July 17, 2012 – Blanca Martinez v. Public Employees Retirement Association of New Mexico, and Public Employees Retirement Board, No. 31,310

IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number:
Filing Date: July 17, 2012
NO. 31,310
BLANCA MARTINEZ,
Plaintiff-Petitioner,
v.
PUBLIC EMPLOYEES RETIREMENT
ASSOCIATION OF NEW MEXICO,
and PUBLIC EMPLOYEES RETIREMENT
BOARD,
Defendants-Respondents.
APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY
Raymond Z. Ortiz, District Judge
The Pickett Law Firm, LLC
Mark L. Pickett
Las Cruces, NM
for Petitioner
Charles Rennick, LLC
Charles Rennick
Santa Fe, NM
for Respondents

OPINION
BUSTAMANTE, Judge.
{1} 	Blanca Martinez appeals from a district court decision upholding the Public
Employees Retirement Board’s conclusion that (1) she had no absolute entitlement to
survivor benefits under her deceased husband’s retirement plan with the Public
Employees Retirement Association, and (2) she had not substantially complied with
the statutory requirement to apply for survivor benefits within one year of her
husband’s death. 	We hold that Mrs. Martinez did not have an interest in her
husband’s retirement benefits after his death other than a statutorily created property
interest in survivor benefits. 	We also hold that the time limit and documentation
requirements in NMSA 1978, Section 10-11-14.5(A) (1997) are rationally related to
a legitimate government interest and did not unconstitutionally deprive Mrs. Martinez
of her interest in survivor benefits. 	Finally, we hold that Mrs. Martinez did not
substantially comply with the statutory requirements so as to excuse her failure to
strictly comply. We thus affirm.
I. 	BACKGROUND
A. 	Factual Background
{2} 	Blanca Martinez’s husband, Marco Martinez, died of a sudden heart attack on
March 8, 2007. He was 47 years old. At the time of his death, he had worked for the

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New Mexico Department of Corrections for seven years. Mr. Martinez was enrolled
in the Public Employees Retirement Association (PERA) and contributed to his PERA
account throughout his employment with the State of New Mexico. Mrs. Martinez
was his designated beneficiary for both survivor benefits and refund of contributions.
{3} 	On May 30, 2007, Mrs. Martinez sent a letter to PERA notifying them of her
husband’s death. 	She enclosed a copy of the death certificate and mentioned “the
PERA survivor pension referenced on page 23 of the PERA member handbook.” Her
letter requested that PERA send her “any paperwork [she] need[ed] to complete to
receive this survivor pension.” The letter prompted PERA to conduct an audit of Mr.
Martinez’s file to determine what, if any, benefits were due to his beneficiaries. On
June 5, 2007, PERA sent Mrs. Martinez a letter stating that “PERA [was] conducting
an audit on Mr. Marco Martinez’[s] retirement file to determine the amount of
monthly retirement benefits that are payable to [her].” On June 27, 2007, PERA sent
Mrs. Martinez another letter. 	In this letter, PERA requested that Mrs. Martinez
complete and return the enclosed “Application for Survivor Retirement Annuity.”
There was no mention of a deadline for submission of this form and/or supporting
documents. Although the letter states that a copy of the relevant section of the Public
Employees Retirement Act, see NMSA 1978, Sections 10-11-1 to -142 (1987, as

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amended through 2012) (the Act), was enclosed, Mrs. Martinez maintains that no such
document was included. The letter also stated that, as a designated beneficiary, Mrs.
Martinez would “receive the calculated amount . . . shown on the attached form. This
estimate is based on factors such as the final average salary, service credit and
eligibility rules for the applicable coverage plan for the deceased member at the time
of death.” Finally, the letter stated that Mrs. Martinez would “be placed on the payroll
retroactive to 04/01/2007” once the paperwork is complete. Included with the letter
was a form showing the calculation of Mrs. Martinez’s benefits ($768.72 per month).
{4} 	Mrs. Martinez completed the application for survivor annuity on August 3,
2007, but testified that she did not send it to PERA because she was busy with other
matters related to her husband’s estate and uncertain about how to complete it since
there was an ongoing investigation into the cause of her husband’s death. 	She
testified that she “might have known about [the one year deadline for application for
benefits],” but she had “other things . . . to do” related to her husband’s death. On
May 12, 2009, two years and two months after Mr. Martinez’s death, PERA notified
Mrs. Martinez by mail that she had failed to submit the application for survivor
annuity within one year of her husband’s death and, therefore, she was “no longer
eligible for a survivor benefit.” 	On November 12, 2009, Mrs. Martinez, through

