
earn service credit unless the retiree has suspended their PERA benefit.
2.82.4.10 NMAC - Return to Work
Amends language to provide
that service credit cannot be
earned, purchased or credited for any time that a retired member is employed by
an LAU unless the retired member has suspended their benefit. Deletes the
reference to the return to work program and the return to work exception and
simplifies the provision by referring to retired members working for an LAU.
Also, adds language to provide that while a retired member is employed by an
LAU, no service credit can be purchased for service previously earned or
withdrawn unless the retired member suspends their benefit.
2.82.5.10 NMAC - Computation and Commencement of
Retirement Benefits
Subsection D is amended to
clarify that salary earned by a retiree who is in the return to work program or
a retiree who works .25 FTE or less cannot be used in determining the member’s
average annual salary. Subsections E and H are amended to gender neutral
language.
2.82.5.11 NMAC - Effective Date of Benefit
Subsections A and B are
amended to gender neutral language.
2.82.5.13 NMAC - Options
Subsection F is amended to
add language to reflect that NMERB has a new form for designating
beneficiaries, known as a “beneficiary designation form” and that NMERB will
continue to accept the old form, known as “form 42.” Also adds language to Subsection
F clarifying that the beneficiary must be a human being to receive Option B
coverage. The previous language was unclear because the phrase “if a person is
not named” could be interpreted to mean that nobody was named or an entity was
named.
2.82.5.15 NMAC – Return to Work Program
Subsection A is amended to
correct a typographical error so that the rule correctly refers to Subsection F
of Section 22-11-25.1 NMSA 1978, rather than Subsection E of Section 22-11-25.1
NMSA 1978. Subsection B is amended to reflect that members who retired on or
before January 1, 2001, who subsequently suspend retirement, and who thereafter
re-retire need not complete an additional 90 day layout after re-retirement
prior to returning to work for an ERB employer. Clarifies language to specify
that the member need only complete the 12 month layout after the member’s
initial retirement, in accordance with H.B. 360. Subsection D is amended to
active voice rather than passive voice and also to clarify that a member is not
eligible for the return to work program until NMERB has approved their return
to work application. Subsection F is amended to clarify that a retired member
who has violated the provisions of the return to work program, and NMERB has
suspended their benefit, must re-apply for retirement. Subsection G is amended
to clarify that a retired member must receive approval of their return to work
application before they are considered approved for the program. Subsection H
is amended to correct grammatically incorrect language.
2.82.5.16 NMAC - Return to Work .25 FTE or Less
Prior to the enactment of
H.B. 360, retirees were allowed to work for an NMERB employer after retirement
without qualifying or applying for the return to work program, but their
earnings were limited. This was known as the “return to work exception.” Under
NMERB’s return to work exception rule, a retiree could earn the greater of
$15,000 per fiscal year or work .25 FTE. House Bill 360 eliminated the $15,000
earnings limitation. Under H.B. 360, retired members who have not completed a
12 consecutive month layout may work .25 FTE or less and there is no limitation
on their earnings. These statutory changes are effective as of July 1, 2019.
Accordingly, several changes must be made in 2.82.5.16 NMAC to comply with H.B.
360. Subsections A, B and C of the “Return to Work Exception” rule are deleted,
the name of the rule is changed to “Return to Work .25 FTE or Less, and new
Subsections A and B provide as follows:
Subsection A provides that
a retired member may return to employment (includes substitution) at .25 FTE or
less without affecting the retiree’s benefit if the retiree submits a return to
work application and is approved by NMERB prior to commencing employment.
Subsection B provides that NMERB may suspend a retiree’s benefit if the retiree
enters into an agreement for employment greater than .25 FTE or actually works
greater than .25 FTE without first completing a 12 consecutive month layout.
Also, the retiree must repay any benefits received while ineligible under the
.25 FTE or Less provision.