Earned Service Credit
Employee members of ERB's Defined Benefit Plan receive service credit for each calendar quarter during which they are employed by an ERB employer and make contributions to that plan. Credit is also granted for service prior to July 1, 1957, the Defined Benefit Plan's effective date.
Members who take a paid sabbatical or leave of absence continue to make contributions and therefore continue to earn service credit. Members who take unpaid sabbaticals or leaves of absence do not earn service credit.
Allowed Service Credit
The Educational Retirement Act allows certain types of service credit to be purchased and credited to a members account. This "allowed" service credit, limited to a total of five years, will be included in the computation of the retirement benefit and counted toward retirement eligibility based on the Rule of 25. Allowed service credit does not apply towards "air time" if you plan to retire under one of the age and service options however, it will apply when calculating retirement under the age and service options. (See "Retirement Eligibility" on page 10 of the member handbook for additional information.)
You may purchase up to five years of service credit if you have service in the US military or worked for any of the following institutions:
- NM private schools that are accredited by the Public Education Department (PED)
- A public or accredited private school, college or university in any other state or territory of the US
- The Federal Educational Service in NM, including Bureau of Indian Affairs schools
Members who can combine military service and any of the other three categories listed above may purchase a maximum of 10 years of service credit (up to five of allowed out of state or private school and up to five of military.)
In order to purchase service credit, you must file an application with the NMERB, and your former employer must verify your employment. Applications are available on the download forms link on this web page.
The cost to purchase service credit is based on an actuarial cost that reflects your length of service and current earnings. Please contact the NMERB to get an estimate of what it would cost you to purchase allowed service credit. You have two options for purchasing allowed service credit:
- You may make a lump-sum payment to the NMERB
- You may roll over or transfer retirement contributions from another retirement plan, including another 401(a) plan, a tax-sheltered annuity 403(b) plan or an IRA, to the NMERB's Defined Benefit Plan to the extent allowed by the Internal REvenue Service (IRS).
You should roll over or transfer funds from the other retirement plan directly to the NMERB to avoid adverse tax consequences. Please consult with a tax advisor on the possible tax effects of a rollover or other transfer. The NMERB cannot provide tax advice and is not responsible for the adverse tax effects of the rollover or transfer method chosen by an individual.
Military Service
Members who previously served in the military or the commissioned corps of the Public Health Service may purchase up to five years of allowed service credit in the Defined Benefit Plan. Service credit for active duty may be purchases after five years of employment by an NMERB-covered entity. The cost to the member is the combined employee and employer contributions at the current rates. To qualify for allowed service credit, you must have received an honorable discharge and provide the NMERB with a copy of your DD-214.
The NMERB is in full compliance with the federal Uniformed Services Employment and Re-Employment Rights Act (USERRA) which ensures that individuals who service in the Armed Forces, Reserves, National Guard or other "uniformed services" are:
- not disadvantaged in their civilian careers because of the service
- promptly re-employed in their civilian jobs upon their return from duty
- not discriminated against in employment based on past, present, or future military service
If you are in the National Guard or Reserves and are called to active duty while employed by an NMERB-covered entity, your pension rights under the Defined Benefit Plan are preserved under the terms of USERRA. This means that for purposes of service credit, you will be treated as if you had no break in employment with he NMERB-covered entity. while you are on active duty, neither you nor your NMERB employer makes contributions to the plan. This "free" military
period relieves you from having to make contributions while you are away from your civilian career.
