Human Resources | Retirement | Educational Retirement Act - Defined Benefit Plan

Educational Retirement Act - Defined Benefit Plan

Highlights

The Educational Retirement Act (ERA) is a defined benefit plan.
The benefit received upon retirement is defined by a prescribed formula based on years of service and an employee's age that may only be altered by the New Mexico State Legislature.
Questions about any of the following can be addressed to the:
- Educational Retirement Board, P.O. Box 26129, Santa Fe, NM 87502-6129 or call 505-827-8030 in Santa Fe or 505-888-1560 in Albuquerque. Additional information can be found at their website at ) http://www.nmerb.org/.

Earned Service Credit

Service credit is earned when you are employed at UNM with an appointment percentage greater than 25%.
Credits are accumulated on a quarterly basis.
Participation in the retirement program is a condition of employment.
The employer's (UNM) contribution for employees with an annual wage over $20,000 is 10.9% of gross earnings, and the employee's tax-deferred contribution is 9.4% of gross earnings. For employees with an annual wage of $20,000 or less, employer contributions are 12.4% of gross earnings, and the employee's tax-deferred contribution is 7.9% of gross earnings.

Allowed Service Credit

*Please view the website for detailed information about Allowed Service Credit.

You may purchase up to five years of allowed service credit if you have been an administrator, teacher, or employee in one of the following:

A public educational system in the United States.
Any U. S. Military Dependent School.
An accredited private school.
A federal education program in New Mexico.

Note: Peace Corps and Job Corps service do not qualify as allowed service credit.

Military Service

You may purchase up to five years of active military service if your payment is made within the first three years of ERA enrollment. The current cost to purchase military service is 10.5% of the member's average annual salary for all years of covered employment for each year purchased.

If you are engaged in the United States Military or the Commissioned Corps of the Public Health Service, you may purchase up to five years of allowed service credit for such service.

You must have received an honorable discharge in order to qualify.
This buy-in provision is available to members within three years following the initial date of employment or re-employment.
You must provide a copy of your DD-214 or other type of military discharge notice.

An application to purchase service credit must be submitted to your prior employer for certification. The application form to purchase out-of-state service is available at the HR Service Center, or on the Educational Retirement Board (ERB) website downloadable forms section.

The cost to purchase allowed service credit is calculated by the ERB and is subject to IRC Section 415(c) limitations. Members can elect to purchase allowed service credit in one of the following ways:

Transfer of retirement contributions from one plan to another as allowed by the IRS.
A lump sum payment to ERB.

Retirement Eligibility

In order to receive an ERB retirement, you must meet one of the following criteria:

If you were hired before July 1, 2010:

Rule of 75: When your age plus the number of years of earned service credit equals 75.
Age 65 if you have a minimum of five years of earned credit.
25 years of earned credit, or a combination of 25 years of earned and allowed service credit.

If you were hired after July 1, 2010:

Rule of 80: When your age plus the number of years of earned service credit equals 80.
Age 67 if you have a minimum of five years of earned credit.
30 years of earned credit, or a combination of 30 years of earned and allowed service credit

Retirement Benefit

The annual benefit is equal to 2.35% of the average of the five (5) highest consecutive years of salary multiplied by the number of years of service (earned and allowed credit).
Benefit may be reduced by election of an option that guarantees continuous income to a surviving beneficiary.
The benefit may also be reduced if the member has less than 25 years service and is less than 60 years of age.

Restoration of contributions

If you have previously withdrawn your ERA contribution, you may restore service credit by paying the amount that you withdrew plus interest, compounded annually from the date of withdrawal to the date of payback.

Beneficiaries

Your beneficiary may be any individual(s) who has a vested interest in your life.

You may change the beneficiary at any time prior to retirement. This can be done on LoboWeb.
In the event of your death, your beneficiary should contact the HR Service Center at 277-MyHR (6947).

Termination/Separation

Upon termination or separation, you may apply for a refund and/or rollover of your ERA contributions*. You are entitled to your contributions plus any interest if the funds have been on deposit with ERA for at least one year. To request a refund or a rollover of your contributions, complete the Request for Refund/Rollover form and submit it to the UNM Payroll department at:

UNM Payroll Department
1700 Lomas Blvd. NE, Suite 1100
Albuquerque, NM 87131

The Request for Refund and/or Rollover Form is available online and at the UNM Payroll. The Unemployment Compensation Amendment of 1992 requires a mandatory 20% withholding of federal taxes on refunds unless the funds are transferred to another custodian or agent using a direct rollover. You have one of the following three options:

Direct Refund
Direct Rollover
Direct Partial Rollover

If you do not rollover the refunded monies into another custodian or agent account using direct rollover (e.g., an IRA), contributions may be subject to a 10% penalty for withdrawal on your income taxes if you are under the age of 59½.

Note: You will not receive any UNM contribution.