Members of the NMERB system contribute a set percentage amount of their total earnings that are deducted before taxes from each payroll check. Earnings covered include all salary remuneration to the member for services rendered whether included under a contract or not.
Not covered for contribution purposes are reimbursements, lump-sum payments for unused, accrued sick leave and early retirement incentive payments.
The employer (school board, institution of higher learning, state agency, etc.) also contributes a set percentage amount of a member's total salary. .
Contributions made by the member after July 1, 1983 are deferred from federal income tax based upon a ruling by the Internal Revenue Service. Member contributions are exempt from taxes by the State of New Mexico as well. (Section 414 (h)(2) of the IRS Code). The contributions will be taxed when the member terminates employment and begins receiving a benefit as either a one-time refund or a lifetime retirement benefit.
Click here to see the current contribution rates.