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NM Extends Deadlines for Work and Save Act

Legislation

The implementation deadline for the Land of Enchantment’s retirement plan marketplace and the state’s Work and Save IRA program has been extended to July 1, 2024. 

Background

On Feb. 26, 2020, Gov. Michelle Lujan Grisham (D) signed the New Mexico Work and Save Act into law, creating the New Mexico Work and Save program. The measure gave the New Mexico Work and Save Board—the body that is to set up and oversee the program under the aegis of the state Treasurer’s office—until July 1, 2021 to put the New Mexico Retirement Plan Marketplace in place, and until Jan. 1, 2022 to make it available for covered employees to begin making contributions.
 

Pandemic’s Impact

According to the Legislative Finance Committee (LFC) for standing finance committees of the New Mexico legislature, the Work and Save Board reports that—largely because the pandemic delayed its work—it cannot meet the implementation timelines the New Mexico Work and Save Act set. 

Subsequently, State Sen. Bill Tallman (D-Bernalillo) introduced SB 129, the Amending Work and Save Act. The Senate passed it in a 28-12 vote on March 2, 2021, and the House of Representatives followed suit on March 20 in a 54-16 vote. Grisham signed it into law on April 5. 

What the Measure Does 

In addition to postponing the implementation deadline, SB129 amends the Work and Save Act to state that the Work and Save Board: 

  • shall not directly or indirectly manage or maintain the funds and instead will contract with appropriate financial service providers to manage and maintain the funds and accounts of a program participant; 
  • is covered against claims arising under the Work and Save Act pursuant to the provisions of the Tort Claims Act; and 
  • is authorized to procure other insurance for liability and indemnification as needed. 

SB129 also amends the Amending Work and Save Act to:

  • remove provisions for a blanket surety bond; 
  • clarify board members and employees of the board shall act as fiduciaries regarding the design, implementation and oversight of the New Mexico Retirement Plan Marketplace and the Work and Save IRA program; 
  • ensure each board-approved financial service provider submit and provide annual reports to the board regarding the number of program participant accounts maintained by the financial service provider and the overall value of those accounts; 
  • clarify covered employers are not responsible for the performance of a specific savings option selection made by a program participant and facilitated through the program; 
  • add a new section to clarify that the board, each board member and the state are not guaranteeing any rate of return or interest rate on contributions made by participants in the program; and 
  • give the board more flexibility in implementing the program by deleting the previous deadlines of July 2021 and January 2022. 

There is no effective date for SB129. The LFC assumes that the effective date is 90 days after the legislature adjourns.