Current through Register Vol. 35, No. 18, September 24, 2024
Post-1997 participating employers must pay the applicable
surplus-amount contribution for each NMRHCA fiscal year beginning with FY91
through the fiscal year in which the employer is accepted into the NMRHCA
program.
A. The surplus-amount
contribution for each of the NMRHCA's fiscal years since the inception of the
NMRHCA (Paragraph (2) of Subsection C of 2.81.10.8 NMAC) is calculated by using
either the retiree formula or the active employee formula. On a case by case
basis, the formula which results in the greater contribution payment to the
NMRHCA shall be used to set the surplus-amount contribution of each post-1997
participating employer.
(1)
Retiree
formula: Using this formula, the surplus-amount contribution equals the
surplus amount added to the NMRHCA trust account at the end of the fiscal year
after all bills were paid divided by the number of NMRHCA participating
retirees during that fiscal year and then multiplied by the number of the
post-1997 participating employer's eligible retirees in that fiscal year.
Retiree formula example: Employer opted to become a NMRHCA
participating employer in 1998. In fiscal year 91, the NMRHCA had an applicable
surplus of $9,247.756 and an average of 10,412 participating retirees which
amounts to a FY91 surplus per participating retiree of $888.18. Employer Apple
had 30 employees in FY91 which multiplied by the $888.18 FY 91
surplus/participating retiree equals a surplus-amount contribution of
$26,645.40. Employer Apple must also pay surplus-amount contribution for each
fiscal year between 1990 and date that Employer Apple becomes a participating
employer, which amounts to eight years.
(2)
Active employee formula:
Using this formula, the surplus-amount contribution equals the surplus amount
added to the NMRHCA trust account at the end of the fiscal year after all bills
were paid divided by the number of NMRHCA active employees during that fiscal
year and then multiplied by the number of the post-1997 participating
employer's active employees in that same fiscal year. Active employee
example: Employer Orange opted to become a NMRHCA participating employer
in 1998. In Fiscal Year 1991, the NMRHCA had an applicable surplus of
$9,247.756 and an average of 71,585 active employees which amounts to a surplus
per active employee of $129.19. Employer Orange had 200 employees in FY91 which
multiplied by the $129.19 FY91 surplus/employee equals a surplus-amount
contribution of $25,838.00. Employer Orange must also pay surplus-amount
contributions for each fiscal year between 1990 and date that Employer Orange
becomes a participating employer, which amounts to eight years.
B.
EXTENDED PAYMENTS AND
INTEREST: Post-1997 participating employers may either pay the entire
surplus-amount contribution upon being accepted into the NMRHCA program or
choose to pay the fee over an extended period of time. Post-1997 participating
employers that elect to pay the surplus-amount contribution over time, shall
have no more than 13 years to complete such payments. Interest in the amount of
seven and one-half percent (7.5 %) per annum shall accrue and be charged on all
surplus-amount contribution amounts not paid within 30 days of the employer's
acceptance into the program, except that, on the basis of its unique equitable
circumstances in having submitted its participation petition prior to January
1, 1998, and having been denied participation at that time solely due to its
technical ineligibility, the middle Rio Grande conservancy district,
notwithstanding the other provisions of this section, in paying its
surplus-amount contribution over time, may pay interest at the rate of five
percent (5 %) per annum. The NMRHCA will provide each employer with a payment
schedule of monthly principal/interest payments.
(1) Example 1: Employer opted to become a
participating employer in 1998, Employer Apple owes surplus-amount
contributions for FY91 through FY98. Employer Apple opts to pay the fee over
time and has 13 years to pay the total surplus-amount contribution at the
interest rate of 7.5 % per annum, or at 5 % per annum in the case of the middle
Rio Grande conservancy district. There would be no interest charges if Employer
Apple paid the surplus-amount contribution in full within 30 days of being
accepted into the NMRHCA program.
(2) Subject to approval by the NMRHCA board,
a post-1997 participating employer, may petition to make interest-only payments
for the first-year of the employer's NMRHCA participation. If employer's
petition is approved, the employer will be required to begin making normal
principal and interest payments at the end of the first year of NMRHCA
participation.
C. The
NMRHCA trust fund surplus amounts for past years (through FY97) are as follows:
Fiscal Year 91 = $888.18 per retiree (Paragraph (2) of
Subsection C of 2.81.10.8 NMAC) $129.19 per active employee.
Fiscal Year 92 = $679.54 per retiree - $102.19 per active
employee.
Fiscal Year 93 = $358.76 per retiree - $ 56.73 per active
employee.
Fiscal Year 94 = $801.74 per retiree - $137.41 per active
employee.
Fiscal Year 95 = $713.84 per retiree - $132.82 per active
employee.
Fiscal Year 96 = $887.07 per retiree - $174.64 per active
employee.
Fiscal Year 97 = $993.61 per retiree - $213.07 per active
employee.
(1) The annual surplus
amounts shall be calculated by the NMRHCA annually and made public by July 30th
of each year or as soon as possible.
(2) In calculating the trust fund surplus for
fiscal year 91, all employer and employee contributions received prior to
December 31, 1990 were not included.
D. The post-1997 participating employer can
determine the percentage of the surplus-amount contributions and interest to be
paid by its employees, provided that the employees' percentage does not exceed
one-third of the total amount.
E.
Notwithstanding and in lieu of Subsection A, post 2006 participating employers
must pay the actuarial accrued liability associated with their participating
retirees and active employees determined in accordance with the statements of
the governmental accounting standards board (GASB).
(1) Such calculation shall be performed by
the NMRHCA actuary utilizing the same methodology and assumptions as the last
valuation performed for GASB reporting purposes, except that the discount rate
shall be 7.75% regardless of the rate utilized by the actuary for other
purposes.
(2) In addition, the post
2006 participating employer must pay a fee not to exceed $10,000 at the time of
petitioning for membership in NMRHCA for the purpose of defraying the cost of
the actuarial valuation required to establish the amount due as the surplus
amount calculation, and must provide all necessary participant data on active
and retired employees necessary to perform the valuation.
