History of “RTW” Program

Legislation in 2019 modified certain requirements for NMERB retirees wishing to return to work. It incorporated parts of the Return to Work exception into statute and required all RTW employees to complete an RTW application. Upon approval, NMERB retirees may return to work for an NMERB employer if they laid out for 12 consecutive months after retirement and pay non-refundable contributions, or worked 0.25 FTE (full-time equivalent) or less for an employer with no layout required. Starting July 1, 2019, ALL RTW retirees were required to complete an RTW application.

A. Return to Work .25 FTE or less provision

The Return to Work .25 FTE or less provision (RTW provision) is separate from the RTW program. The RTW provision allows retirees to work 0.25 FTE or less. The RTW program and provision allows educators who have chosen to retire the option of continuing to offer their skills and experience to New Mexico’s schools, colleges and Universities, without having to suspend their retirement. No contributions required by either the retiree or the employer.

B. Return to Work Less than $15,000 per year

Effective May 20, 2020, a retired member may return to work for an ERB employer and earn less than $15,000 per year, provided the member has completed a 90 consecutive day layout period. The member cannot have entered into either a formal or informal agreement to return to work prior to the date of retirement or within 90 days after the date of retirement. The 90-day layout period may include part of the summer or other scheduled break. However, during the layout period, the retiree must not be employed with an ERB employer in any capacity. This includes full or part-time employment, services as a volunteer in a paid position, substitute teaching, services rendered as an independent contractor and/or employment with an independent contractor. No contributions required by either the retiree or the employer.

Each NMERB employer determines what is full-time for each position with the employer and the basis for making that determination (i.e. whether the determination is based on number of hours or classes). The full-time equivalent (FTE) may vary for each position with an NMERB employer and it also may vary between NMERB employers. Before accepting a position under the RTW provision, it is the retiree’s obligation to ask the NMERB employer what the FTE for that particular job is in order to determine if accepting the position would result in a violation of the RTW provision.

C. All Return to Work (RTW) retirees must complete an RTW application.

Senate Bill 42 (SB 42) of the 2021 New Mexico Legislation was signed into law by Governor Michelle Lujan-Grisham on April 5, 2021. This law amends the existing legislation regarding the Return to Work Program.

Summary of April 5, 2021 Return to Work Provisions within SB 42

{Section 2 Section 22-11-25.1 NMSA 1978 (being Laws 2001, Chapter 283, Section 2, as amended) is amended to read: “22-11-25.1. RETURN TO EMPLOYMENT–BENEFITS– CONTRIBUTIONS. Complete Senate Bill }

A. Greater than 25% Provision

Paragraph A. Until January 1, 2024, NMERB Retirees serving at greater than 25% of full time employment with an NMERB Employer (aka. Local Administrative Unit) must suspend benefits until end of employment unless that member has not been working for that Local Administrative Unit for 12 consecutive months after their effective retirement date.

B. No Benefit Suspension Provision

Paragraph B. Until January 1, 2024, a member who retired on or before January 1, 2001 and they have not suspended benefits or been required to suspend benefits and returns to work with a Local Administrative Unit, that member is not required to suspend benefits.

C. Service credit purchase or acquisition unavailable

Paragraph C. A retiree is entitled to receive benefits but not allowed to acquire or purchase service credit for employment with a Local Administrative Unit.

D. Application to NMERB required

Paragraph D. A retiree may apply for approval by the board to return to work for a Local Administrative Unit. Once approved by the board, a retiree may return to work.

E. Requirement to make non-refundable contributions to fund

Paragraph E. A retiree and the LAU in which the retiree is employed must make non-refundable contributions to the fund as required by Section 22-11-21 NMSA 1978.

F. Education Retirement Act (ERA) benefit suspension change

Paragraph F. Until January 1, 2024, a member who retired on or before January 1, 2001 and had benefits that were suspended under the ERA and has not worked for a Local Administrative Unit for 12 consecutive months (excluding part time work in summer or other breaks / vacations) after the effective retirement date, now is not required to suspend benefits.

G. Requirement to make contributions retiree healthcare fund

Paragraph G. A retiree and the LAU in which the retiree is employed must make contributions to the healthcare fund in specified amounts as required by Section 10-7C-15 NMSA 1978.

H. Stipulations to continued benefits

Paragraph H. A retiree may return to a Local Administrative Unit without suspension of benefits if: 1) no work has been done for 90 days after the effective retirement date; 2) no contractual or employment agreements have been made with the Local Administrative Unit prior to effective retirement date; and 3) the retiree salary is less than $15,000.00 annually.

