New Mexico State, Major City, & Public School Retirement Systems

New Mexico QDRO Preparation PERA is a qualified defined benefit public pension plan covered under § 401(a) of the Internal Revenue Code (IRC). The PERA retirement plan is a governmental plan for purposes of 29 USC § 1002, and is, therefore, exempt from the provisions of the federal Employment Retirement Income Security Act f 1974 and the Retirement Equity Act of 1984. The Public Employees Retirement Act, NMSA § 10-11-1 et seq. and Title 2, § 80 of the New Mexico Administrative Code contain the plan language.

Defined benefit plans pay benefits based on a formula that considers the age of the member, the number of years of service and the final average salary. Unlike a 401(k), which is valued based on the total account balance, in a defined benefit plan, a member’s account balance does not determine his future monthly benefit. Learn more by reading our FAQs below

Public Employees Retirement Association of New Mexico
Santa Fe Office: 33 Plaza La Prensa Santa Fe, New Mexico 87507
Phone: 505-476-9300
Fax: 505-954-0370
Albuquerque Office: 6300 Jefferson St. NE, STE#100 Albuquerque, New Mexico 87109
Phone: 505-383-6550
Fax: 505-954-0370
Toll Free Phone: 800-342-3422

PERA is a defined benefit plan. That means both you and your employer contribute a certain percentage (you from your salary, employer from its funds) towards your retirement. Benefits are paid when certain age and service credit eligibility requirements are met, regardless of the amount of member contributions paid into the plan. Your benefit will also increase if you are eligible for a Cost-of-Living Adjustment (COLA).

QDRO Public Employees Retirement Association of New Mexico
(Order Dividing Retirement Benefits - Based on New Mexico State Law)
Consists of Two Retirement Plans:
  • Public Employees Retirement Association (PERA)
  • State of New Mexico Deferred Compensation Plan (DCP)
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QDRO New Mexico Educational Retirement Board (ERB)
(Order Dividing Retirement Benefits - Based on New Mexico State Law)
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New Mexico Retirement Systems QDRO Checklist

Frequently Asked Questions:

Q. Must New Mexico retirement benefits be divided upon divorce?
A. A court may decide that a former spouse, who is called a co-payee, receives a portion of the member’s benefits. New Mexico is a community property state. PERA benefits are considered community property, and they and valued and divided in a divorce.
Q. Can the court transfer retirement benefits to a former spouse?
A. No. Unless the member spouse terminates his or her employment, a co-payee may receive his or her share of the member’s PERA account only when the member retires. Otherwise, both payee and co-payee receive benefits only when the payee retires.
Q. Must a payee agree to a division of his or her PERA benefits?
A. Couples who divorce, depending on their financial situation and circumstances, sometimes trade retirement benefits for other marital property, so that payee retains ownership of his or her state pension.
Q. Will PERA determine the present value of future retirement benefits?
A. NO. PERA provides a monthly history of the payee’s account balance. For an appraisal of the present value of a pension, the payee must consultant a private actuary, accountant or financial professional.
Q. Can the court order that a former spouse receives a lump sum when the payee retires with a monthly benefit?
A. No. When the payee retires with a monthly benefit, the co-payee also receives a monthly benefit. The duration of the payments to the co-payee depends on the terms of the order dividing the benefit and the form of payment the payee elects. Option A pays benefits to both the payee and co-payee for he duration of the payee’s life. Option B or C, pays benefits only for the life of the payee. Option B or C makes the co-payee the survivor beneficiary, and the co-payee receives benefits for life.
Q. Does a former spouse receive part of the payee’s monthly benefit?
A. Yes. The percent of the community property interest paid to the co-payee reduces the payee’s monthly benefit.
Q. How is this amount determined?
A. Either the spouses agree to an amount or the judge determines it.
Q. Can the co-payee receive benefits before the payee?
A. No. The co-payee receives benefits only when the benefits become payable to the payee. PERA pays benefits only when a member meets the requirements to retire and applies for a pension, or when a member terminates his employment and requests a refund.
Q. If a member remarries, can he or she still elect options B or C, thus designating the current spouse as beneficiary?
A. It depends. The member must comply with the election and form of payment specified in the court order dividing benefits. If the order does not address these, he or she is free to elect any form of payment and designate a survivor beneficiary.
Q. What happens if either the payee or co-payee dies?
A. It depends on the language or the order dividing the PERA benefits. If the co-payee dies before payments begin, normally his or her interest in the gross pension benefits revert to his or her estate. If the member dies prior to retirement and a survivor pension is payable, the co-payee receives his or her share. If not the survivor pension is payable, the co-payee receives his or her share of a refund of accumulated contributions.
Q. Does the co-payee receive cost-of-living increases?
A. Any benefit increases apply to the co-payee’s share of the benefit payment.
Q. Does the co-payee have to pay income tax on PERA retirement benefits?
A. Yes. Federal and state income tax must be paid on the taxable portion of the benefit. PERA can withhold state and federal income tax if the recipient requests it. In January, the retirees and co-payees receive a 1099-R.
Q. Does the payee have to receive pre-approval of the order dividing PERA benefits before the judge signs it?
A. No. PERA requires written approval by the Office of General Counsel before a court-endorsed order dividing retirement benefits can be administered. If PERA receives a court order signed by a judge that does not comply with New Mexico law or PERA rules, the patties must return to court to modify the order.
Q. Can an order dividing PERA benefits be modified?
A. Yes, but it requires another court order to allow for any modifications, and after the first payment is made, law bars certain modifications.
Q. Does PERA accept out-of-state divorce decrees?
A. Yes, provided all the New Mexico requirements for a valid order are in place.
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