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counsel, submitted the application for survivor annuity and requested that PERA
accept it in light of the circumstances of her case. PERA denied this request by letter
on November 17, 2009, stating, “we are unable to allow you to receive survivor
benefits” because “you did not comply with the statutory one[-]year requirement.”
B. 	Procedural Background
{5} 	Mrs. Martinez appealed PERA’s decision pursuant to 2.80.1500 NMAC
(10/15/1997) (amended 9/30/10). After a hearing, the hearing officer concluded that
Mrs. Martinez did not have a “statutory right or entitlement” to the survivor pension,
that an application that satisfied the requirements of Section 10-11-14.5(A), including
the one-year deadline, was required to access benefits, and that PERA has no power
to “waive or to ignore the statutory time limit for filing an Application for Survivor
Pension.” 	Mrs. Martinez filed exceptions to the hearing officer’s recommended
decision and requested that the Public Employees Retirement Association Board
(PERA Board) review the entire record. 	The hearing officer responded to Mrs.
Martinez’s exceptions and reasserted his recommended decision. The PERA Board
reviewed the appeal, accepted the hearing officer’s recommended decision, and found
that “the relief requested in this appeal cannot be granted by PERA.”
{6} 	Mrs. Martinez appealed the PERA Board’s decision to the district court. The
district court found that Mr. Martinez’s benefits had vested in him, but not in Mrs.

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Martinez, “thereby according her no right or entitlement to said retirement benefits.”
The court found that the one-year period for filing for survivor benefits in Section 10-
11-14.5(A) “operat[es] in the nature of a statute of limitations,” and that Mrs.
Martinez’s failure to file the application within the year after her husband’s death
made her ineligible to receive a survivor pension, but is entitled to either a refund or
a rollover of the member contributions of her deceased husband. See § 10-11-117(E)
(“If all pension payments permanently terminate before there is paid an aggregate
amount equal to the retired member’s accumulated member contributions at the time
of 	retirement, 	the 	difference 	between 	the 	amount 	of 	accumulated 	member
contributions and the aggregate amount of pension paid shall be paid to the retired
member’s refund beneficiary. If no refund beneficiary survives the retired member,
the difference shall be paid to the estate of the retired member.”). PERA’s “Refund
Beneficiary Designation” form states “If I die and no pension is payable under the
PERA Act, I designate the person named below as my refund beneficiary to receive
the refund of my member contributions.” 	The court affirmed the decision of the
PERA Board. Mrs. Martinez filed a petition for writ of certiorari that was granted by
this Court.

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II. 	DISCUSSION
{7} 	Mrs. Martinez raises two issues on appeal: (1) whether Section 10-11-14.5(A)
unconstitutionally deprives Mrs. Martinez of a fundamental property right, and (2)
whether Mrs. Martinez substantially complied with PERA’s requirements for
application for survivor benefits. 	In their briefs, both parties address the latter
question last. 	Because the answer to this question could resolve this case without
resorting to the constitutional questions raised, we address it first.
A. 	Mrs. Martinez Did Not Substantially Comply with Section 10-11-14.5(A)
1. 	Standard of Review
{8} 	Generally, this Court applies the same standard of review as the district court
and reviews an administrative order to determine whether the order is “arbitrary,
capricious, or an abuse of discretion; not supported by substantial evidence in the
record; or, otherwise not in accordance with law.” Rio Grande Chapter of the Sierra
Club v. N.M. Mining Comm’n, 2003-NMSC-005, ¶ 17, 133 N.M. 97, 61 P.3d 806; see
NMSA 1978, Section 39-3-1.1(D) (1999); § 10-11-120(B). Questions of substantial
compliance with a statute depend on statutory construction, however, and we review
those questions de novo. See Stennis v. City of Santa Fe (Stennis I), 2008-NMSC-008,
¶ 13, 143 N.M. 320, 176 P.3d 309 (“Interpretation of . . . statutes is a question of law
that we review de novo.”); State ex rel. Solsbury Hill, LLC v. Liberty Mut. Ins. Co.,

