MemberHandbook

New Mexico Educational Retirement Board

Updated July 2014

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Table of ContentsWelcome Page3

GoverningAuthority Page4

Membership Page4

DefinedBenefitPlan Page5

AlternativeRetirementPlan(summary) Page6

Contributions Page6

ServiceCredit Page6

MilitaryService Page7

TerminatingEmployment Page8

RefundsandRollovers Page8

“BuyingBack”ServiceCredit Page9

RetirementEligibility:AgeandBenefits Page10

WhenToRetire Page12

CalculatingRetirementBenefits Page12

EffectiveDateofRetirement Page13

PensionPayments Page14

BenefitOptions Page14

DisabilityBenefits Page15

DeathPriortoRetirement Page16

CostofLivingAdjustment Page17

CommunityPropertyRights Page18

Taxes,OtherDeductions Page19

NewMexicoRetireeHealthCareAuthority Page19

ERA/PERAReciprocity Page20

WorkingafterRetirement Page20

IndependentContractors Page23

Non-ERAEmployment Page23

SuspendingRetirement Page24

AlternativeRetirementPlanForUniversityandCollegeFaculty Page24

ThinkingAboutRetirement? Page26

InConclusion Page27

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WelcomeWhetheryouarejuststartingoutintheclassroomorpreparingtoretireafterarewardingcareer,thisMemberHandbookisdesignedtoprovideanswerstomanyofthequestionsyoumayhaveaboutyourretirementbenefits.TheNewMexicoEducationalRetirementBoard(ERB)ischargedwithprovidingsecureretirementbenefitstoactiveandretiredemployeesofNewMexicopublicschools,institutionsofhigherlearningandcertainemployeesatstateagencieswhoworkineducationalprograms.Ourprofessionalstaffisdedicatedtoprovidingyouwiththeinformationyouneedtomakesounddecisionsaboutyourretirementduringyourcareer,andtoassistyouwithanyissuesthatariseduringyourretirement.In1925,theNewMexicoLegislaturepassedabillthatcreatedthestate’sfirstpensionplanforpublicservants.Today’sERB,adescendantofthatlandmarklegislation,managesamulti-billiondollarportfolio,servingapproximately61,000activemembers,34,000inactivemembersand40,000retirees.TheERBwebsiteatwww.nmerb.orgprovidesmemberswithgeneralinformationabouttheERBandonlineaccesstotheiraccounts.Informationaboutboardmeetings,investmentperformance,newlegislation,andretirementseminarsareupdatedfrequently.Anonlinecalculatorhelpsyouestimateretirementbenefits.WerecommendyouvisitthesiteregularlytostayinformedabouttheERBandyourbenefits.ERBmembersareourfirstpriority,andwearecommittedtoprovidingyouwithexemplarycustomerservice.Ifyoudonotfindtheansweryouarelookingforinthishandbookoronourwebsiteatwww.nmerb.org,pleasecontactus:• Send an email to ERB-memberhelp@state.nm.us, • Calltoll-free866-691-2345,or•VisitoneofourofficeswhereERBbenefitsspecialistswillassistyou.

SANTA FE701CaminodelosMarquezPostOfficeBox26129SantaFe,NewMexico87502Phone:(505)827-8030GeneralFax:(505)827-1855PayrollFax:(505)989-1330

ALBUQUERQUE6201UptownBlvd.NE,Suite204Albuquerque,NM87110Phone:(505)888-1560Fax:(505)830-2976

Please keep in mind...This member handbook is a general summary of the benefit provisions administered by the New Mexico Educational Retirement Board (ERB) and may not address all situations.

The New Mexico Legislature has the authority to make statutory changes to the Educational Retirement Act (ERA) that may affect your benefits and any decisions you make concerning your career or retirement. We make every effort to inform you of these changes in a timely way via the ERB website at www.nmerb.org.

This member handbook is not a contract and does not create any contractual obligation on the part of ERB or its Board of Trustees.

In all situations, the provisions of the Educational Retirement Act, and the rules and policies of the ERB, control and override any statements or information made in this handbook. Statements of fact or law made by ERB or any of its staff or the staff of any of its contributing employers (local administrative units) does not preclude the ERB from acting in accordance with applicable statutes, rules and policies.

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Individualswhoworkmorethan25%ofaFTEforthefollowingentitiesarecoveredbytheERB’sretirementplans:

• Publicschools(includingpubliccharterschools,i.e.,charteredbythelocalschoolboardortheNMSecretaryofPublicEducation)• Universities• Juniorandcommunitycolleges• Publictechnicalandvocationalinstitutions• NewMexicoSchoolfortheDeaf• NewMexicoSchoolfortheVisuallyHandicapped• Regionaleducationcooperatives

• NewMexicoActivitiesAssociation

• Certainemployeesatstateagenciesthatprovideaneducational program(i.e.,DepartmentofCorrections,PublicEducation Department,DepartmentofHealth,DivisionofVocational Rehabilitation,EducationalRetirementBoard).Thisappliesonly iftheemployeefillingapositionisrequiredtobeacertified educator.Otheremployeesattheseagenciesparticipateinthe PublicEmployeesRetirementAssociation(PERA)plan.

Defined Benefit PlanTheERBprovidesadefinedbenefitretirementplanfundedbycontributionsfromboththeemployeeandtheemployerforthemajorityofERBmembers.Theretirementbenefitisdeterminedbyaformulaappliedtothemember’ssalaryhistoryandyearsofqualifiedservice.TheDefinedBenefitPlan(DBP)usesthefollowingformulatodetermineyourpensionbenefit:

Average annual salary x service credit x .0235 = annual benefit TheDBPprovidesastablemonthlypensionpaymentforthelifeoftheretiree.Italsooffersmemberstwooptionstoprovidelifetimebenefitstoasurvivingbeneficiaryaftertheretiree’sdeath.TheERBDefinedBenefitPlanisadministeredasaqualifiedplanundertheInternalRevenueCode,Section401(a).Inaqualifiedplan,employeecontributionsaredeductedpre-tax;federalandstateincometaxesaredeferreduntilthememberreceivesmonthlyretirementbenefitsortheircontributionsarewithdrawn.

Governing AuthorityThe Educational Retirement Board is the statutory entity responsible for administering the New Mexico Educational Retirement Act (ERA) to provide secure retirement benefits to teachers, administrators and other employees within the state’s public school systems, institutions of higher learning and educational agencies. The ERB is administered by an Executive Director who reports to the Educational Retirement Board. The Board’s membership is made up of the Secretary of the Public Education Department, the State Treasurer, two members appointed by the Governor, one member elected by the New Mexico National Education Association, one member elected by the New Mexico Association of University Professors and one member elected by the New Mexico Association of Educational Retirees. Aprofessionalstaffofapproximately60employeesoverseestheplan’sinvestments,provideseducationandoutreachabouttheplantoERBmembers,processespensionpaymentsandrespondstoinquiriesfromactive,inactive,andretiredERBmembers.

MembershipMembershipintheERBplanisaconditionofemployment.YouautomaticallybecomeamemberoftheERBplanwhenyoubeginemploymentwithanyentitycoveredbytheERA.EmployeescoveredundertheERBplanarereferredtoas“members”andemployersarereferredtoas“localadministrativeunits.”Inthishandbook,theyarealsoreferredtoas“ERBemployers.”Asamember,contributionstowardyourretirementaredeductedfromyourearningseachpayperiod.Afterfiveyearsofserviceyouwillbecomevestedintheplan.AsanERBvestedmemberyouwillreceiveacertainpayoutatretirement,accordingtoafixedformuladependentonyoursalaryandyearsofemployment.YoumustcompleteanERBBeneficiaryDesignationForm42beforeanotaryandreturnittotheERBtoensurethatabeneficiaryisdesignatedforyouremployeecontributions.TheERBAnnualReport,availableontheERBwebsite,includesalistofallparticipatingemployers.LinkstotheERAandregulationsfollowedbytheERBcanbefoundatwww.nmerb.orgunderthetab“EducationalRetirementAct”atthetopofthehomepage.Ifyouareasubstituteteacher,intern,studentteacher,orwork25%orlessthanafulltimeequivalent(FTE)position,youarenoteligibletoparticipateintheERBplan.

