Santa Fe – Monday, April 5, 2021, Governor Michelle Lujan Grisham signed Senate Bill 42 into law. The new law improves ERB’s sustainability for New Mexico’s public education employee retirement.
Senate Bill 42 will increase ERB’s employer contributions by 1% for two fiscal years and calls for ERB to perform a study to be completed before July 1, 2022 to improve ERB’s solvency without the addition of further money from the General Fund. The current employer contribution rate is 14.15% and will increase to 15.15% beginning July 1, 2021 and then 16.15% beginning July 1, 2022 and remain at that amount in subsequent years. Each 1% increase in contributions brings an additional $34 million to the fund.
This bill also extends the sunset for the Return to Work program from January 1, 2022 to January 1, 2024.
The Educational Retirement Board’s funding period will decrease from infinite (never) to 57 years in 2024. This legislation puts ERB on a better path to 100% fund.