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2012-NMCA-032, ¶ 27, 	N.M. 	, 273 P.3d 1 (stating that the issue of substantial
compliance is one of statutory construction which is subject to de novo review).
2. 	Analysis
{9} 	Mrs. Martinez contends that her claim for survivor benefits should not be barred
because she substantially complied with the statute’s requirements by sending a letter
and the certificate of death within three months of her husband’s death. Section 10-
11-14.5(A) states:
A survivor pension may be paid to certain persons related to or
designated by a member who dies before normal or disability retirement
if a written application for the pension, in the form prescribed by the
association, is filed with the association by the potential survivor
beneficiary or beneficiaries within one year of the death of the member.
(Emphasis added). 	Mrs. Martinez argues that (1) the purpose of Section 10-11-
14.5(A) is to give PERA notice of a claim and the May 30, 2007, letter met that
purpose; and (2) the purpose of the one-year limit is unknown and, therefore, a finding
that she substantially complied with the requirements of Subsection A does not
undermine the statute’s purpose. Mrs. Martinez contends that the May 30, 2007, letter
notifying PERA of her husband’s death contained sufficient information, such as his
social security number and date of birth, for PERA to (1) identify his file and
determine whether his benefits had vested, (2) verify his pay, (3) know that Mrs.
Martinez sought payment of her survivor’s benefits, and (4) calculate Mrs. Martinez’s

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monthly survivor benefits. She maintains that the fact PERA acted on the letter in
much the same way it would have on receipt of the application for survivor annuity
shows that she substantially complied with the requirements of Subsection A.
{10} 	PERA counters that the “purpose of the requirements is to ensure accuracy, to
identify potential minor beneficiaries, and to deter fraud by virtue of requiring official
documents and sworn statements,” as well as to “ensure the actuarial viability of the
trust fund.” 	PERA argues that the statute’s one-year requirement is mandatory
because it is “consistent with the actuarial nature of the trust fund.” 	The one-year
requirement also prevents PERA from having to manage and plan for applications for
survivor benefits that are submitted “5, 10, 15[,] even 20 years” after the death of a
member.
{11} 	The parties do not dispute that Mrs. Martinez did not comply strictly with
Subsection A. 	Stennis v. City of Santa Fe (Stennis II), 2010-NMCA-108, ¶ 9, 149
N.M. 92, 244 P.3d 787 (“Strict compliance means that the statutory provision at issue
must be followed precisely.”). Instead, Mrs. Martinez argues that her actions were
sufficient to substantially comply with the requirements. 	When a party claims
substantial compliance, “a court should determine whether the statute has been
followed sufficiently so as to carry out the intent for which the statute was adopted
and accomplishes the reasonable objectives of the statute.” Vaughn v. United Nuclear

9
Corp., 98 N.M. 481, 485, 650 P.2d 3, 7 (Ct. App. 1982); see Stennis II, 2010-NMCA-
108, ¶ 9 (stating that substantial compliance “recognizes the reality that legislatures
cannot predict all possible applications when drafting a statute”). Thus, a finding of
“[s]ubstantial compliance” depends on the intent of the Legislature. 	See Brown v.
Trujillo, 2004-NMCA-040, ¶ 13, 135 N.M. 365, 88 P.3d 881. To determine whether
Mrs. Martinez substantially complied with the statute, we assess the “nature and
purpose of the statute, and we examine the acts purporting to achieve compliance in
light of the purposes served by strict compliance with the letter of the statute.” 	Id.
(internal quotation marks and citation omitted). Furthermore, “[d]eparture from the
strict letter of a statute should . . . be undertaken with great caution. In particular, one
must be careful not to underestimate the purposes served by strict compliance with the
letter of the statute.” Lane v. Lane, 1996-NMCA-023, ¶ 18, 121 N.M. 414, 912 P.2d
290.
a. 	Purpose of PERA and Section 10-11-14.5(A)
{12} 	PERA was established in 1947, see Pierce v. State, 1996-NMSC-001, ¶ 32, 121
N.M. 212, 910 P.2d 288, by the Act. 	Regulation of PERA is codified in the New
Mexico Administrative Code at 2.80.100 to -2300 NMAC (11/19/81, as amended
through 9/30/10). PERA was established to collect, hold in trust, and invest monies
contributed by employees and employers to pay “future retirement benefits to . . .