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• accreditedprivateschoolorhigherlearninginstitutioninNewMexico

MemberseligibletocombinemilitaryserviceorserviceintheCommissionedCorpsofthePublicHealthServicewiththeothercategorieslisted,maypurchaseamaximumoftenyearsofservicecredit.Foradditionalinformationonmilitaryservice,pleaseseethesectionentitled“MilitaryService.”Inordertopurchaseservicecredit,fileanapplicationwithERB;yourformeremployermustverifyyouremployment.ApplicationformsareavailableontheERBwebsite.Thecosttopurchaseallowedservicecreditisbasedonanactuarialcostthatreflectsyourlengthofserviceandcurrentearnings.PleasecontacttheERBforanestimatedcosttopurchaseallowedservicecredit.Therearetwooptionsforpurchasingallowedservicecredit:

• AlumpsumpaymenttotheERB,or

• Arollover,ortransferofretirementcontributionsfromanotherretirementplan(suchasa401(a)plan,atax-shelteredannuity403(b)plan,oranIRA)toERB’sDefinedBenefitPlantotheextentallowedbytheInternalRevenueService.Arollover,ortransfer,fromanotherretirementplandirectlytotheERBplanshouldavoidadversetaxconsequencesthatmayresultfromwithdrawingthosefundsandthenpayingthemtotheERBplan.Consultwithataxadvisoronthepotentialtaxeffectsofarolloverorothertransfer.TheERBcannotprovidetaxadviceandisnotresponsibleforadversetaxeffectsoftherolloverortransfermethodchosenbyanindividual.

Military ServiceMemberswhopreviouslyservedinthemilitaryortheCommissionedCorpsofthePublicHealthServicemaypurchaseuptofiveyearsofallowedservicecreditintheERBDefinedBenefitPlan.ServicecreditforactivedutymaybepurchasedafterfiveyearsofemploymentbyanERBemployer.Thecosttothememberisthecombinedemployeeandemployercontributionsatthecurrentcontributionrates.Toqualifyforallowedservicecredit,youmusthavereceivedanhonorabledischargeandprovidetheERBwithacopyofyourDD-214.ERB is in full compliance with the federal Uniformed Services Employment and Re-Employment Rights Act (USERRA) which ensures that individuals who serve in the Armed Forces, Reserves, National Guard, or other “uniformed services” are:

Alternative Retirement PlanTheERBalsoadministerstheAlternativeRetirementPlan(ARP),adefinedcontributionretirementprogramavailabletocertainfacultyandprofessionalemployeesregularlyemployedatNewMexicouniversitiesandcolleges.Unlikeadefinedbenefitplan,retirementbenefitsinadefinedcontributionplanaredeterminedsolelybythebalanceinanindividualparticipant’saccountatretirement.Seesectionentitled“AlternativeRetirementPlanforUniversityandCollegeFaculty”foradditionalinformation.

ContributionsMembersoftheDefinedBenefitPlanandparticipantsintheAlternativeRetirementPlancontributeapercentageoftheirsalary(setbystatute)totheretirementplans.ERBemployersalsocontributetotheERBretirementplansataratesetbystatute.Pleaseseewww.nmerb.orgforcurrentemployeeandemployercontributionrates.

Earned & Allowed Service CreditEarned Service CreditMembersofERB’sDefinedBenefitPlanaccumulateservicecreditforeachcalendarquarterofemploymentbyanERBemployerandmakecontributionstothatplan.Memberswhotakeapaidsabbatical,orleaveofabsence,continuetomakecontributionsandthereforecontinuetoearnservicecredit.Memberswhotakeanunpaidsabbatical,orleaveofabsence,donotearnservicecredit.Allowed Service CreditTheERAalsoallowscertaintypesofservicecredittobepurchasedandcreditedtoanactivemember’saccumulatedyearsofservice.“Allowed”servicecreditwillbeincludedinthecomputationofretirementbenefits.Seethesectionentitled“RetirementEligibility:AgeandBenefits”foradditionalinformation.

YoumaypurchaseuptofiveyearsofservicecreditifyouhaveservedintheU.S.military,theCommissionedCorpsofthePublicHealthService,orworkedforanyofthefollowinginstitutions:

• PublicschoolorhigherlearninginstitutionanywhereintheUS

• U.S.Militarydependents’school

• federaleducationalprograminNewMexico

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RefundedcontributionsmaybedirectlyrolledoverintoanIRA,orotherqualifiedplan,withoutpenalty.Iftherefundisnottransferreddirectlytoanotherqualifiedretirementplan,itissubjecttofederalincometaxanda10%penaltyforearlywithdrawal.ERBisrequiredtowithhold20%ofthetotalpayment,includinginterest,forincometaxes.Consultwithyourtaxadvisorbeforerequestingarefundortransferringcontributionstoanotherqualifiedretirementplan.ERBcannotoffertaxadviceandisnotliableforthetaxconsequencesofarefundorrollover.Ifamemberdiespriortoretirement,contributionsarerefundedtohisorherbeneficiarywithinterest.Ifaretiredmemberwhooptednottoelectsurvivorbenefits(i.e.,ifthememberchoseOptionA“StraightLife”Benefit)diesbeforehisorhercontributionshavebeenpaidout,thebeneficiarywillreceivearefundfortheremainderofhisorhercontributionsattheinterestrateestablishedbyERB.Ifthebeneficiaryisundertheageof18,paymentwillnotbemadeuntiltheminorhasreachedage18oruntilthecourtappointsaguardianoftheminor’sestate.IfyouhavetakenarefundbutwishtoreinstatecreditforyourcontributionstotheDefinedBenefitPlan,youmaypaytheEducationalRetirementBoardthewithdrawnamountplusinterestfortheperiodduringwhichthefundswerewithdrawn.ChecktheERBwebsiteforthecurrentinterestrate.IfyoureceivedarefundofyourcontributionsandhavenoservicecreditasofJuly1,2010,anddecideyouwanttoreinstatecreditforyourcontributionstotheDefinedBenefitPlan,youwillbesubjecttothenewretirementeligibilityrules.Foracompletediscussionofthenewrules,pleasesee“RetirementEligibility:AgeandBenefits”.Youmaynotrequestarefundaftertheeffectivedateofyourretirement.

“Buying Back” Service CreditIfyouhavewithdrawnyourcontributionsfromERB’sDefinedBenefitPlan,youhavetherightto“buyback”yearsofservicecredituptotheamountwithdrawnplusinterestatthecurrentratesetbyERB.Thisappliestobothactiveandinactivemembers;however,youmaynot“buyback”servicecreditafteryouhaveretired.

Therearetwooptionstobuybackservicecredit:• lumpsumpayment,includinginterest,totheERBtobuybackallorpartofyourwithdrawnservice,or

• rolloverortransferfromanotherretirementplan,includinga401(a)plan,atax-shelteredannuity403(b)plan,oranIRA,tothe

extentallowedbytheIRS.Ifamemberdecidestowithdrawcontributionsagainordiespriortoretire-ment,interestthememberpaidonrestoredcontributionsisnotrefundable.

• not disadvantaged in civilian careers because of their service, • promptly reemployed in civilian jobs upon return from duty, and• not discriminated against in employment based on past, present, or future military service.

