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2.82.1NMAC


Published: 2015

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TITLE

2               PUBLIC

FINANCE

CHAPTER

82     EDUCATIONAL RETIREMENT

PART

1                 GENERAL PROVISIONS

 

2.82.1.1                 ISSUING AGENCY: Educational Retirement Board, P. O. Box 26129, Santa Fe, New

Mexico 87502-0129

[2.82.1.1 NMAC - Rp, 2.82.1.1 NMAC,

11-15-12]

 

2.82.1.2                 SCOPE: This rule addresses the organization and operations of the

educational retirement board.

[2.82.1.2 NMAC - Rp, 2.82.1.2 NMAC,

11-15-12]

 

2.82.1.3                 STATUTORY AUTHORITY: The Educational Retirement Act, Section 22-11-1 to 22-11-55, NMSA 1978.

[2.82.1.3 NMAC - Rp, 2.82.1.3 NMAC,

11-15-12]

 

2.82.1.4                 DURATION: Permanent

[2.82.1.4 NMAC - Rp, 2.82.1.4 NMAC,

11-15-12]

 

2.82.1.5                 EFFECTIVE DATE: November 15, 2012, unless a later date is cited at the end of a

section.

[2.82.1.5 NMAC - Rp, 2.82.1.5 NMAC,

11-15-12]

 

2.82.1.6                 OBJECTIVE: The purpose of this rule is to establish procedures and functions

of the educational retirement board, its director, officers and committees.

[2.82.1.6 NMAC - Rp, 2.82.1.6 NMAC,

11-15-12]

 

2.82.1.7                 DEFINITIONS:  [RESERVED]

 

2.82.1.8                 BOARD MEMBERS AND OFFICERS:  Ex-officio members of the

board shall take office upon their qualifying for the offices enumerated in Section 22-11-3. The board member elected by the New Mexico educational

association shall be elected in the manner prescribed by the constitution of

that body and shall take office on January 1 following such election. The board

member elected by the New Mexico members of the American association of

university professors shall be elected in accordance with the constitution of

that body and shall take office on July 1 following such election. The board

member elected by the New Mexico association of educational retirees shall be

elected in the manner prescribed by the constitution of that body and shall

take office on July 1 following such election. The

board members appointed by the governor shall take office upon their receipt of

appointment. All board members shall hold office until their successors qualify

regardless of the length of the term and office. At the regular August meeting

of each year, the members of the board shall elect a chairman, a vice-chairman,

and a secretary. The duties of the officers shall include the following.

                A.            The

chairman shall preside at all meetings of the board.

                B.            The

vice-chairman shall serve as the chairman in the absence of the chairman.

                C.            The

secretary shall attest to the official actions of the board when such is

required.  The vice-chairman may attest

to the official actions of the board in the secretary’s absence.

[2.82.1.8

NMAC - Rp,

2.82.1.8 NMAC, 11-15-12]

2.82.1.9                 MEETINGS:

                A.            The

New Mexico educational retirement board shall hold regular meetings in the

months of February, April, June, August, October and December; provided

however, that the board may change the date of a meeting by board action, which

action shall be noted in the minutes.  Special

board meetings may be held in accordance with state law at the call of the chairman

or by any three board members.  Committee

meetings shall be scheduled as directed by the chairman of each committee.

                B.            Four

members of the board shall constitute a quorum at any regular or special

meeting.

                C.            Notice

of all meetings of the board and its committees shall be made in accordance

with the Open Meetings Act (Chapter 10, Article 15, NMSA 1978) and the Open

Meetings Resolution adopted by the board and shall be posted on the board’s

website and distributed as otherwise directed by the board.  Notice shall be given at least eight (8) days

in advance of any regular meeting scheduled by the board at its last meeting.

Notice shall be given at least three (3) days in advance of any special meeting

called by the chairman or any three members of the board.

