N.M. Stat. § 22-11-13 (2026)

standard; indemnification of board.
   A. The board is authorized to invest or reinvest the fund in accordance with the
Uniform Prudent Investor Act [45-7-601 to 45-7-612 NMSA 1978].

    B. The board shall provide quarterly performance reports to the legislative finance
committee and the department of finance and administration. Annually, the board shall
ratify and provide its written investment policy, including any amendments, to the
legislative finance committee and the department of finance and administration.
    C. The board or its designated agent may enter into contracts for the temporary
exchange of securities for the use by broker-dealers, banks or other recognized
institutional investors, for periods not to exceed one year, for a specified fee or
consideration. Such a contract shall not be entered into unless the contract is fully
secured by a collateralized, irrevocable letter of credit running to the board, cash or
equivalent collateral of at least one hundred two percent of the market value of the
securities plus accrued interest temporarily exchanged. This collateral shall be delivered
to the fiscal agent of New Mexico or its designee contemporaneously with the transfer of
funds or delivery of the securities. Such contract may authorize the board to invest cash
collateral in instruments or securities that are authorized fund investments and may
authorize payment of a fee from the fund or from income generated by the investment of
cash collateral to the borrower of securities providing cash as collateral. The board may
apportion income derived from the investment of cash collateral to pay its agent in
securities lending transactions.

   D. Commissions paid for the purchase or sale of any securities pursuant to the
provisions of the Educational Retirement Act shall not exceed brokerage rates
prescribed and approved by national stock exchanges or by industry practice.

    E. Securities purchased for the fund shall be held in the custody of the state
treasurer. At the direction of the board, the state treasurer shall deposit with a bank or
trust company the securities for safekeeping or servicing.

     F. The board may consult with the state investment council or the state investment
officer; may request from the state investment council or the state investment officer any
information, advice or recommendations with respect to investment of the fund; may
utilize the services of the state investment council or the state investment officer; and
may act upon any advice or recommendations of the state investment council or the
state investment officer. The state investment council or the state investment officer
shall render investment advisory services to the board upon request and without
expense to the board. The board may also employ the investment management
services and related management services of a trust company or national bank
exercising trust powers or of an investment counseling firm or brokers for the purchase
and sale of securities, commission recapture and transitioning services and may pay
reasonable compensation for those services from funds administered by the board.

    G. The board shall annually provide for its members no less than eight hours of
training in pension fund investing, fiduciary obligations or ethics. A member elected or
appointed to the board who fails to attend the training for two consecutive years shall be
deemed to have resigned from the board.

    H. Members of the board, including any designee authorized by Paragraph (1) or (2)
of Subsection B of Section 22-11-3 NMSA 1978, jointly and individually, shall be
indemnified from the fund by the state from all claims, demands, suits, actions,
damages, judgments, costs, charges and expenses, including court costs and attorney
fees, and against all liability, losses and damages of any nature whatsoever that
members shall or may at any time sustain by reason of any decision made in the
performance of their duties pursuant to this section.

History: 1953, Comp., § 77-9-13, enacted by Laws 1967, ch. 16, § 137; 1969, ch. 203,
§ 1; 1970, ch. 81, § 3; 1975, ch. 211, § 5; 1987, ch. 71, § 1; 1989, ch. 22, § 1; 1993, ch.
69, § 3; 2001, ch. 190, § 1; 2005, ch. 240, § 6; 2009, ch. 288, § 13; 2011, ch. 160, § 2.

                                     ANNOTATIONS

Cross references. — For applicability of insurance or banking laws to administration of
article, see 22-11-43 NMSA 1978.

For the federal Investment Company Act of 1940, see 15 U.S.C. § 80a-1 et seq.

For the legislative finance committee, see 2-5-1 NMSA 1978.

For the department of finance and administration, see 9-6-3 NMSA 1978.

The 2011 amendment, effective June 17, 2011, provided for the indemnification of
designees appointed by the secretary of education and the state treasurer.

The 2009 amendment, effective July 1, 2009, added Subsection G.