If you are employed by an ERB employer and engage in US Military Service that interrupts your employment, including being called to active duty while in the National Guard or Reserves, your pension rights under the ERB Defined Benefit Plan are preserved under the terms of USERRA. This means that for the purposes of service credit, you will be treated as if you had no break in employment with the ERB employer. To receive this allowed service credit, you must return to that employment within eighteen months following honorable discharge. While you are on active duty, neither you, nor your ERB employer, makes contributions to the plan. This “free military” period relieves you from making contributions while you are away from your civilian career.

Terminating EmploymentIf you terminate employment with an ERB employer, you may leave your contributions in the ERB plan. If you resume working for an ERB employer at a later time, you will resume adding to your existing service credit and contributions. IfyouterminateemploymentwithanERBemployerandarevested(youhavefiveyearsofearnedservicecredit),youmayapplyforretirementwhenyousatisfyoneoftheretirementeligibilityrules.

Refunds and RolloversIfyouterminateyouremploymentwithanERBemployerpriortoretirement,youareentitledtorequestawithdrawalofyourmembercontributions.Ifyouopttowithdrawyourmembercontributions,youmustwithdrawtheentireamount.TheRequestforRefundand/orRolloverformisavailableontheERBwebsite.Ifyouarerequestingyourfundswithin90daysoftermination,youremployermustcertifythatyouarenolongerworking.Employercontributionsbasedonyourearningsarenotrefundable.

MemberswhochoosetowithdrawtheircontributionsfromtheERBplanreceivealumpsumpaymentplusinterest.TheinterestrateisbasedonthefiveyearTreasuryNoterateasofMarch31ofeachyear.ChecktheERBwebsiteatwww.nmerb.orgforthecurrentrate.ERBdoesnotpayinterestoncontributionspaidinpriortoJuly1,1971.

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2.“Ruleof80”–Yourage+earnedservicecredits=80ormore.AsintheRuleof75,allowedservicecreditsareusedtocalculateyourretirementbenefitbutdonotcounttowardeligibility.Ifretireunderthisrule,areunderage65,andhavelessthan30yearsofearnedservicecredit,yourretirementbenefitwillbereducedby:

• 0.6%foreach¼year,orportionthereof,thatretirementoccurspriortoage65butafterthe60thbirthday(equalto2.4%peryear),plus

• 1.8%foreach¼year,orportionthereof,thattheretirementoccurspriortoage60(equalto7.2%peryear).

3.“67and5”–Ifyouareatleast67yearsoldandhavefiveormoreyearsofearnedservicecredit,youareeligibleforretirement.

4.COLAbeginsatage65.

TIER 3: Membership Beginning on or after July 1, 2013 If your ERB membership began on or after July 1, 2013, or you were employed before July 1, 2013, terminated your employment and subsequently withdrew all of your contributions and returned to work for an ERB employer on or after July 1, 2013, you must meet one of the following requirements to be eligible for retirement:1.“30andOut”–Earnedservicecredits=30ormoreyears.Soft

minimumretirementageof55:thosewhoretireyoungerthanage55with30yearsofservicecreditwillhaveareductioninbenefitstotheactuarialequivalentofthememberretiringatage55.UnderTier3“30andOut,”allowedservicecreditisnotusedtodetermineeligibilityforretirementbutisusedtocalculateretirementbenefits.

2.“Ruleof80”–Yourage+earnedservicecredits=80ormore.AsintheRuleof75,allowedservicecreditsareusedtocalculateyourretirementbenefitbutdonotcounttowardeligibility.Ifyouretireunderthisrule,areunderage65,andhavelessthan30yearsofearnedservicecredit,yourretirementbenefitwillbereducedby:

• 0.6%foreach¼year,orportionthereof,thatretirementoccurspriortothemember’s65thbirthdaybutafterthe60thbirthday(equalto2.4%peryear),plus

• 1.8%foreach¼year,orportionthereof,thatretirementoccurspriortothemember’s60thbirthday(equalto7.2%peryear).

3. “67and5”–Ifyouareatleast67yearsoldandhavefiveormoreyearsofearnedservicecredit,youareeligibleforretirement.

4. COLAbeginsatage67.Whenyouhavemettheeligibilityrequirementsandarereadytoretire,completetheRetirement Applicationfoundatwww.nmerb.org.We

Retirement Eligibility: Age and BenefitsWhen am I vested?VestingmeansyouhaveearnedfiveormoreyearsofservicecreditwiththeERB.ServicecreditwiththePublicEmployeesRetirementAssociation(PERA)doesnotcounttowardvestingintheERBplan.Ifyouarevested,butterminateemploymentbeforequalifyingforretirement,youmayleaveyouraccumulatedmembercontributionswithERBandreceiveapensionwhenyousatisfyretirementeligibilityrequirements.

Retirement eligibility is determined by your start date. TIER 1: Membership Prior to July 1, 2010 IfyourERBmembershipbeganbeforeJuly1,2010,andyouhavenotwithdrawnallofyourcontributions,youareeligibletoretireontheearliestdateyoumeetanyofthefollowingcriteria:

1.“25andOut”–Earnedservicecredits+allowedservicecredits=25ormoreyears.Thereisnominimumagerequirement.

2.“Ruleof75”–Yourage+earnedservicecredits=75ormore.UndertheRuleof75,allowedservicecreditsareusedtocalculateyourretirementbenefitbutdonotcounttowardeligibility.Ifyouretireunderthisrule,areunderage60,andhavelessthan25yearsofearnedservicecredit,yourretirementbenefitwillbereducedby:

•0.6%foreach¼year,orportionthereof,thatretirementoccurspriortoage60butafterthe55thbirthday(equalto2.4%peryear),plus

•1.8%foreach¼year,orportionthereof,thatretirementoccurspriortoage55(equalto7.2%foreachyearunderage55).Forexample,ifyouaresixmonthspastyour59thbirthday,thereductioninbenefitsis1.2%.

3.“65and5”–Ifyouareatleast65yearsoldandhavefiveormoreyearsofearnedservicecredit,youareeligibleforretirement.

4.COLAbeginsatage65.

TIER 2: Membership on or after July 1, 2010, but prior to July 1, 2013 IfyourERBmembershipbeganonorafterJuly1,2010,butpriortoJuly1,2013,oryouwereemployedbeforeJuly1,2010,terminatedyouremploymentandsubsequentlywithdrewallofyourcontributionsandreturnedtoworkforanERBemployeronorafterJuly1,2010,youmustmeetoneofthefollowingrequirementstobeeligibleforretirement:

1.“30andOut”–Earnedservicecredits=30ormoreyears.Thereisnominimumagerequired.UnderTier2“30andOut,”allowedservicecreditisnotusedtodetermineeligibilityforretirementbutisusedtocalculateretirementbenefits.

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two years prior to your expected retirement date to make sure that your accumulated service credit information and salary history are accurate.

Remember, the age at which you retire can affect the benefits that you will receive. See “Retirement Eligibility: Age and Benefits.”

UnderNewMexicolaw,benefitsearnedundertheEducationalRetirementActarecommunityproperty.Assuch,benefitsmaybesubjecttoadivisionduetoalegalseparationoradivorce.Seethesectionentitled“CommunityPropertyRights.”

Effective Date of RetirementTheeffectivedateofyourretirementisthefirstdayofthemonthfollowingthelastmonthinwhichyouearnedasalary.Forexample,ifyouworkedthroughJuly15,yourretirementdateisAugust1.However,youmustsubmityourretirementapplicationtoERBbythelastdayofthemonthpriortoyourretirementdate.IfyouplanonretiringasofAugust1,youmustsubmityourapplicationbyJuly31.IfyourapplicationisreceivedbyERBafterJuly31,youreffectiveretirementdateisSeptember1.Theonlyexceptiontothisruleisifyouareemployedonanineortenmonthcontractbasedontheacademicschoolyear.Inthatcase,youreffectiveretirementdateissetbystatestatuteasJuly1ifyouterminateyouremploymentinMay.IfyouareplanningaJuly1effectiveretirementdate,youshouldsubmityourretirementapplicationinJanuarytoensurenointerruptioninincome.

