NMSA 1978, § 10-7A-1 Short title
10-7A-1. Short title
Sections 1 through 10 [10-7A-1 to 10-7A-10 NMSA 1978] of this act may be cited as the "Deferred Compensation Act".
Laws 1981, ch. 155, § 1.
Deferred Compensation
NMSA 1978 ch. 10, art. 7A
in effectNMSA 1978, § 10-7A-2 Definitions
10-7A-2. Definitions
As used in the Deferred Compensation Act:
A. "board" means the public employees retirement board;
B. "local public body" means all political subdivisions of the state, their agencies, instrumentalities and institutions;
C. "local public employee" means any officer or employee to whom a local public body pays a salary for services rendered;
D. "deferred compensation carriers" means any corporation, partnership or persons providing administrative, recordkeeping or investment consulting services to participants in deferred compensation plans pursuant to funding agreements; and
E. "state employee" means any officer or employee to whom the state pays a salary for services rendered.
Laws 1981, ch. 155, § 2; 1985, ch. 161, § 1; 2017, ch. 20, § 1.
NMSA 1978, § 10-7A-3 Deferred compensation plan; state and local public employees
10-7A-3. Deferred compensation plan; state and local public employees
A. After the effective date of the Deferred Compensation Act, the board shall review and approve deferred compensation plans for participation by state and local public employees. A deferred compensation plan shall provide for the method of transfer of funds to a plan through written or electronic salary reduction agreements with state and local public employees and shall provide for deferral of only those salary amounts upon which income taxes are eligible for deferral pursuant to federal law.
B. Compensation deferred under any deferred compensation plan shall be included with current income for purposes of computing retirement contributions and benefits.
C. Amounts by which salary is reduced shall be transmitted to the approved deferred compensation carrier.
D. Local public employees may participate in a deferred compensation plan selected by their local public body employer after it takes formal action conforming to board requirements. If the plan selected is different from the plan approved by the board, the board shall have no responsibility concerning the plan. If the plan selected is that approved by the board pursuant to Section 10-7A-5 NMSA 1978, the provisions of Section 10-7A-8 NMSA 1978 shall apply.
1978 Comp., § 10-7A-3, enacted by Laws 1984, ch. 127, § 988.1; 1985, ch. 161, § 2; 2017, ch. 20, § 2.
NMSA 1978, § 10-7A-4 Deferred compensation plan; other participants
10-7A-4. Deferred compensation plan; other participants
The deferred compensation plan may allow persons other than public employees, who provide services to the state or any local public body, to participate in the plan to the extent permitted by federal law.
Laws 1981, ch. 155, § 4.
NMSA 1978, § 10-7A-5 Deferred compensation plan; approval
10-7A-5. Deferred compensation plan; approval
A. The board shall review proposals providing investment options to participants of a deferred compensation plan submitted by deferred compensation carriers that have been engaged for a minimum of three years in the business of funding public employee deferred compensation plans authorized by 26 U.S.C. Section 457 and approve proposals that are consistent with the goals of providing state or local public employees with an investment that, in the opinion of the board, is safe and will provide a reasonable return to the employees upon their reaching the appropriate age or date at which they may begin receiving funds from the deferred compensation plan.
B. The type of deferred compensation investment options that may be approved include mutual funds, including stock, bond or capital preservation funds or any other investments determined by the board to fulfill the goals of providing viable deferred compensation for state or local public employees.
1978 Comp., § 10-7A-5, enacted by Laws 1984, ch. 127, § 988.2; 1985, ch. 161, § 3; 2017, ch. 20, § 3.
NMSA 1978, § 10-7A-6 Deferred compensation plans; investment options
10-7A-6. Deferred compensation plans; investment options
The board may select a deferred compensation plan that offers varied investment options to participating employees.
Laws 1981, ch. 155, § 6; 1985, ch. 161, § 4.
NMSA 1978, § 10-7A-7 Deferred compensation plan; state tax deferral
10-7A-7. Deferred compensation plan; state tax deferral
Income deferred pursuant to the Deferred Compensation Act and any gains arising from such income, shall be subject to New Mexico income tax and other applicable taxes in the same year or years in which the income is subject to federal income tax pursuant to federal law.
Laws 1981, ch. 155, § 7.
NMSA 1978, § 10-7A-8 Deferred compensation plan; local public employee participation
10-7A-8. Deferred compensation plan; local public employee participation
A. Local public employees shall be eligible to participate in a deferred compensation plan approved by the board upon the filing of a local public body's participation agreement, conforming to board requirements, applicable to its local public employees and such other participants permitted by the plan as the local public body may elect. Such filing shall be made at such dates and places and in such manner as the board requires.
B. A local public body may terminate its local public employees' and other qualified participants' future participation in a board-approved plan any time not less than two years after the date participation has become effective, upon the local public body's filing of written or electronic notice conforming to board requirements.
Laws 1981, ch. 155, § 8; 1985, ch. 161, § 5; 2017, ch. 20, § 4.
NMSA 1978, § 10-7A-9 Existing deferred compensation plans
10-7A-9. Existing deferred compensation plans
Any state or local public body deferred compensation plan in existence on the effective date of the Deferred Compensation Act shall not be affected and may be made available to employees and other persons of the state agency or local public body which had adopted said deferred compensation plan on the same basis as on the effective date of the Deferred Compensation Act. Funds of existing plans may be invested in all or any combination of the investments set forth in Subsection B of Section 10-7A-5 NMSA 1978.
Laws 1981, ch. 155, § 9; 1983, ch. 251, § 3.
NMSA 1978, § 10-7A-10 Expenditure
10-7A-10. Expenditure
Any expenditure necessary to implement the Deferred Compensation Act shall be charged to participating employees or to deferred compensation carriers including those submitting proposals.
Laws 1981, ch. 155, § 10; 1985, ch. 161, § 6.
NMSA 1978, § 10-7A-11 Rule making; agreements
10-7A-11. Rule making; agreements
The board may adopt such rules and enter into such agreements as may be necessary to implement the Deferred Compensation Act; provided, however, that any expenditures associated therewith are charged as provided in Section 10-7A-10 NMSA 1978.
1978 Comp., § 10-7A-11, enacted by Laws 1985, ch. 161, § 7.
NMSA 1978, § 10-7A-12 Division of funds as community property; notice requirement
10-7A-12. Division of funds as community property; notice requirement
A court of competent jurisdiction, solely for the purposes of effecting a division of community property, may provide by appropriate order for a determination and division of a community interest in the deferred compensation plan provided for in the Deferred Compensation Act. Pursuant to such a court order a deferred compensation administrator shall provide notice, within ten days after a participating public employee files an application for a disbursement from the deferred compensation plan, to a former spouse who has a court-determined interest in a participating public employee's deferred compensation plan. The notice shall be sent to the last name and address the former spouse has filed with the administrator of the deferred compensation plan and shall include the schedule for and amounts of the disbursement and the address to which the participating public employee's disbursement will be sent.
1978 Comp., § 10-7A-12, enacted by Laws 1991, ch. 22, § 1.
Source: New Mexico Compilation Commission (nmonesource.com)URL: https://nmonesource.com/nmos/nmsa-unanno/en/item/18510/index.doFetched: 10/20/2026