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HB 254

RELATING TO INSURANCE.

2025 Regular Session Introduced by Cory Chun and 1 co-sponsor

HB 254 would extend ERB retirees' return-to-work window to 60 months (from 36), allowing longer work without pension suspension, aiding schools but raising ERB funding risk.

Carried over to 2026 Regular Session.
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Bill Summary · HB 254

Summary — HB 254: Education Retirees Returning to Work Time Period (New Mexico, 2025)

Main purpose

HB 254 would amend Section 22-11-25.1 NMSA (the Educational Retirement Act) to extend the maximum period a retired member of the Educational Retirement Board (ERB) may return to employment with a local administrative unit (LAU) without suspension of their pension benefits. The bill as introduced proposed an increase from 36 months to 84 months; the House Labor, Veterans & Military Affairs Committee (HLVMC) amended that to 60 months.

Key provisions

  • Extends the current return-to-work (RTW) employment limit for retirees who continue to draw ERB benefits:
    • Original bill: increase from 36 months to 84 months (consecutive or nonconsecutive).
    • HLVMC amendment (reported out of committee): increases to 60 months (consecutive or nonconsecutive).
  • Leaves other RTW conditions in place, including:
    • A 90-day waiting period after retirement before re-employment with an LAU.
    • Requirement that retirees submit an application to ERB and obtain board approval to return to work.
    • Retirees returning under the RTW rules continue to receive retirement benefits but do not earn additional service credit for that employment.
    • Retirees and employers must continue making nonrefundable ERB contributions during the RTW employment; retirees must also contribute to the retiree health care fund.
    • Salary threshold in existing statute ($15,000/year) is not changed by HB 254 (the HLVMC amendment did not change the earnings cap).
  • Administrative: ERB would need to update policies, procedures and IT systems to implement the extended RTW period.

Who would be affected

  • Primary: ERB retirees who wish to work for public education employers (public schools, charter schools, universities and other LAUs) while continuing to receive retirement benefits.
  • Employers: School districts, charter schools and other LAUs could retain or rehire experienced retired educators and staff for longer periods without triggering suspension of retiree benefits.
  • ERB trust fund: actuarial and fiscal impacts on plan funding and liabilities.

Fiscal impact and actuarial considerations

  • The bill contains no appropriation.
  • Legislative Finance Committee (LFC) estimate for the HLVMC-amended version (60 months) shows an additional recurring negative impact on the ERB Trust Fund estimated at:
    • At least $2,000,000 in FY26
    • At least $2,060,000 in FY27
    • At least $4,060,000 over three years (all figures shown in the LFC fiscal note are in thousands as reported)
  • ERB cautioned that extending RTW limits can have a material negative effect on plan funding; the full effect may take several years to observe. ERB suggested more limited changes (e.g., to 48 or 60 months) or restricting to current participants as mitigation.
  • Constitutional constraint: Article XX, Section 22 of the New Mexico Constitution prohibits enactment of benefit increases without adequate funding; ERB has exclusive authority over actuarial assumptions.

Policy implications

  • Potential benefits: Allows LAUs to leverage retired educators’ experience longer, may help address staffing shortages (substitutes, special education, etc.), and gives retirees additional earning flexibility without losing benefits.
  • Risks: Increased liabilities for ERB and potential negative funding impacts on the retirement trust if not matched with funding or constrained participation.

Legislative status and timeline

  • Sponsors (New Mexico): Rep. Tanya Mirabal Moya; co-sponsors Joy Garratt, Brian G. Baca, Anita Gonzales.
  • Committee action: HLVMC reported an amendment replacing “eighty-four” with “sixty” (vote 10–0) and referred the bill to Appropriations & Finance.
  • Final recorded status (per legislative actions included): Action postponed indefinitely (06/03/2025). The bill was not enacted.

Related legislation

  • SB 133: Proposed raising the RTW earnings cap from $15,000 to $25,000 and extending RTW period to 60 months (overlaps on RTW timing and earnings threshold).
  • Other ERB-related bills in 2025 addressed benefit/administration changes and one-time payments.

If you want, I can:
- Draft a side-by-side comparison of the current statute vs. the HLVMC amendment language, or
- Produce a short explainer focused on fiscal/actuarial risks for ERB trustees and school finance officers.

Compiled from official sources — confirm details with the bill’s official record.

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