The 2005 amendment, effective July 1, 2005, deleted former Subsections A(1) through
(10), which provided the classes of securities and investments in which the retirement
board could invest and reinvest funds; added Subsection A to authorize the board to
invest and reinvest the fund in accordance with the Uniform Prudent Investor Act; added
Subsection B which provided that the board shall provide reports and investment
policies to the legislative finance committee and the department of finance and
administration; deleted former Subsection D, which provided that the prudent man rule
applies to investment of the fund; deleted the former provision of Subsection F, which
provided that the board may employ investment advisory services and investment
management services; and in Subsection F, provided that the board may employ the
investment management services and related management services of a trust company
or national bank exercising trust powers or an investment counseling firm or brokers for
the purchase and sale of securities, commission recapture and transitioning services
and may pay for the services from funds administered by the board.

The 2001 amendment, effective June 15, 2001, in Paragraphs A(5) and A(7),
substituted "debentures, instruments, conditional sales agreements, securities or other
evidence of indebtedness of any corporation, partnership or trust" for "or commercial
paper of any corporation", inserted "or any security convertible to common stock"
following "common stock", inserted "partnership or trust" preceding "organized", and
deleted "that the corporation shall have a minimum net worth of twenty-five million
dollars ($25,000,000); and provided" preceding "that the fund shall not"; and in
Paragraph A(10), deleted "and which has net assets of at least twenty-five million
dollars ($25,000,000)" following "United States".

The 1993 amendment, effective June 18, 1993, rewrote this section to the extent that a
detailed comparison is impracticable.

The 1989 amendment, effective March 10, 1989, in Subsection B, added "or
consideration" at the end of the first sentence and added the fourth and fifth sentences.

Reimbursement for expenses of privately retained attorney. — The indemnification
authorized by Subsection H of Section 22-11-13 NMSA 1978 applies only when legal
representation is not available under the Tort Claims Act, Section 41-4-1 NMSA 1978 et
seq., or by the attorney general’s office. 2010 Op. Att’y Gen. No. 10-05.

Where a member of the educational retirement board retained an attorney to represent
the board member personally in a lawsuit under the Fraud Against Taxpayers Act,
Section 44-9-1 NMSA 1978 et seq., and in connection with a securities and exchange
commission investigation and the risk management division of the general services
department assigned or made counsel available to represent the board member, the
state was not required to reimburse the board member for expenses resulting from
retaining private counsel. 2010 Op. Att’y Gen. No. 10-05.

Reimbursement for expenses of public relations firm. — Where a member of the
educational retirement board, who was a defendant in lawsuit under the Fraud Against
Taxpayers Act, Section 44-9-1 NMSA 1978 et seq., and the subject of an investigation
by the securities and exchange commission, personally incurred expenses for advice
and consultation provided by a public relations firm; the board member did not incur the
expense of hiring a public relations firm because of the board member’s decisions as an
educational retirement board member; and the board member incurred the expense as
a result of the board member’s independent, personal decision that the board member
required the services of the public relations firm, the state was not required to reimburse
the board member for the cost of hiring the public relations firm. 2010 Op. Att’y Gen. No.
10-05.

Indemnification of an entity owned by a board member. — Indemnification is not
allowed under Subsection H of Section 22-11-13 NMSA 1978 where an entity in which
an educational retirement board member has an ownership interest is sued as a result
of decisions made by the board member as a member of the educational retirement
board. 2010 Op. Att’y Gen. No. 10-05.

Indemnification in criminal matters. — Indemnification is allowed under Subsection H
of Section 22-11-13 NMSA 1978 where an educational retirement board member is
charged with a crime provided that the charges result from a decision the member made
in the performance of the board member’s duties and the board member successfully
defends against the charges. Indemnification for expenses incurred by a board member
in a criminal defense should be strictly limited to reimbursement. 2010 Op. Att’y Gen.
No. 10-05.

Authority to implement Subsection H. — The powers granted the educational
retirement board by Subsections A and E of Section 22-11-6 NMSA 1978 and
Subsection B of Section 22-11-14 NMSA 1978 provide sufficient authority to the
educational retirement board to implement Subsection H of Section 22-11-13 NMSA
1978. 2010 Op. Att’y Gen. No. 10-05.

The educational retirement board has the right and duty to approve attorneys who
represent board members under Subsection H of Section 22-11-13 NMSA 1978. 2010
Op. Att’y Gen. No. 10-05.

Fiduciary duty with regard to indemnification of board members. — The
educational retirement board has the fiduciary duty to implement and apply Subsection
H of Section 22-11-13 NMSA 1978 so that any expenditures made from the educational
retirement fund to indemnify educational retirement board members are reasonable,
necessary and appropriate. 2010 Op. Att’y Gen. No. 10-05.