                D.            The

chairman shall set the agenda of board meetings; provided however, that

if the chairman refuses to place an item on the agenda, three (3) individual

board members may petition in writing and place an

item on the agenda without the chairman's consent.  Committee chairmen shall set the agendas of

their respective committees.  Notice of

agendas shall be made in accordance with the Open Meetings Act and the Open

Meetings Resolution adopted by the board and the director shall distribute

board and committee agendas to board members, post the agendas to the board’s

website, and distribute the agendas as otherwise directed by the board.

                E.            Board

members and their designees may attend and participate in any regular or

special board meeting by telephone or other electronic device if:

                                (1)           the member or designee cannot attend the meeting due to an

emergency or unforeseen circumstance;

                                (2)           the member or designee can clearly be heard by everyone attending

the meeting and the member or designee clearly identifies his- or herself before

speaking or participating in a vote;

                                (3)           the member or designee has not attended regular meetings

electronically more than twice in a rolling twelve (12) month period;

                                (4)           no more than two members or designees who otherwise qualify

for participation under this section may do so at the same meeting; and

                                (5)           the member or designee otherwise complies with the Open

Meetings Act.

                F.            Failure of any

board member other than state treasurer or secretary of public education to

attend four consecutive regular meetings unless such absence is excused by the board

at a board meeting will be

considered resignation from the board by that board member.  Failure of the designee of the state

treasurer or the secretary of public education, respectively, to attend four (4)

consecutive regular meetings when the state treasurer or the secretary of

public education is absent will be considered resignation from the board by

that designee.  An excused absence must

be recorded in the board meeting minutes.

[2.82.1.9 NMAC - Rp, 2.82.1.9 NMAC,

11-15-12]

 

2.82.1.10               SANCTIONS AND ENFORCEMENT:

                A.            Any breach of a board member’s

fiduciary duty or violation of the rules or policies adopted by the board made

known to the board or of which the board becomes aware shall be reviewed by the

board.  If a majority of the entire board

so request, an alleged breach or violation may be investigated by an

independent person or entity not otherwise associated or affiliated with any

member of the board or the board’s staff. 

Such person or entity shall be selected by at least five board members

and designees, if such be sitting for board members.

                B.            Any hearing addressing an alleged

breach of fiduciary duty or violation of the rules or the policies adopted by

the board shall be conducted by the entire board, excepting the member accused

of such a breach or violation, in accordance with the rule governing

administrative appeals adopted by the board prior to the alleged breach or

violation having occurred.  If the rule

governing administrative appeals is amended between the time that an alleged breach

of fiduciary duty or violation of such rules or policies occurred and the time

of the hearing, the board shall conduct the hearing in accordance with the rule

that existed prior to its amendment.

                C.            Removal of a board member should

occur only when necessary for the board to fulfill its fiduciary duty.  A decision to remove a board member should be

based on a determination that allowing the member to continue to serve on the board

would be a violation of the other board members’ fiduciary duty and would be

detrimental to the educational retirement fund and the board.  Removal should not be undertaken solely to

inflict a penalty for a board member’s past action(s) unrelated to the matter

before the board.

                                (1)           Removal is appropriate in instances

of gross misconduct, violation of the board member’s fiduciary duty, repeated

violation of the rules and policies adopted by the board, or failure to fulfill

the duties of a board member.  "Gross

misconduct" is defined as violation of a clearly established rule or

policy, dereliction of duty, unlawful behavior involving matters of dishonesty

or deception, gross negligence, but not negligence or carelessness.

                                (2)           Removal of a board member other than

the state treasurer or the secretary of public education shall occur only after

a full investigation, hearing, and an affirmative vote by not less than five board

members and designees, if such are sitting for a board member.

                                (3)           The state treasurer and the secretary

of public education may be removed from the board only by removal from their

respective offices by an authority possessing such power.  The board may nevertheless, in compliance

with the procedures set forth herein, make a finding that the actions of a state

treasurer or a secretary of public education warrant removal from the board and

report such finding to appropriate authorities. 

A designee of the state treasurer or the secretary of public education,

respectively, shall not participate in board discussions or votes related to

the board’s consideration of a matter pursuant to this subparagraph that involve

the board member who named that person as a designee.