Itisimportanttocompleteallrequiredpaperworkwellinadvanceofsubmittingtheactualapplicationtoretire.Anearlystartwillhelptheprocessgosmoothly.

Ifyoumissadeadline,yourapplicationwillbecancelledandyoumustbegintheprocessagain.

recommendthatyoubeginthisprocess60-90dayspriortoyourplannedretirementdateinordertoavoidanyinterruptioninyourincome.IfyouplantoretireinJuly,ERBsuggestsyoustarttheprocesssixmonthspriortoyourretirementdate.IfyouarestillemployedbyanERBemployer,youremployermustsubmityourRetirement ApplicationtoERBalongwiththeEmployer Certification.IfyouhavenotworkedforanERBemployerwithinthelastsixmonths,youonlyneedtocompletetheMember InformationpageoftheRetirement Application.

When to RetireRetirement is a big decision, and there are many factors to consider – practical, personal and, of course, financial – as you plan for a secure retirement. Just because you have met the eligibility requirements does not mean you must retire. Your decision should be based on your individual circumstances. As you weigh your options, we suggest that you consider not only your ERB pension but also any Social Security benefits and other sources of income you are entitled to, as well as factors like inflation, health care costs, and other expenses you may face. SocialSecurityincludesretirement,disabilityandsurvivorbenefits.InordertoreceiveSocialSecuritybenefits,youmustfileanapplicationwiththeSocialSecurityAdministrationatwww.ssa.gov,bytelephoneat(800)772-1213,orbymakinganappointmenttovisitanySocialSecurityoffice.

Calculating Retirement BenefitsBenefitsarebasedonthreecomponents–youraverageannualsalary(sometimesreferredtoasyourfinalaveragesalaryor“FAS”)annualizedbyfiscalyear,yourearnedandallowedservicecredit,anda2.35%factor.

Average Annual Salary x service credit x .0235 = annual benefit Youraverageannualsalaryisthehigherof:1.Youraverageannualearningsforthelast20calendarquarters(60months)priortoretirement,or2.Yourhighestaveragefiscalannualearningsforany20consecutivecalendarquarters.The ERB Benefits Calculator – available on the ERB website at www.nmerb.org – may be used to calculate an “unofficial” estimate of your annual and monthly retirement benefits. Note that the online calculator does not annualize earnings; it only provides an “unofficial” estimate of your retirement benefit. For an official estimate, including annualized earnings, please contact ERB. We recommend that members contact ERB

Retirement Timeline July 1

Retirees

Step 1 Complete Section 1 of your application for retirement and give the form to your employer to complete Section 2.

January

Step 2 Your employer mails the completed application to ERB. ERB audits your application and mails you a retirement packet that includes: 1.

Post-Retirement Information and Instruction Sheet 2. Final Selection of Benefit Form 3. Estimate of Retirement Benefit 4. Authorization Agreement for Direct Deposit Services 5. State and Federal Tax

Deduction Form 6. Post-Retirement Employment Notice

February/March

Step 3 You complete the Final Selection of Benefit, Direct Deposit

Authorization, State and Federal Tax Deduction and Post Retirement Employment Notice forms and return them to ERB.

April

Step 4 The ERB places you on its benefit payroll. July

Step 5 Your first benefit payment is sent on the last working day of the

month.

July

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BecausebothOptionsBandCprovideforpaymentstoyourbeneficiaryafteryourdeath,statestatuterequiresthatyourbenefitamountbereducedbasedonactuarialdatatoensuretotalpaymentsoverthelifeofthebenefitarethesameastheywouldbeundertheOptionA“StraightLife”Benefit.InOptionBorC,youarechoosingalifetimebenefitforthebeneficiaryintheeventheorsheoutlivesyou.The“premium”forthisprotectionisareducedbenefitduringyourlifetime.PleasespeaktoanERBbenefitspecialistifyouhavequestionsaboutyouroptionsorwouldliketoreceivebenefitestimatesforeachoption.NotifyERBimmediatelyofamember’sorabeneficiary’sdeath.Makesurefamilymembersareawareofthisimportantobligation.

Changing Beneficiaries.ERBretireesreceivingpensionbenefitsundereitherOptionBorCwhohavealivingdesignatedbeneficiary,otherthanacurrentorformerspouse,willhavetheoptiontoexerciseaone-timeirrevocableoptiontodeselectthatbeneficiaryanddesignateanotherbeneficiaryortoreceivefuturepensionbenefitsunderOptionApursuant to Section 22-11-29(E) NMSA 1978. Thereisa$100processingfeetonameanewbeneficiaryinthisspecificmanner.ThenewbeneficiarydesignationandtheamountofthepensionbenefitwillbesubjecttocourtordersregardingdivisionofcommunitypropertyandchildsupportobligationsprovidedforinSection22-11-42(B)NMSA1978.

Disability BenefitsYoumaybeeligiblefordisabilitybenefitsunderERB’sDefinedBenefitPlanif:

•youhaveaccumulatedtenormoreyearsofearnedservicecredit,

•youaretotallydisabledandunabletocontinueyouremployment,and

•youareunabletoobtainandretainothergainfulemploymentcommensuratewithyoureducation,background,andexperience.

Inordertoqualifyfordisabilitybenefits,fileaDisabilityApplicationwiththeERB,includingafulldescriptionofthedisability(diagnosisandprognosis)byyourphysician(s).YoumayberequiredtoundergoamedicalexaminationbyphysiciansappointedbytheERB.TheexamitselfwouldbepaidforbyERB;however,youwouldberesponsiblefortransportationandothercostsassociatedwiththisexam.Youmayfileadisabilitybenefitsapplicationpriortotheterminationofyouremployment.Ifyouarefoundtobedisabled,theeffectivedate

Pension PaymentsPensionbenefitsarepaidtoretireesonthelastbusinessdayofthemonthviadirectdepositintoyouraccountatyourbankorqualifiedcreditunion.Fornewretirees,theretirementbenefitamountduringthefirstsixmonthsmaybeestimated.ThebenefitamountmayberecalculatedonceyouractualfinalearningshavebeenreportedbyyourERBemployer.

Benefit OptionsWhenyouretire,youmustchooseoneofthreebeneficiarypaymentoptions.Yourchoiceisirrevocable;itmaynotbechangedafteryouretireandarereceivingretirementbenefits.Therearetwoexceptionsscenarioslistedattheendofthissection.Option A “Straight Life” Benefit.Ifyouselectthisoption,yourmonthlybenefitisthefullamountdueyouunderthe“FAS x service credit x .0235” formula.OptionAisalifeonlyannuity;yourpensionpaymentsenduponyourdeath.Thereisnomonthlysurvivorbenefitunderthisoption.However,yourbeneficiaryorestatewillreceivethebalanceofyourcontributionstotheplaniftheyhavenotbeenfullydistributedtoyouinretirementbenefitspriortoyourdeath.Generally,retireecontributionsarepaidoutwithinthreetofiveyearsafterretirementstarts.Option B “Joint 100% Survivor” Benefit.UnderOptionB,yourmonthlybenefitisreducedtoprovideadesignatedbeneficiarywitha100%survivor’sbenefitfortheremainderofhisorherlife.Themonthlybenefitisbasedonyourageandyourbeneficiary’sageatthetimeofyourretirement.Youbeneficiarymaynotbeanon-spousewhoismorethantenyearsyoungerthanyou.Ifyourbeneficiarydiesbeforeyou,the“popup”featureincreasesyourmonthlybenefittotheamountyouwouldhavereceivedunderOptionA“StraightLife”Benefit.