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PERA members.” Gonzales v. Pub. Emps. Ret. Bd., 114 N.M. 420, 422, 839 P.2d 630,
632 (Ct. App. 1992). 	The PERA Board is charged “to preserve, protect, and
administer the trust to meet its current and future obligations and provide quality
services to Association members.” PERA, http://www.pera.state.nm.us. As trustee
of PERA funds, the PERA Board “has a fiduciary responsibility to invest these funds
solely in the interest of the members, retirees, and beneficiaries and exclusively to
provide benefits to the members, retirees, and beneficiaries and to pay reasonable
administrative costs.” 2.80.300.30(A)(2) NMAC; see N.M. Const. art. XX, § 22(B).
In addition, the board must “give primacy to the preservation of trust funds and . . .
insure the procurement of a reasonable income while avoiding undue investment
risks.” 2.80.300.30(A)(2) NMAC. Both the enabling statute and the administrative
code highlight the fiduciary responsibility of PERA to all state employees, retirees,
and beneficiaries. 	See §§ 10-11-130 to -133; 2.80.300.30(A)(2) NMAC; see also
N.M. Const. art. XX, § 22. The one-year deadline and the requirement for specific
documents must be understood within that context.
{13} 	Mrs. Martinez makes two distinct arguments with respect to Subsection A.
First, she argues that the one-year time limit serves no discernable purpose and,
therefore, strict compliance with that requirement does not further the intent of the
statute. 	Second, she argues that the contents of her letter of May 30, 2007, were

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sufficient to meet the purposes of the statute. We address each of these points in turn.
b. 	Time Limit
{14} 	Our Supreme Court has addressed time limits applying to the administration of
PERA funds in State ex rel. Public Employees Retirement Ass’n v. Longacre, 2002-
NMSC-033, ¶¶ 20-23, 133 N.M. 20, 59 P.3d 500. The Court discussed the reasons
why PERA may not recover overpayments to retirees and beneficiaries past a certain
date:
a statute of limitations or repose providing that the state may not recover
overpaid retirement benefits after the expiration of a certain time period
serves the purpose of facilitating effective financial planning by retirees
who are often forced to make, for example, critical healthcare decisions
based upon the availability of fixed and often limited resources.
Id. ¶ 20 n.8. In Longacre, the purpose of the bar on PERA claims against retirees and
beneficiaries was to “reduce the potential hardship to retirement pension beneficiaries
from having to return overpayments that may have long ago been spent; and . . .
provide a strong incentive to PERA to conduct regular audits for the purpose of
correcting any errors or omissions [in payments].” Id. ¶ 27. The bar on claims in that
case was critical to sound financial management for both parties. Id. ¶¶ 26-27.
{15} 	In this case, the language in Subsection A barring claims for survivor’s benefits
after one year from the death of the member serves PERA’s fiduciary purpose. The
deadline promotes resolution and closure of claims for benefits within a manageable

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period and allows PERA to administer its funds effectively and profitably. It prevents
PERA from having to hold some funds in abeyance in anticipation of a claim, and
allows PERA to invest and manage the funds, consistent with its mission, for the
benefit of all retirees and beneficiaries. 	It permits PERA to determine the
beneficiaries, the amount of their annuity, and the number of years they will be paid,
as well as to plan for reservation and/or investment of funds for those payments in a
timely manner. 	See §§ 10-11-123, -126, -127 (relating to management of a
“retirement reserve fund” for the payment of benefits to “retired members and
survivor pension beneficiaries”). Thus, the deadline in Section 10-11-14.5(A) serves
to help ensure that PERA can manage the funds in its control to the benefit of its
constituents, including members, retirees, and beneficiaries, as charged by the
Legislature.
c. 	Documentary Requirements
{16} 	The specific documentary requirements of an application for benefits aid PERA
in preventing fraud. Section 10-11-14.5(A) states that an application for benefits must
be filed “in the form prescribed by the association.” The prescribed form is set out in
the New Mexico Administrative Code at 2.80.900.8(A) and (B). In addition, the form
must be accompanied by certain documents, which include a death certificate, a
marriage license, a birth certificate or other proof of age of the survivor beneficiary,