                                (4)           The designees of the state treasurer

and the secretary of public education, respectively, may be removed from the board

in accordance with the procedures set forth herein.  A designee so removed may not be reappointed

as a designee by either the state treasurer or the secretary of public education.

                D.            Board members or designees found to

be in violation of the rules and policies adopted by the board or who fail to

fulfill their duties, or who otherwise conduct themselves in a manner that is

not appropriate for a member of a board governing a public pension fund, may be

subject to formal reprimand or admonishment by the board.  Reprimand or admonishment shall be done upon

a public vote of not less than five board members and designees, if such are

sitting for board members, and shall be permanently recorded in the board minutes.

                                (1)           The board may choose to reprimand a board

member or designee upon determining that the member’s or designee’s violation

of the rules and policies adopted by the board or conduct as a board member

warrant censure or reproval but do not warrant

removal from the board.

                                (2)           The board may choose to admonish a board

member or designee upon determining that member or designee should be advised

or cautioned regarding actions such as a failure to fulfill the duties of a board

member or conduct that is inappropriate for a member of a board governing a

public pension fund.

                E.            The board may not impose a fine on a

board member or designee; however, the board may order a board member or

designee to repay expenses paid by the board on behalf of a board member or

designee for education or travel where a board member or designee did not

fulfill the purpose for which the education or travel expense was provided.  In addition, a board member or designee may

be required to repay the donor of a gift accepted in violation of Section

22-11-5.1 or the rules and policies adopted by the board.

[2.82.1.10 NMAC - N, 11-15-12]

 

2.82.1.11               FUNCTION OF THE BOARD:

                A.            The

board shall function primarily as a policy making body and except for such

ministerial acts as may be required by law, administrative matters shall be the

responsibility of the director. The board shall adopt administrative rules and

regulations through which the director shall implement the policies of the

board.

                B.            In

the consideration of cases involving individual members of the educational

retirement system, it shall be the stated policy of the board to consider all

appeals on their merits, guided by the Educational Retirement Act and the rules

or regulations adopted by this board.

                C.            Pursuant

to the board's fiduciary duty to the fund, the board has sole discretion in

determining whether there is adequate funding for any proposed change in

benefits or the funding formula.

[2.82.1.11

NMAC - Rp,

2.82.1.10 NMAC, 11-15-12]

2.82.1.12               ADMINISTRATIVE

BUDGETS:  The director shall prepare

budgets and requests for appropriations, which shall be considered and approved

by the board prior to submission to the department of finance and

administration or legislature.

[2.82.1.12 NMAC - Rp, 2.82.1.11 NMAC,

11-15-12]

 

2.82.1.13               EMPLOYMENT

OF STAFF:

                A.            The

board, at a regular meeting, shall employ a director who shall serve at the

pleasure of the board and at a salary to be set by the board.

                B.            The

board shall annually approve an organizational chart coincident with the

adoption of the budget. This chart shall include a description of all positions

required for the operation of the office, and the director shall be responsible

for staffing these positions. This responsibility shall include the authority

for the employment, promotion and dismissal of all employees.

[2.82.1.13 NMAC - Rp, 2.82.1.12 NMAC,

11-15-12]

 

2.82.1.14               INVESTMENT COMMITTEE:  The investments of the retirement fund shall

be under the immediate direction of an investment committee composed of the chairman

of the board, and three members of the board appointed by the chairman and

approved by the board, for terms of one (1) year. The appointments by the

chairman shall take place at the board’s regular October meeting each year. In

the event of a vacancy on the committee, the chairman may appoint a member of

the board to serve for the remaining portion of the one (1) year term. The

appointment shall become effective immediately; provided, however, that it

shall be subject to the approval by the board at its first meeting occurring

after said appointment. The actions of the committee shall be subject to applicable

statutes governing investment of the educational retirement fund, and the

administrative rules and policies adopted by the board relating to investments

of the fund.

