All Roll Calls
Yes: 98 • No: 0
New MexicoSB 752025 Regular SessionSenateWALLET
EDUCATIONAL RETIREMENT CHANGES
Sponsored By: Natalie Figueroa (Democratic)
Signed by Governor
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Bill Overview
Analyzed Economic Effects
5 provisions identified: 2 benefits, 0 costs, 3 mixed.
School workers face five-year retirement minimum
New Mexico educational retirement members generally need five years of employment with retirement contributions to qualify for benefits. Members retiring sooner cannot receive more than the maximum benefit available under the law replaced by the Educational Retirement Act. Members can buy up to five contributory years, but those years do not count as additional service when calculating benefits. Each year costs the combined worker and employer contribution rates at purchase, applied to the member’s five-year average annual salary. That average uses the last five years of employment. Board-set interest runs from the act’s effective date and cannot exceed 3% yearly. The five-year rule requires contributions through the last business day of the 60th month, or the contract’s final service day. For benefits calculated before July 1, 1959, purchased years are valued using the amount paid.
School retirees get funding-based yearly increases
Beginning July 1, 2013, yearly educational retirement benefit increases depend on inflation and the retirement fund’s finances. When the fund is at least 100% funded, the formula uses inflation below 2%, or half of inflation otherwise. The resulting increase has a 2% floor and a 4% cap. Above 90% but below 100% funding, increases are 95% or 90% of the full-funding amount. At 90% funding or less, they are 90% or 80% of that amount. The rate depends on whether service totals at least 25 years and whether benefits exceed the median adjusted benefit. Benefits do not fall when inflation falls. Most adjustments start the July 1 after age 65, or age 67 under another retirement rule, but never before the year after retirement. Disability adjustments start July 1 of the third full year after the year of board approval. Certain disability recipients and retirees are exempt from the lower-funding reductions. Disability recipients already receiving adjustments at age 60 keep the disability adjustment rate.
School workers can buy prior service credit
Educational retirement members can receive free credit for listed federal education work in New Mexico before July 1, 1967. Military service interrupting New Mexico work also counts without payment after honorable discharge and return to New Mexico employment within 18 months. Buying other military or Public Health Service commissioned service requires honorable discharge and five years of contributory New Mexico employment. Each purchased year costs the prior five-year average actual salary times the combined worker and employer contribution rates at election. Full payment is due within 90 days after notice of the price. The employer share is not refundable if the member later withdraws contributions. Other purchases cover listed education work in other states or territories, military dependents’ schools, federal programs, and approved New Mexico private schools or colleges. Starting July 1, 2001, these purchases require current employment with a participating local employer and payment of the credit’s actuarial value. That is the value calculated under board rules. Credit limits are five years for individual categories and specified combinations, and generally ten years for other combinations. Members buying credit under specified categories who join the Retiree Health Care Authority must also make required contributions to that authority.
School retirement records get privacy protections
The retirement board, its workers, and contractors generally cannot release members’ or retirees’ protected information to the public. The law keeps exceptions for specified employment, service, salary, benefit, and contribution data. Members, spouses, authorized representatives, and people named in a prior consent can receive information through the law’s exceptions. Listed state agencies can receive information about employer contributions, payments, money management, or financial controls. The Public Employees Retirement Board can receive information to administer retirement reciprocity. Recipients cannot improperly share protected information further unless a confidentiality agreement, board rule, or state law permits it. Knowing violations are petty misdemeanors.
School retirement funds get dedicated accounts
The law creates a main educational retirement fund and a separate account for money recovered through private attorneys. The state treasurer holds the funds, and the retirement board serves as trustee. The main fund receives member fees, worker and employer contributions, investments, unclaimed contributions, interest, gifts, grants, and board-directed amounts. Money recovered through private attorneys first enters the separate account. The board pays contracted attorney fees and reasonable costs from that account, then transfers the balance to the main retirement fund.
Sponsors & Cosponsors
Sponsor
Natalie Figueroa
Democratic • Senate
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
House vote • 3/15/2025
Final House Vote
Yes: 64 • No: 0
Senate vote • 2/13/2025
Final Senate Vote
Yes: 34 • No: 0
Actions Timeline
Signed by Governor - Chapter 6 - Mar. 20
3/20/2025SenatePassed in the House of Representatives - Y:64 N:0
3/15/2025HouseHGEIC: Reported by committee with Do Pass recommendation
3/12/2025HouseHEC: Reported by committee with Do Pass recommendation
3/1/2025HouseSent to HEC - Referrals: HEC/HGEIC
2/21/2025SenatePassed in the Senate - Y:34 N:0
2/13/2025SenateSFC: Reported by committee with Do Pass recommendation
2/11/2025SenateSEC: Reported by committee with Do Pass recommendation with amendment(s)
2/3/2025SenateSent to SEC - Referrals: SEC/SFC
1/22/2025Senate
Bill Text
Final Version
3/20/2025
HGEIC Committee Report 3/12/25
3/12/2025
HEC Committee Report 3/01/25
3/1/2025
SFC Committee Report 2/11/25
2/11/2025
SEC Committee Report 2/03/25
2/3/2025
Introduced
1/22/2025