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an affidavit verifying that the beneficiary was married to the member at the time of the
member’s death, and social security cards for prospective payees. See 2.80.900.8(B)
NMAC. 	The administrative code also states that “[w]hen the application and
accompanying documentation . . . are filed, PERA will determine whether a pension
is payable,” indicating that PERA is not obligated to begin processing applications
until all proper documentation is received. 2.80.900.8(C) NMAC (emphasis added).
Although some of the raw information in these documents may have been provided
by the member when he applied and, therefore, found in the member’s retirement file
already, these documents provide PERA with independent verification of information
previously asserted by the member in his designation of beneficiaries.
{17} 	As trustees of the funds contributed by its members and the state and municipal
agencies it serves, the PERA board has a fiduciary duty to be vigilant against fraud.
In addition to imposing this duty on the PERA Board, the Legislature, by requiring
compliance with “the form prescribed by the association,” entrusted the PERA Board
to determine how best to carry out that duty. Section 10-11-14.5(A). The documents
required by 2.80.900.8(B) of the Administrative Code are consistent with this duty
because they permit PERA to verify the beneficiary’s identity and age, as well as
whether and how long the member and the beneficiary were married. Finally, proper
application includes an application form that asserts an intent to apply for benefits.

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See § 10-11-14.5(A); PERA, http://www.pera.state.nm.us Application for Survivor
Annuity (June 2007). Mrs. Martinez’s letter neither indicated conclusively that she
intended to access the benefits, nor included the required independent verification of
her status as a beneficiary.
{18} 	Mrs. Martinez contends that the fact that PERA initiated an audit of her
husband’s contributions, contacted his employer to verify his final salary, and
calculated the amount of the monthly survivor benefits indicates that PERA had
enough information to pay her benefits and, therefore, she substantially complied with
the deadline. We are not persuaded. In In re Estate of Mayfield, 108 N.M. 246, 248,
771 P.2d 179, 181 (1989), the claimant argued that the fact that the “[respondent
sought] discovery and request[ed] a trial setting within the sixty-day statutory period
[for filing a claim]” indicated that “litigation of the claim had ensued, notwithstanding
that the claimant failed to take formal initiatory steps under the nonclaim statute.”
The claimant maintained that the estate’s actions constituted a waiver of filing
requirements. Id. The Court rejected this contention, stating “neither the heirs nor the
personal representative can . . . waive the mandatory requirements of the nonclaim
statute.” Id. at 249, 771 P.2d at 182. Here, like in Mayfield, the conduct of PERA in
anticipation of a claim does not relieve Mrs. Martinez from compliance with the
statutory requirements for making the claim.

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{19} 	Furthermore, PERA’s action to investigate whether Mr. Martinez was vested
and to calculate Mrs. Martinez’s potential benefits indicates only that PERA knew
how much they may have to pay in survivor benefits. Under the statute, however,
PERA is not obligated to begin payments until all the required documents are received
and the beneficiaries are verified. See § 10-11-14.5(A); 2.80.900.8(C) NMAC. Here,
since the documents were not submitted, there was no trigger to earmark funds for
Mrs. Martinez’s benefits or to begin making payments. As discussed, PERA has a
responsibility to manage funds to achieve a “reasonable income.” Consequently, it
is important that PERA know which funds are available for investment and in which
portfolios. The difference between benefits that are potentially payable and those that
are verified and certainly payable is critical to this goal.
{20} 	Finally, Mrs. Martinez asks that we compare the current version of Subsection
A to the 1993 version and conclude that, because pre-amendment applicants were not
subject to a deadline but post-amendment applicants are, the only purpose of the
deadline is to deny benefits to those otherwise entitled. As discussed, however, the
application requirements in the Act are related to its overall purpose. The fact that
applicants before and after the amendments were subject to different requirements
does not indicate that the 1997 amendments were unrelated to the purpose and intent
of the statute.