Option C “Joint 50% Survivor” Benefit.UnderOptionC,yourmonthlybenefitisreducedtoprovideadesignatedbeneficiarywitha50%survivor’sbenefitfortherestofhisorherlife.LikeOptionB,ifyourbeneficiarydiesbeforeyou,the“popup”featureincreasesyourmonthlybenefittotheamountyouwouldhavereceivedundertheOptionA“StraightLife”Benefit.IfyouselectOptionBorC,youmaynameonlyonebeneficiaryandyourbeneficiarymustbeaperson.Youmaynotnameatrustorotherentityasthebeneficiary.Priortoretirement,youmaychangeyourbeneficiaryatanytime.KeeptheinformationaboutyourdesignatedbeneficiarycurrentonyourERBaccount.

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yearsofearnedservice,thesurvivorbenefitisreducedby2.4%foreachfullyearunderage60(0.6%foreach¼yearorportionthereof)and7.2%(1.8%foreach¼yearorportionthereof)foreachyearunderage55:(5 years x 2.4%) + (13 years x 7.2%) = 12% + 93.6%, or 105.6% penalty

Thedeductionexceeds100%sothebeneficiaryreceivesnopayment.Ifthebeneficiarywaitsuntilthedeceasedmember’s50thbirthday:

(5 years x 2.4%) + (5 years x 7.2%) = 12% + 36%, or 48% penalty Ifthebeneficiarydeferspaymentuntilthedeceasedmember’s60thbirthday,thereisnopenalty,andthemonthlybenefitisbasedonthe“FAS x years of service credit x .0235” formula.Whenamemberdieshisorherbeneficiaryhastherighttowithdrawthedeceasedmember’scontributionsplusinterestinalumpsumpaymentinlieuofamonthlypayment.IfanERBmemberchoosesnottoparticipateinOptionBanddiespriortoretirement,hisorherbeneficiary,orestate,willreceivethemember’scontributionsplusinterest.

Cost of Living AdjustmentYoumayreceiveanannualCostofLivingAdjustment(COLA)toyourretirementordisabilitybenefitinaccordancewiththefollowingschedule:

• IfyoujoinedERBpriortoJuly1,2013(i.e.,membersinTier 1andTier2),youmaybeginreceivingaCOLAonJuly1ofthe yearinwhichyoureachage65orJuly1oftheyearfollowing youreffectiveretirementdate,whicheverdateislater.

• IfyoujoinedERBonorafterJuly1,2013(i.e.,membersinTier3)youmaybeginreceivingaCOLAonJuly1oftheyearinwhichyoureachage67orJuly1oftheyearfollowingyoureffectiveretirementdate,whicheverdateislater.

IfyouareeligibleforaCOLA,theamountdependsontheannualchangeintheConsumerPriceIndex(“CPI”).IfthereisnoincreaseintheCPI,ortheCPIisnegative,aCOLAisnotpaid;however,iftheCPIisnegative,retirementbenefitswillnotbedecreased.WhentheEducationalRetirementFundisfullyfunded(i.e.,thefundedratiois100%),iftheincreaseintheCPIislessthan2%,theCOLAwillbethesameamountastheincreaseintheCPI.IftheincreaseintheCPIis2%orgreater,theCOLAwillbeone-halfoftheCPIincrease,exceptthatitwillnotexceed4%orbelessthan2%.However,untiltheEducationalRetirementFundis100%funded,theCOLAwillbereducedasshownintheexamplesbelow.Thereductionistiedtothemedianannualretirement

ofdisabilitybenefitwillbeeitherthefirstdayofthemonthfollowingterminationofemploymentorthefirstdayofthemonthfollowingfilingyourapplicationwithERB,whicheverislater.Ifyouarereceivingdisabilitybenefitsandyouhavenotbeendesignatedaspermanentlydisabled,yourcaseissubjecttoreviewbyERB.Thisreviewwillbemadeatleastannuallyand,atthediscretionofERB,mayberequiredmorefrequently.IfERBdeterminesyouareabletoreturntowork,yourdisabilitybenefitswillcease.Ifyourphysicalconditionimprovessignificantly,youarerequiredtoreportyourimprovedconditionwithin30days.Failuretodosocancarryalegalpenalty.Ifyouarereceivingdisabilitybenefitswhenyouturn60,NewMexicolawrequiresyourstatustochangeto“retired.”Yourdisabilitybenefitbecomesaretirementbenefit.Thebenefityoureceiveafterthedisabilitybenefitis convertedwillbethesameamountasthepriordisabilitybenefit.Theamountwillnotberecalculatedbasedontheretirementbenefitformula.Ifyouhavenotalreadyselectedabeneficiarypaymentoption(see“BenefitOptions”),theERBwillsendyouaformtodoso.Ifyoudonotreceivethatformwithin90daysofyour60thbirthday,pleasecontactERB.

Death Prior to RetirementWhenyouhavefiveyearsofearnedservicecredit,youarevestedinthedefinedbenefitplan.Ifyoudiebeforeyouretire,thedefinedbenefitplanprovidesthebeneficiaryyounamedonyourBeneficiaryDesignationForm42anoptionforalumpsumbenefitortoelecttoreceivealifetimebenefitunderOptionB.However,ifyounameasyourbeneficiaryeither(i)morethanoneperson,or(ii)atrust,or(iii)designatesomeonewhoisnotyourspouseandwhoismorethantenyearsyoungerthanyouare,thebeneficiary(ies)receivealumpsumbenefit.Priortoretirement,youmaychangeyourbeneficiaryatanytimebysubmittinganewForm42.TheformisontheERBwebsiteatwww.nmerb.org.IfanERBmemberwhochoseOptionBdiespriortoretirement,thebenefitiscomputedasofthefirstdayofthemonthfollowingthedateofdeath.Thebeneficiarymayelecttobeginreceivingmonthlybenefitsthemonthafterthemember’sdeath,orbenefitsmaybedeferreduptothedeceasedmember’s60thbirthday.Ifadeceasedmemberunderage60hadlessthan25yearsofservice,deferringthebenefituntilthatmember’s60thbirthdayprovidesalargerbenefitpaymenttothebeneficiarybecausesurvivorbenefitsarealsosubjecttotheagerelatedreductionofbenefits.See“RetirementEligibility:Age&Benefits”.

IfyouarethebeneficiaryofamemberwhoseemploymentbeganpriortoJuly1,2010,didnotwithdrawcontributions,anddiedatage42with15

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benefitsaresubjecttoreviewandapprovalbyERBtoensuretheordercomplieswiththelawandcanbeadministered.BesuretoprovideERBwithaQDROtoavoidadelaybenefitpayments.ERBcanprovideonrequest,anaccountstatement,historyofaccumulatedquarterlysalaryandcontributions,andbeneficiaryinformationtomembersgoingthroughadivorce.MemberscandownloadamodelorderwithattorneyinstructionsattheERBwebsite,www.nmerb.org,tohelpthemdraftanacceptablecourtorderin19compliancewiththeEducationalRetirementAct.OtherthanthroughacceptableQDROs,properlypreparedcourtordersforchildsupportorliensfromtheIRS,memberbenefitscannotbeassignedorattachedbyanylegalprocess.

Taxes, Other DeductionsYour retirement benefits are subject to state and federal income tax. However, contributions that were previously taxed, including contributions made prior to 1983 and service credit purchased with after-tax dollars, will not be subject to additional taxation. If you request withholding, the ERB will compute the amount of your taxable income and withhold state and federal taxes from your pension payments.

You may also opt to have insurance premiums for the New Mexico Retiree Health Care Authority (NMRHCA) and dues to the National Education Association (NEA) and the New Mexico Association of Educational Retirees (NMAER) withheld from your benefit payment.

