TITLE 2 PUBLIC FINANCE
CHAPTER
85 DEFERRED COMPENSATION
PART
100 GENERAL PROVISIONS
2.85.100.1 ISSUING AGENCY: Public Employees Retirement Association
[10-15-97; 2.85.100.1 NMAC - Rn, 2 NMAC
85-100.1, 12-28-00]
2.85.100.2 SCOPE: This rule affects participants and the
deferred compensation third party administrator under the Deferred Compensation
Act.
[10-15-97; 2.85.100.2 NMAC - Rn, 2 NMAC
85-100.2, 12-28-00; A, 1-31-02]
2.85.100.3 STATUTORY AUTHORITY: This rule is authorized by NMSA 1978, Section
10-7A-11.
[10-15-97; 2.85.100.3 NMAC - Rn, 2 NMAC
85-100.3, 12-28-00]
2.85.100.4 DURATION: Permanent.
[10-15-97; 2.85.100.4 NMAC - Rn, 2 NMAC
85-100.4, 12-28-00]
2.85.100.5 EFFECTIVE DATE: December 29, 1989 unless a different date is
cited at the end of a section.
[10-15-97; 2.85.100.5 NMAC - Rn, 2 NMAC
85-100.5, 12-28-00]
2.85.100.6 OBJECTIVE: The objective of this rule is to establish
standards and procedures for handling withdrawal applications for financial
hardship.
[10-15-97; 2.85.100.6 NMAC - Rn, 2 NMAC
85-100.6, 12-28-00]
2.85.100.7 DEFINITIONS: [Reserved]
[2.85.100.7 NMAC - Rn, 2 NMAC 85-100.7,
12-28-00]
2.85.100.8 GENERAL PROVISIONS
A. Unforeseeable emergency withdrawal
applications. The deferred compensation
third party administrator shall handle the processing of unforeseeable
emergency withdrawal applications including, but not limited to:
(1) sending out withdrawal applications;
(2) answering questions on the process and
rules;
(3)
reviewing applications for completeness and compliance;
(4) making decisions concerning whether or not
withdrawal applications are approved;
(5) sending appropriate notices to
participants (approved or denied);
(6) sending detailed denial letters explaining
specific reason(s) why application was denied and instructions for
reapplication and notice of the right to appeal, if any.
B. Appeals. Appeals of denials of applications for
unforeseeable emergency withdrawals, if any, shall be handled by the deferred
compensation third party administrator.
The deferred compensation third party administrator shall also maintain
files on approvals/denials and provide regular reports to the board on
unforeseeable emergency activity.
C. Unforeseeable emergency. In the event of an unforeseeable emergency, a
participant may request that benefits be paid to him or her immediately,
provided, however, that payment of any such benefits after the elected or
mandatory commencement date shall be subject to any limitations specified by an
investment carrier. Such request shall be filed with the third party
administrator. If the third party
administrator determines that the application for unforeseeable emergency meets
the standards of the internal revenue service guidelines and the plan document,
payment will be made within twenty-four (24) hours of such approval. Benefits to be paid shall not exceed the
lesser of (i) the amount reasonably needed to satisfy the emergency need, which
may include any amounts necessary to pay any federal, state, or local taxes, or
(ii) an amount which, together with any prior distribution or withdrawal, does
not exceed the value of the participant’s plan benefit determined as of the
most recent valuation date. An amount
will not be considered to be reasonably needed to meet the financial need
created by an unforeseeable emergency to the extent that such need is or may be
relieved:
(1) through reimbursement or compensation by
insurance or otherwise;
(2) by liquidation of the participant's
assets, to the extent the liquidation of such assets would not itself cause
financial hardship; or
(3) by cessation of deferrals under the plan.
D. Matters not constituting unforeseeable emergencies. Divorce or foreseeable personal expenditures
normally budgetable, such as a down payment on a home, the purchase of an
automobile, college or other educational expenses, etc., will not constitute an
unforeseeable emergency.
[10-15-97;
2.85.100.8 NMAC - Rn, 2 NMAC 85.100.8, 12-28-00; A, 8-15-01; A, 1-31-02; A,
9-30-03]
2.85.100.9 ADOPTION OF PLAN: In accordance with the Deferred Compensation
Act, the board shall adopt and amend a deferred compensation plan. The plan shall comply with the requirements
of Internal Revenue Code Section 457, as amended, and may be amended to include
provisions that allow for trustee-to-trustee transfers and rollovers into and
out of the plan.
[2.85.100.9 NMAC - N, 12-28-01]
HISTORY
of 2.85.100 NMAC:
Pre-NMAC
History: The material in this part was derived from
that previously filed with the State Records Center and Archives under:
DC
Rule 100, Financial Hardship, filed on 12-29-89.