I. Definitions of “rendered service” & “Local Administrative Unit”

Paragraph I. 1) Rendered service includes activities performed prior to retirement and encompassing those performed as an employee, contractor, or volunteer for the Local Administrative Unit. 2) Local Administrative Unit includes any entity or organization, whether for profit or non-profit, that is subject to the control of a Local Administrative Unit.

House Bill 73a (HB 73a) of the 2021 New Mexico Legislation was signed into law by Governor Michelle Lujan-Grisham on March 1, 2022. The effective date for this legislation is May 18, 2022.

Summary of  new Return to Work as listed in House Bill 73a.

{SECTION 1. Section 22-11-25.1 NMSA 1978 (being Laws 2001, Chapter 283, Section 2, as amended) is amended to read: “22-11-25.1, RETURN TO EMPLOYMENT–BENEFITS-­ CONTRIBUTIONS. Complete House Bill as signed.}

A. Greater than 25% FTE

Except as otherwise provided in Subsections B, F, H and I of this section, until January 1, 2024, a retired member who begins employment with a local administrative unit at a level greater than one-quarter full-time employee, regardless of salary level, is required to suspend the member’s retirement benefits until the end of that employment unless the member has not rendered service to a local administrative unit for at least twelve consecutive months after the date of retirement.

B. No benefit suspension if retired before or on 01/01/2001

Until January 1, 2024, a retired member who retired on or before January 1, 2001, has not suspended or been required to suspend retirement benefits pursuant to the Educational Retirement Act and returns to employment with a local administrative unit is not required to suspend the member’s retirement benefits.

C. No service credits awarded or available for purchase.

A retired member who returns to employment with a local administrative unit in accordance with this section is entitled to receive retirement benefits during that employment but is not entitled to acquire or purchase service credit for that employment.

D. A Return to Work application must be submitted and approved by ERB

A retired member may return to employment with a local administrative unit only if the member submits an application to return to work, on a form prescribed by the board, the board approves the application and the applicant complies with other application rules promulgated by the board.

E. Nonrefundable contributions to the fund must be made.

Contributions to the A retired member who returns to employment pursuant to Subsection A, B, For I of this section shall make nonrefundable contributions to the fund as would be required by Section 22-11-21 NMSA 1978 if the retired member were a non-retired employee. The local administrative unit employing the retired member shall likewise make contributions as would be required by that section.

F. 12 Month Layout and Benefit Suspension.
Until January 1, 2024, a retired member who retired on or before January 1, 2001, who suspended or was required to suspend retirement benefits under the Educational Retirement Act is not required to suspend the member’s retirement benefits if the retired member has not rendered service to a local administrative unit for an additional twelve or more consecutive months, not including any part of a summer or other scheduled break or vacation period, after the initial date of retirement.

G. Contributions to retiree health care required.

A retired member who returns to employment with a local administrative unit shall make contributions to the retiree health care fund during the period of that employment and in the amount specified in Section 10-7C-15 NMSA 1978. The local administrative unit employing the retired member shall likewise make contributions during the period of that employment and in the amount specified in that section.

H. 90 day layout and less than $15,000

A retired member may return to employment with a local administrative unit without a suspension of the member’s retirement benefits; provided that:

• the retired member has not rendered service to a local administrative unit for at least ninety days after the date of retirement;
• prior to the date of retirement, or within ninety days after the date of retirement, the retired member did not enter into any formal or informal agreement with a local administrative unit or with any contractor providing services to a local administrative unit to return to employment; and
• the retired member earns a salary of less than fifteen thousand dollars ($15,000) per year.

I. 90 day layout and 36 month employment limit

A retired member may return to employment with a local administrative unit without a suspension of the member’s retirement benefits; provided that:

• the retired member has not rendered service to a local administrative unit for at least ninety days after the date of retirement; and
• the retired member returns to employment for a period of no more than thirty-six consecutive or nonconsecutive months pursuant to this subsection.

J. Rendered Service and Local Administrative Unit as used in this section

• “rendered service” includes employment, whether full or part time; substitute teaching; voluntarily performing duties that would otherwise be, or in the past have been, performed by a paid employee or independent contractor; and performing duties as an independent contractor or an employee of  an independent  contractor;  and
• “local administrative unit” includes any entity incorporated, formed or otherwise organized by, or subject to the control of, a local administrative unit, regardless of whether the entity is created for profit or non-profit purposes.