TheERBwillissueanIRSForm1099annuallyreportingyourretirementbenefitfortaxpurposes.YourForm1099willbemailedtoyouattheaddressonfilewiththeERB.PleasekeepyouraddressinformationcurrentwiththeERBtoensureproperdeliveryofyourForm1099andothermaterialthattheERBmaysendfromtimetotime.AcopyoftheForm1099willalsobefiledwiththeIRS.

NM Retiree Health Care AuthorityManyERBmemberscanopttoreceivehealth,dental,vision,long-termcareandlifeinsurancecoveragethroughtheNewMexicoRetireeHealthCareAuthority(NMRHCA).TheNMRHCAprovidessubsidizedhealthinsurancepremiumsforbothMedicareandpre-Medicareeligibleretirees.InordertoqualifyforNMRHCAcoverage,youmusthaveretiredfromaparticipatingNMRHCAemployer.AlistofparticipatingemployersmaybeobtainedfromtheNMRHCA.TheUniversityofNewMexico,NewMexicoStateUniversity,SanJuanCollegeandClovisCommunityCollegearenot

benefit.Themedianbenefitisrecalculatedaftertheendofeachfiscalyear(i.e.,afterJune30eachyear).Whenthefundedratiois90%orless,theCOLAforretireeswhoseannuityisatorbelowthemedianwhohave25ormoreyearsofservicecreditatretirementwillbereducedby10%.Forretireeswhoseannuityiseither(i)greaterthanthemedianor(ii)whohavelessthan25yearsofservicecreditatretirement,theCOLAwillbereducedby20%.Whenthefundedratioexceeds90%butislessthan100%,theCOLA forretireeswhohad25ormoreyearsofservicecreditatretirementwhoseannuityisequaltoorlessthanthemedianadjustedannuitywillbereducedby5%.Forallotherretirees,itwillbereducedby10%.Whenthefundedratiois100%,theCOLAreductionceases.

Thefollowingexamplesarebasedona2%annualincreaseintheCPI:Fundedratiois90%orless

• Retireeswithbenefitsatorbelowthemedianandwith25ormoreyearsofservice,theCOLAwouldbe1.8%.

• Forallotherretirees,theCOLAwouldbe1.6%.Fundedratioexceeds90%andislessthan100%

• Retireeswithbenefitsatorbelowthemedianandwith25ormoreyearsofservice,theCOLAwouldbe1.9%.

• Forallotherretirees,theCOLAwouldbe1.8%.Fundedratiois100%orgreater •Forallretirees,theCOLAwouldbe2%.Thereductionceases.

Community Property RightsNewMexicoisacommunitypropertystate,whichmeansthatassetsandpropertyacquiredduringamarriageareconsideredtobejointlyownedbybothspouses.Intheeventofdivorce,thisappliestoretirementbenefitsundertheERA.ERBretirementbenefitscannotbedividedunlessERBreceivesacopyofanacceptabledomesticrelationsorderendorsedbythecourt(alsoknownasaqualifieddomesticrelationsorderora“QDRO”)thatdirectstheERBonhowthemember’sretirementbenefitswillbedividedbetweenthememberandthemember’sformerspouse.EvenwithaQDRO,paymentsofretirementordisabilitybenefitscannotbemadetoaformerspouseuntilthebenefitpaymentisduetothemember.Inotherwords,ifamemberisnoteligibletoretireatthetimeofdivorce,ERBcannotpaythenon-memberspousehisorherinterestintheretirementaccount.NobenefitscanbedividedunlessERBisservedwithaQDROandthebenefitsareeligiblefordistributiontotheERBmember.Ordersdividingretirement

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limitation.Alternatively,ERBretireesmayworkforanERBemployerundertheReturntoWorkException(the“RTWException”)andearnthegreaterof$15,000or25%ofthesalaryforthefulltimeequivalent(FTE)ofthepositioninwhichtheretireeisworking.RetireesworkingundertheRTWExceptioncancontinuetoreceiveretirementbenefitssolongastheydonotexceedtheearningslimits.TheRTWExceptionisdiscussedfurtherinthesub-section“Greater of .25 FTE or $15,000 RTW Exception.”

ERBretireeswhoreturntoworkforanon-ERBemployerafterretirementwillnotbesubjecttotheERBrequirementsgoverningworkingforanERBemployerafterretirementandtheirbenefitswillthereforenotbeaffected.

Return to Work Program TheReturntoWork(RTW)ProgramallowsERBretireestogobacktoworkforanERBemployerwithouthavingtosuspendretirementbenefitsiftheysatisfytherequirements.(TheRTWProgramisseparatefromtheGreaterof0.25FTEor$15,000RTWExceptiondiscussedbelow.)TheretireemustcompleteaReturn to Work Application andsubmitittoERBforapprovalbeforebeginningworkforanERBemployeragain.TheapplicationcanbefoundontheERBwebsite.OnceintheRTWProgram,retireescanchoosetoworkfullorpart-timewithnorestrictionsontheincometheyearn.RetireesworkingundertheRTWProgrammustpaynonrefundablecontributionstoERBequaltothecontributionspaidbynon-retiredmembers.Theiremployersalsopayemployercontributions.MemberswhoretiredafterJanuary1,2001,mustcompleteatwelveconsecutivemonthbreakinservice,orlayout.Thetwelveconsecutivemonthperiodcanoccuranytimeafterretirement;itdoesnothavetobeimmediatelypriortoapplyingfortheRTWProgram.Duringthelayout,themembercannotworkfororrenderanyservicetoanERBemployer.“Renderingservice”includesanywork,whetherfullorpart-time,substituteteaching,voluntarilyperformingdutiesthatwouldotherwisebe,orhaveinthepastbeen,performedbyapaidemployeeorindependentcontractor,orperformingdutiesforanERBemployerasanindependentcontractororasanemployeeofanindependentcontractor.AnERBemployerincludesanyentityincorporated,formedorotherwiseorganizedby,orsubjecttothecontrolofanERBemployer,whetherornottheentityiscreatedforprofitornonprofitpurposes.IfyouinitiallyretiredafterJanuary1,2001,andlatersuspendedretirementtoearnmoreservicecredit,youmustcompletethetwelveconsecutivemonthlayouteachtimeyoure-retiretobeeligiblefortheRTWProgram.Theonlyexceptiontothebreakinserviceorlayoutrequirementisfor

NMRHCAemployers.Ifyouworkedforanyoftheseinstitutionsatthetimeofyourretirement,youmayqualifyforcontinuinghealthbenefitsthroughyouremployer.Pleasecontactthoseemployersdirectlyregardingthehealthcarebenefitsthattheymayprovide.TheERBdoesnothaveinformationabouttheirretireehealthcarebenefits.

Formoreinformation,pleasecontacttheNMRHCAdirectlywww.nmrhca.org 800-233-2576

ALBUQUERQUE 4308CarlisleBlvd.,NE,Suite104Albuquerque,NM87107505-222-6400

SANTA FE 810W.SanMateo,SuiteDSantaFe,NM87505800-233-2576

ERA/PERA ReciprocityThePublicEmployeesRetirementReciprocityAct(Section10-13A-1,NMSA1978)requiresservicecreditearnedunderthePublicEmployeesRetirementAct(PERA)andtheEducationalRetirementAct(ERA)tobecombinedforpurposesofdeterminingretirementeligibilityandbenefits.Youmustfileyourretirementapplicationwiththesystemwhereyouweremostrecentlyemployed.Thesystemforwhichyouworkedearliermustthenverifyyourqualifiedemployment.Thelastretirementsystemtowhichyoumadecontributionswillberesponsibleforpayingyourretirementbenefits,regardlessofwhichNewMexicopublicretirementsystemyoucontributedtoforthelongerperiodoftime.ServicecreditforthePERAandERBDefinedBenefitPlaniscalculatedbasedontherulesandformulasineachplanthatwereineffectatthetimeofemployment.ERBmemberswhobelievetheyareeligibleforcreditunderPERAshouldcontactanERBbenefitsspecialistatleastsixmonthspriortoretirementtorequestananalysisofservicecreditdueunderthePublicEmployeesRetirementReciprocityAct.

