HB 172 PERA MEMBER TEMPORARY PAYMENT

Rep Joseph L Sanchez

Actions: [2] HLVMC/HAFC-HLVMC [3] DP-HAFC

Scheduled: Not Scheduled

 House Bill 172 (HB 172) This legislative act is related to public employee pensions in the state of New Mexico. The act outlines provisions for cost-of-living adjustments for qualified pension recipients and introduces a temporary, additional, non-compounding payment during fiscal years 2025 and 2026. The act also includes specific conditions and criteria for pension adjustments based on factors like the funded ratio and smoothed investment rate of return. 

 House Bill 172 (HB 172) Cost-of-Living Adjustments (COLA):
•	Qualified pension recipients are eligible for a cost-of-living pension adjustment.
•	The COLA calculation involves factors like the funded ratio, smoothed investment rate of return, and a cost-of-living adjustment hurdle rate.
Additional Payments (Temporary, Non-Compounding):
•	During fiscal years 2025 and 2026, qualified pension recipients shall receive an annual, non-compounding, additional payment.
•	The amount of the payment is determined each fiscal year by multiplying the amount of annual pension payments by two percent.
Certification Requirements:
•	The retirement board is required to certify the funded ratio and smoothed investment rate of return each May 1.
•	These certifications influence the cost-of-living adjustment for qualified pension recipients.
Cost-of-Living Adjustment Calculation:
•	The cost-of-living adjustment is determined based on the smoothed investment rate of return, cost-of-living adjustment hurdle rate, and the funded ratio.
•	Different conditions and limits are specified based on the funded ratio.
Special Adjustments:
•	Additional adjustments are outlined for normal retired members with specific work experience, disability retired members, and those who have attained the age of seventy-five.
Recipient's Option to Decline Increase:
•	A qualified pension recipient may decline an increase in pension by providing written notice at least thirty days prior to the effective date of the increase.
Appropriation:
•	An appropriation of sixty-three million dollars ($63,000,000) from the general fund to the public employee’s retirement association is specified to cover the cost of the temporary, additional, non-compounding payments in fiscal year 2025 and subsequent fiscal years.