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{21} 	Mrs. Martinez neither strictly nor substantially complied with Section 10-11-
14.5(A). Her letter of May 30, 2007, although within the time period for claims for
survivor benefits, was insufficient to permit PERA to verify her status as a beneficiary
and to plan for making payments to her, including setting aside and investing funds
for those payments.
B. 	The Act’s One-Year and Documentation Requirements do not Violate a
Fundamental Personal Property Right Because they are Rationally Related to a
Legitimate Government Purpose
{22} 	Mrs. Martinez argues that vested retirement benefits are property in which an
individual’s rights are protected and that Mr. Martinez had earned a vested property
interest in his retirement benefits that passed to his wife on his death. She maintains
that the one-year time limit on application for those benefits deprives her of property
rights without substantive due process as required under the New Mexico and United
States Constitutions. 	Mrs. Martinez argues that we should review the statute’s
requirements for applications using a strict scrutiny test because the interest at stake
is a fundamental property interest.
{23} 	PERA counters that Mrs. Martinez did not obtain property rights equivalent to
her husband’s on his death because survivor benefits are payable only upon
compliance with the retirement plan’s requirements, including those in Subsection A.
PERA contends that Mrs. Martinez failed to preserve her argument that Subsection

17
A unconstitutionally deprives her of a property right. In the event that the Court finds
the issue was preserved, PERA also argues that, even if Mrs. Martinez did have a
property interest in the survivor benefits, Subsection A’s requirements are subject only
to rational basis review, and under that test, the requirements are not unconstitutional.
1. 	Mrs. Martinez’s Arguments were Preserved
{24} 	“To preserve an issue for review on appeal, it must appear that appellant fairly
invoked a ruling of the trial court on the same grounds argued in the appellate court.”
Woolwine v. Furr’s, Inc., 106 N.M. 492, 496, 745 P.2d 717, 721 (Ct. App. 1987); see
Rule 12-216 NMRA. Preservation of issues is required on appeal from decisions in
administrative proceedings. See Selmeczki v. N.M. Dep’t of Corr., 2006-NMCA-024,
¶ 23, 139 N.M. 122, 129 P.3d 158. Although preservation of an issue is a prerequisite
to its review on appeal, “the preservation requirement should be applied with its
purposes in mind, and not in an unduly technical manner.” 	Gracia v. Bittner, 120
N.M. 191, 195, 900 P.2d 351, 355 (Ct. App. 1995).
{25} 	At the administrative hearing, Mrs. Martinez questioned PERA’s witness about
the reasons for the time limit and raised the due process arguments regarding her
property rights in closing argument. The hearing officer concluded that the statute
does not “create a statutory right or entitlement for a named survivor beneficiary to

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always receive a survivor pension from PERA upon the death of a vested PERA
member.” The hearing officer did not address the constitutional issue of whether Mrs.
Martinez had been deprived of a right to substantive due process. See Montez v. J &
B Radiator, Inc., 108 N.M. 752, 754, 779 P.2d 129, 131 (Ct. App. 1989) (“Raising [a
constitutional] issue before the hearing officer was not required in order to preserve
it because he had no authority to decide the issue.”). Mrs. Martinez again raised the
issue of whether her husband’s vested property rights passed to her on his death in her
exceptions to the hearing officer’s recommended conclusions of law. 	The PERA
Board accepted the hearing officer’s conclusions.
{26} 	Finally, Mrs. Martinez raised the issue of her property rights in the survivor
benefits and Subsection A’s impact on those rights in the appeal hearing before the
First Judicial District Court. The district court judge found that (1) “the vesting rights
law . . . applies to the employee spouse, not the beneficiary spouse;” (2) the statute
“did not create a right or entitlement” in Mrs. Martinez, and (3) “there was no
disregard of Mrs. Martinez’[s] [due process] rights in the circumstances here.” These
issues were preserved for appeal.
2. 	Standard of Review
{27} 	The parties propose the same standard of review and cite to Lantz v. Santa Fe
Extraterritorial Zoning Authority, 2004-NMCA-090, ¶ 5, 136 N.M. 74, 94 P.3d 817,

19
which states “we will not disturb a final agency decision unless it was fraudulent,
arbitrary, or capricious; not supported by substantial evidence; or otherwise not in
accordance with law.” Constitutional questions like those before us are questions of
law and are reviewed de novo. See Los Chavez Cmty. Ass’n v. Valencia Cnty., 2012-
NMCA-044, ¶ 12, 	N.M. 	, 227 P.3d 475.
3. 	Analysis
{28} 	Mrs. Martinez asks that we find that the one-year requirement in Subsection A
deprives her of a property right unconstitutionally because PERA has not shown that
it serves a compelling government interest. 	The first step in our inquiry is to
determine whether Mrs. Martinez had an interest in PERA retirement benefits and, if
so, the nature of the interest.