Working after RetirementERBretireeswhoworkforanERBemployerafterretirementaresubjecttotheprovisionsoftheEducationalRetirementActandtheERBrulesaddressingthisarea.AnERBretireewhodoesnotsatisfythoserequirementswillberequiredtosuspendretirementbenefits.Aretireewhosuspendsbenefitswillearnadditionalservicecreditandmayhaveahigheraverageannualsalaryforcalculationofbenefitsuponre-retirement.ERBretireeswhoresumeemploymentforanERBemployerafterretirementcanapplytotheReturntoWorkProgram(the“RTWProgram”)andcontinuetoreceiveretirementbenefitswithoutanyearnings

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RetireesshouldkeeptrackoftheirearningsandcheckwiththeirERBemployerregardingthespecificamountofhours,classes,etc.allowedforthe0.25legoftheRTWException.Itisyourresponsibilitytokeeptrackofyourearningstoavoidexceedingthemaximumallowed.ERBneithermonitorsretireeRTWearnings,nornotifiesretireesthatRTWearningsmayexceedthe.25RTWlimitations.Employeeswhoexceedtheearningsor.25FTEworkloadlimitwillbereturnedtoactivestatus.Anemployeereturnedtoactivestatusmustpaynonrefundablecontributionsatthesamerateasactivemembers.

ConsiderapplyingfortheRTWProgramifyouqualify,evenifyouonlyintendtoworkundertheGreaterof0.25FTEor$15,000RTWException.Onceyourapplicationisapproved,ifyourearningsexceedtheallowablelimit,youwillnotloseyourretirementstatusorforfeitretirementbenefits.IfyouhavenotappliedandbeenapprovedfortheRTWProgram,youruntheriskoflosingbenefitsifyourearningsexceedtheallowablelimits.

RememberthattimeworkedundertheGreaterof0.25FTEor$15,000RTWExceptiondoesnotqualifyasabreakinserviceforthetwelveconsecutivemonthlayoutrequiredfortheRTWProgram.

Independent ContractorsIfyouprovideservicestoanERBemployerasanindependentcontractor,yourearningswillhavenoimpactonyourpension.However,itiscriticalthatbothyouandtheemployerfollowIRSrulesandregulationsthatdistinguishbetweenemployeesandindependentcontractors.BothERBretireesandtheirERBemployersmustcompletetheIndependent Contractor Determination Application,availableatwww.nmerb.org,andsubmitthemtoERBforreviewandapproval.RememberthattimeworkedasanindependentcontractorforanERBemployerdoesnotcounttowardthetwelveconsecutivemonthlayoutrequiredfortheRTWProgram.

Non-ERA EmploymentIfyouworkforanemployerthatisnotcoveredbytheERA,yourearningswillhavenoimpactonyourpension.Thismeansyoumayworkforanycity,state,countyorfederalgovernment,privateschool,BureauofIndianAffairsschool,publicschooloutsideNewMexico,orprivate-sectoremployer(includingaprivateschool)withoutlosingyourbenefit.

memberswhoretiredbeforeJanuary1,2001,whohavenotsuspendedtheirbenefits.

Ifyouareinthatcategory,youdonotneedtofulfillthetwelveconsecutivemonthlayoutperiod.However,ifyouretiredbeforeJanuary1,2001,thensubsequentlysuspendedyourretirementtoearnadditionalservicecredit,andthenre-retired,youmustcompletea90-daylayoutbeforequalifyingfortheRTWPrograminadditiontotherequiredtwelvemonthlayoutfortheexception.

Duringthetwelveconsecutivemonthlayoutperiod,youmayworkfornon-ERBemployers,includingemployerscoveredbythePublicEmployeesRetirementAssociation(PERA)unlessyouarealicensededucatorworkinginapositionthatrequiressuchalicenseforaNewMexicoagencythathasaneducationprogram(i.e.,DepartmentofCorrections,PublicEducationDepartment,DepartmentofHealth,DivisionofVocationalRehabilitationandEducationalRetirementBoard).

IfyouareworkingforanERBemployerasacontractororundertheGreaterthan0.25FTEor$15,000RTWException,youmustcompleteatwelveconsecutivemonthlayoutbeforeyoumayapplyfortheRTWProgram.Greater of 0.25 FTE or $15,000 RTW Exception YoumayworkforanERBemployerafterretirementwithoutqualifyingorapplyingfortheRTWProgram,butyourearningsarelimited.UndertheGreaterof0.25FTEor$15,000RTWException,youmayearnthegreaterof$15,000perfiscalyearoranamountequalto25%ofthesalaryforthefull-timeequivalency(FTE)ofthepositioninwhichyouareemployed.FTEreferstothenumberofhoursworkedthatadduptoafulltimeemployee.ThedefinitionofFTEvariesbyposition.ERBemployersdeterminewhattheFTEisforaparticularpositionandwhat25%ofFTEisforthatposition.ThesalaryfortheGreaterof0.25FTEor$15,000RTWExceptioniscalculatedforaJuly1throughJune30fiscalyear,andisbasedonthefulltimecompensationforthepositionyouworkafterretirement,notonyoursalarybeforeretirement.IfyouworkformorethanoneERBemployer,youareobligatedtonotifyeachERBemployeraboutyourERBemployerjobs.ThesalarieswillbecombinedtodeterminewhetheryouareincompliancewiththeGreaterof0.25FTEor$15,000RTWException.IfyouearnmoreinafiscalyearthanisallowedundertheGreaterof0.25FTEor$15,000RTWException,youwillloseyourretirementstatusandforfeitretirementbenefits.ThischangewillbeeffectivethefirstdayofthemonthinwhichERBemployerearningsexceed,oraredeemedtoexceed,thegreaterof$15,000orthesalaryfor0.25FTE.

ContributionratesforARPparticipantsarethesameasthoseforDefinedBenefitPlanmembers.RefertoERB’swebsiteatwww.nmerb.orgforcurrentemployeeandemployercontributionrates.ERBemployerspaya3%contributionratetocovertheactuarialimpactontheDefinedBenefitPlanattributabletoemployeesparticipatingintheARP.IfyouterminateyouremploymentwithaNewMexicouniversityorcommunitycollege,youmayrollovertheARPaccountbalancetoanotherqualifiedretirementplanorwithdrawthebalance.IfthedistributionisnottransferreddirectlyfromyourARPaccountintoanotherqualifiedretirementplan,itissubjecttofederalandstateincometaxanda10%penaltyforearlywithdrawal.ContactyourARPvendorforinformationonrolloversanddistributions,andIRSrequirements.ERBcannotprovideadviceonthetaxconsequencesofdistributions.Asaresultoflegislativechangesin2009,ARPparticipantsnowhavetheopportunitytoswitchtotheERBDefinedBenefitPlan.AfteryouhavemadecontributionstotheARPforsevenyears,youhavea120-daywindowtoenrollintheDefinedBenefitPlan.EligibilitybeginsonthefirstdayofthemonthafterthedateonwhichyouhavemadesevenyearsofcontributionstotheARP.Theseven-yearmarkistheonlyopportunityyouwillhavetoswitchtotheDefinedBenefitPlan.Ifyoumakethechange,youcannotswitchbacktotheARP.IfyouopttomovetotheDBP,themoneyinyourARPaccountwillremainthere.YoumustcontributetotheDefinedBenefitPlanforfiveyearstovestintheplanandbeeligibleforretirementbenefits.YoucannotpurchaseservicecreditforthetimeinwhichyouwereenrolledintheARP;however,thesevenyearsofparticipationintheARPwillcounttowardeligibilityrequirementstoretireundertheERBDefinedBenefitPlan.