[2.82.1.14 NMAC - Rp, 2.82.1.13 NMAC,

11-15-12; A, 12-30-13]

 

2.82.1.15               MEDICAL

REVIEW COMMITTEE AND APPEAL OF RECOMMENDATIONS:

                A.            The

board shall engage a medical review committee composed of three physicians well qualified in general medical knowledge. The

committee shall review all disability examination reports and advise the board

of the nature and extent of disability for all applicants for disability

benefits and the nature and extent of disability for those members already

approved for benefits when it becomes necessary to determine their continued

eligibility. The committee shall also render advice to the board on the

selection of physicians or other qualified persons to perform tests and

examinations upon applicants for disability, if necessary, and other medical

matters.

                B.            The

director may engage physicians and other qualified persons throughout the state

to perform tests and examinations upon applicants for disability, if necessary.

Results of such examinations shall be reported in detail to, and reviewed by,

the medical review committee. The director is authorized to pay a reasonable

fee for the reports and examinations requested by the committee.

                C.            Applicants

for disability benefits and recipients of disability benefits whose benefits

are subject to re-examination shall be given written notice of those

recommendations of the medical review committee which propose denial of the

application for disability or termination of disability benefits. The written

notice shall contain the following:

                                (1)           the recommendation of the medical review committee, and a

clear and concise statement of the reasons supporting the recommendation;

                                (2)           a statement that the applicant or disability recipient may

appeal the recommendation within thirty (30) days after receipt of the notice

in accordance with 2.82.11 NMAC.

[2.82.1.15

NMAC - Rp, 2.82.1.14 NMAC, 11-15-12; A, 6-16-15]

 

2.82.1.16               ACTUARY:  The director shall

recommend an actuarial firm to be engaged for the purpose of performing routine

actuarial services and actuarial investigations and evaluations to be provided

for in a contract to be approved by the board.

[2.82.1.16 NMAC - Rp, 2.82.1.15 NMAC,

11-15-12]

 

2.82.1.17               CONDUCT OF BUSINESS:

                A.            The

business affairs of the board shall be conducted by the director within the

authority outlined by the Educational Retirement Act and rules and procedures adopted

by the board.

                B.            On

behalf of the board, the director is authorized to execute vouchers, delegate

others to execute vouchers, buy and sell, or assign, or otherwise acquire or

dispose of stocks, bonds, notes, or other securities held by the board, and

execute such other documents as may be necessary to the administration of the Educational

Retirement Act.

                C.            The

director shall obtain the board’s approval before requesting a formal opinion

interpreting the law from the attorney general. The director may, however,

obtain advice, either oral or written, from the attorney general as the need

may arise.

                D.            The

rules and procedures of the board may be amended or expanded in the following

manner:

                                (1)           At

any regular meeting, the board may request the director to prepare amendments

or new rules for action at a subsequent meeting of the board.

                                (2)           The

director may, at any time, propose amendments or new rules for action at any

meeting of the board.

                                (3)           Any

proposed amendment or new rule shall be drafted by the director and sent to

each board member with the agenda for the meeting at which the proposal will be

considered, and all proposed rule changes will be sent to all local administrative

units, within a reasonable time, prior to being considered by the board.

                E.            Interest

rates that are to be set by the board under the Educational Retirement Act may

be changed at any meeting of the board but shall at a minimum be set at a board

meeting held in the final fiscal quarter of the year.

[2.82.1.17 NMAC - Rp, 2.82.1.16 NMAC,

11-15-12; A, 6-16-15]

 

HISTORY

OF 2.82.1 NMAC:

Pre-NMAC

History: The material in this part was derived from that previously filed with

the State Records Center and Archives under:

ERB 67-3, Rules and Procedures, filed 6-30-67.

ERB 78-1, Rules and Procedures, filed 8-7-78.

ERB

Rule I, Organization and Operation of the Educational Retirement Board, filed

7-2-82.

 

History

of Repealed Material:

2.82.1 NMAC, General Provisions, filed 11-16-2001 - Repealed

effective 11-15-2012 and replaced by 2.82.1 NMAC, General Provisions, effective

11-15-2012.