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a. 	Interest as a Matter of Law
{29} 	In Pierce, the New Mexico Supreme Court analyzed the Act and held that the
statute creates vested property rights. 	Pierce, 1996-NMSC-001, ¶ 43. 	The Court
stated:
[W]e find that the express language of the [PERA] statute[] initially
creates an expectancy, or property interest, in receiving benefits. 	[It]
require[s] a minimum of five years of earned service credits before an
employee is eligible to receive benefits. 	The only other condition of
eligibility is reaching a specified age. Therefore, based on an absolute
right to receive some form of benefits after earning five years of service
credits, we may infer that the statute[] create[s] vested property rights,
but that these rights do not mature until the final statutory condition is
met.
Id. (emphasis added). The “final statutory condition” is attainment of retirement age
or fulfillment of other conditions set out in the statute. Id. (“[M]aturity occurs when
the terms for retirement have been met. The [L]egislature may choose to establish a
different point of maturity.” 	Id. ¶ 44 (citation omitted); Copeland v. Copeland, 91
N.M. 409, 412, 575 P.2d 99, 102 (1978), modified on other grounds by Schweitzer v.
Burch, 103 N.M. 612, 616, 711 P.2d 889, 893 (1985). The New Mexico Constitution
also provides for vested property rights:
Upon meeting the minimum service requirements of an applicable
retirement plan created by law for employees of the state or any of its
political subdivisions or institutions, a member of a plan shall acquire a
vested property right with due process protections under the applicable
provisions of the New Mexico and United States [C]onstitutions.

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N.M. Const. art. XX, § 22(D).
{30} 	Mrs. Martinez maintains that her husband’s “absolute” interest in pension
benefits passed to her on his death as a matter of law. 	In response, PERA cites
Ruggles v. Ruggles to support its argument that “the benefits themselves do not vest
in the survivor.” 	See 116 N.M. 52, 860 P.2d 182 (1993). 	To the extent that Mrs.
Martinez attempts to distinguish Ruggles on grounds that it is a divorce case not
focused on survivor benefits, we are not persuaded. 	Ruggles makes clear that
“[b]efore actual retirement, the right to receive an income stream from the pension
plan is also subject to the contingency that the employee’s interest will become vested,
then the contingency that it will mature, and all along the contingency that the
employee will not die.” Id. at 65, 860 P.2d at 195. We agree with PERA that Ruggles
and Schweitzer, to which Ruggles refers, appear to dictate that, when a member dies
before his pension benefits mature and unless a statute provides otherwise, the
surviving spouse has an interest only in the actual contributions made by the member
to the pension plan, not in the benefits. 	Ruggles, 116 N.M. at 60, 860 P.2d at 190;
Schweitzer, 103 N.M. at 615, 711 P.2d at 892.
{31} 	To the extent Mrs. Martinez relies on Pierce and Section 22 of Article XX of
the New Mexico Constitution, those sources discuss vesting of rights in the
contributing 	member, 	not 	in 	the 	member’s 	beneficiaries, 	and 	are, 	therefore,

22
unavailing. See Pierce, 1996-NMSC-001, ¶ 37 (“[The] provision granted employees
. . . a vested right in membership.” (emphasis added)); id. ¶ 42 (“[PERA] grant[s]
employees a substantive right to receive retirement benefits upon meeting certain
requirements.” (emphasis added)); N.M. Const. art. XX, § 22(D) (“[A] member of a
plan shall acquire a vested property right with due process protections.” (emphasis
added)); see also Dickey v. Ret. Bd., 548 P.2d 689, 692 n.2 (Cal. 1976) (in bank)
(“[T]he wife of a public employee does not have a separate vested right to a pension.
Her right does not vest upon her husband’s acceptance of employment but upon the
happening of the contingency upon which her benefits are payable, such as his
death.”). Finally, as justification for her position that her husband’s interests passed
to her as a matter of law, Mrs. Martinez cites to Subsection K, which pertains to
survivor benefits. Mrs. Martinez’s reliance on Subsection K is not inconsistent with
PERA’s position that the Act is the sole source of any right Mrs. Martinez may have.
We conclude that Mr. Martinez’s interest in his pension benefits did not pass to Mrs.
Martinez on his death and that her interests are limited to those created by the Act.
b. 	Interest Created by Statute
{32} 	The terms of the statute creating a property right also govern how and when the
right will mature. See Pierce, 1996-NMSC-001, ¶ 44. Here, Mr. Martinez’s right to
retirement benefits vested when he completed five years of service and would have