ARP Post-Retirement Work

ERBrequirementsgoverningpost-retirementworkforanERBemployer(i.e.,theRTWProgramandtheRTWException)applytoallpersonswhoretireundereithertheDefinedBenefitPlanortheARP.FederallawprohibitsthesuspensionofARPretirementbenefits;however,ARPretireesarestillrequiredtocomplywiththerequirementsfortheRTWProgramandtheRTWException.ThisincludestherequirementundertheRTWProgramthataparticipantpaynon-refundablecontributionstotheEducationalRetirementFundinanamountequaltothemembercontributionthatanactivememberpays.ARPRetireeswhodonotqualifyfortheRTWProgrammayworkforanERBemployerundertheRTWExceptionsubjecttotheRTWearningsandFTEpercentagelimitations.

IfanARPretiredparticipantexceedstheallowedlimitsundereitherofthetwoRTWexceptionsubcategories,theparticipantwillnotbeeligible

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Suspending RetirementIfyouhaveretiredundertheERBDefinedBenefitPlan,youmaysuspendyourretirementandresumefull-timeemploymentwithanERBemployeratanytime.SuspendingretirementisnotthesameastheReturntoWorkProgram.YoumustnotifyERBofthischangeinstatusinwriting.Uponyourdateofhire,ERBwillstoppayingtheretirementbenefitandyouwillagainbeacontributingmemberoftheERB.Duringre-employmentaftersuspendingretirement,youwillearnmoreservicecreditandyoumightincreasethefinalaveragesalaryonwhichyourretirementbenefitiscalculatedwhenyoure-retire.Whenyoudecidetoretireagain,yourbenefitwillberecalculated.Innocasewillyourbenefitbelessthanitwaswhenyouretiredthefirsttime.IfyoupreviouslyselectedOptionB“Joint100%SurvivorBenefit”orOptionC“Joint50%SurvivorBenefit”toprovidesurvivorbenefitstoyourbeneficiary,yourretirementoptionwillnotbechangedifyoudecidetosuspendyourbenefitsandresumeworking.Forexample,ifyouchoseOptionCwitha50%survivorbenefitforyourbeneficiarywhenyouretiredthefirsttime,yourbenefitswillberecalculatedattheOptionClevelwhenyoure-retire.Ifyoudieaftersuspendingyourbenefitsandgoingbacktowork,yourbeneficiarywillreceivemonthlybenefitsunderOptionC.Ifyourbeneficiarypredeceasesyou,yourbenefitswillreverttotheOptionA“StraightLife”benefit.

Alternative Retirement Plan for University and College FacultyFacultyandprofessionalemployeesofNewMexicopublicuniversitiesandcommunitycollegeshavetheoptionofparticipatingintheAlternativeRetirementPlan(ARP),adefinedcontributionplan.TheycanopttoparticipateineitherERB’sDefinedBenefitPlanorARPduringthefirst90daysofemploymentiftheyareinaneligibleposition.Inadefinedcontributionplan,participantshaveindividualaccountswithanARPserviceprovider(vendor).ThecurrentARPvendorsareTIAA-CREFandFidelity.Benefitsarebasedoncontributionsplusinvestmentearnings.ARPparticipantsdirecttheirowninvestments,andretirementbenefitsaretiedtothevalueoftheassetsintheaccountatretirement.Uponretirement,ARPparticipantshavethreeoptions:

• amonthlyannuitybasedontheretiree’sestimatedlifespan,• paymentsreceivedoverafixedtermofyears,or• alump-sumpayout.

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For Retirees Only Obviously,yourrelationshipwithERBdoesnotendwhenyourcareerasaneducatorcomestoaclose.Inadditiontoamonthlybenefitpaymentfortherestofyourlife,youwillreceivetimelycommunications,suchastheannualstatementforyouraccountandaForm1099forincometaxreportingpurposes.Pleasereviewbothdocumentscarefully.YourannualstatementandForm1099aremailedtothehomeaddresswehaveonfileforyouraccount,soitisimportanttokeepyourcontactinformationuptodate.

In ConclusionWeencouragebothactiveandinactivememberstoutilizetheERBwebsiteatwww.nmerb.org.YoucanreviewyourpersonalaccountinformationatMyNMERB,keepupwithlegislativechangestotheERA,downloadimportantforms,accessERBpublications,andaccessERBfinancialreportsandinvestmentpolicies.Wealsowelcomeyourphonecallsandvisitstoourofficeswheretheprofessionalstaffishappytoassistyou.OnbehalfoftheEducationalRetirementBoard,thankyouforyourservicetoNewMexico’seducationalinstitutionsand,mostimportantly,tothestudentsofNewMexico.

ContacttheERB:ERB-memberhelp@state.nm.us

Santa Fe (505)827-8030Albuquerque(505)888-1560

Toll-Free1(866)691-2345

fortheexception.TheARPparticipantwillbereturnedtoactivestatusandrequiredpaynonrefundablecontributionsatthesameratesasactivemembers.

T hinking About Retirement?Itisnevertooearlytostartplanningforyourretirement.Familiarizeyourselfwiththeyourretirementplandetails,monitorlegislativechanges,andstayintouchwithERB.Weareheretoassistyou.ERBsponsorsfrequentretirementseminarsthroughoutNewMexicotohelpyoumakeinformeddecisionsaboutyourretirement.ChecktheERBwebsitewww.nmerb.orgforthescheduleofupcomingseminarsandtoregisteronlinetoviewyouraccountdata.ERBmembersperiodicallyreceiveaccountstatementsandothercorrespondence.IfyouarestillemployedbyanERBemployer,yourannualstatementissenttoyouremployer.IfyouareretiredornolongerworkforanERBemployer,ERBmailsanannualstatementtotheaddressonfileforyouraccount.ItisveryimportanttokeeptheaddressonyourERBaccountcurrent.PleasereviewtheannualstatementcarefullyandbringanydisputedinformationtotheattentionofanERBbenefitspecialistand your employer’s payroll department.

WesuggestyoucontactERBtwoyearsbeforeyourplannedretirementdatetoensureyouhavereceivedcreditforallERBearnedservicecreditaswellasmilitary,federal,orout-of-statecreditstowhichyouareentitled.Oneyearbeforeyourplannedretirementdate,besureyoucandocumentyourdateofbirthaswellasyourbeneficiary’sdateofbirthifyouplantoselectOptionBorC.Birthcertificates,passportsorbaptismalcertificatesareacceptabledocumentation.YoumayalsowanttoprovideanERBbenefitspecialistwithspecificinformationaboutyourplannedretirementdate,yourcurrentsalary,andyourbeneficiary’sbirthdate(ifapplicable)toreceiveanestimateofyourbenefitpayment.Youmayusetheonlinebenefitscalculatoratwww.nmerb.orgforanunofficialestimate.Sixmonthsbeforeyourplannedretirementdate,requestaRetirement ApplicationformfromyourpersonnelofficeordownloadonefromERB’swebsite.YoucompleteSection1andyouremployercompletesSection2.ForwardtheapplicationtoERBpriortothelastdayofthemonthpriortoyourretirementtoensuretheeffectiveretirementdate. For members considering retirementIfyouhavenotbeenemployedbyanERBemployerforsixmonthsormorewhenyouapplyforyourretirementbenefits,youmaysendyourRetirement ApplicationdirectlytoERB(completeonlypage1).ERBshouldreceivetheapplicationsixmonthspriortoyourplannedretirementdate.

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Notes

Santa Fe (505) 827-8030Albuquerque (505) 888-1560Toll-Free 1 (866) 691-2345

www.nmerb.org