23
matured when he turned sixty-five. See §§ 10-11-26.2 and -8. Thus, Mr. Martinez’s
rights to retirement benefits created by the Act were accessible by him only after
completion of the statutory requirements.
{33} 	Similarly, Mrs. Martinez’s right to a survivor pension was created by the Act
and she became eligible for it only when her husband died. See, e.g., §§ 10-11-117
and -14.5. Mr. Martinez’s benefits, had he retired at age sixty-five, would have been
“equal to three percent of final average salary multiplied by [his] service credit.”
Section 10-11-26.3. 	Mrs. Martinez does not have a direct interest in this benefit;
rather, she had a survivor’s interest, which is statutorily defined in Section 10-11-
14.5(K) as the greater of several payment options, neither of which is the same as the
benefit to which Mr. Martinez was entitled. In addition, just as Mr. Martinez’s rights
would have matured only on completion of certain statutory requirements, Mrs.
Martinez’s rights depended on fulfillment of the statute’s terms, including surviving
her husband, being designated as a beneficiary, and compliance with PERA’s
application requirements.
{34} 	Mrs. Martinez urges us to find that the language in Section 10-11-14.5(K) gives
her a right to payment of a benefit notwithstanding the language of Subsection A.
Subsection K states that “a survivor pension shall be payable to the designated
survivor beneficiary.” Section 10-11-14.5(K) (emphasis added). 	The mandatory

24
language of Subsection K, however, predates the 1997 amendments and, therefore, the
conditions added in 1997 reflect the most recent intent of the Legislature. 	See
Vaughn, 98 N.M. at 486, 650 P.2d at 8 (“Where an amendment is inserted without
regard to the remaining portions of an act, the clear intent of the amendatory clauses
prevails over any contradictory provisions because it is a later declaration of
legislative intent and the [L]egislature . . . can be presumed to change the existing
law.”). Moreover, all parts of a statute must be construed together. See NMSA 1978,
§ 12-2A-10(A) (1997) (“If statutes appear to conflict, they must be construed, if
possible, to give effect to each.”); State v. Trujillo, 2007-NMCA-056, ¶ 26, 141 N.M.
668, 160 P.3d 577 (stating the presumption that, when enacting amendments,
legislators are “fully aware” of the existing language and intend the amendments to
“complement [the existing language], rather than act in conflict with it” (citation
omitted)), aff’d, 2009-NMSC-012, 146 N.M. 14, 206 P.3d 125. If Subsection K were
construed to require payment of survivor benefits regardless of the conditions of
Subsection A, Subsection A would become superfluous, a result we are unwilling to
allow. See Nat’l Union of Hosp. Emps. v. Bd. of Regents, 2010-NMCA-102, ¶ 23, 149
N.M. 107, 245 P.3d 51 (“[A]ll provisions of the act will be considered in relation to
one another, with the attempt to render no part surplusage or superfluous.”). Instead,

25
Subsection A must be understood as a preliminary condition to the payments required
in Subsection K.
{35} 	Although she cites to Pierce in support of her contention that Subsection K
gives her an “absolute right to receive some form of retirement benefits,” Pierce does
not so hold. Rather, the Pierce court, while calling a vested right an “absolute right,”
also recognized that the “absolute right to receive benefits” was created by the PERA
statute and “vests upon fulfilling the minimum of five years of service credits” and
“matures when the employee attains the age specified in the plan.” 1996-NMSC-001,
¶ 31; Copeland, 91 N.M. at 412, 575 P.2d at 102. The Court thus recognized that the
“absolute right” could be accessed only by compliance with the Act. The Act states
that, except as provided for survivor beneficiaries, “[a]ll payments stop upon the death
of the retired member.” Section 10-11-117(A). The Act also provides for refund of
the employee’s contributions in the event that the employee and the interests of the
beneficiaries fail to mature. See § 10-11-117(E). Thus, even when an employee is
“vested,” these conditions of the plan govern whether and when an employee or
beneficiaries will receive benefits. 	In addition, the PERA board has the power to
modify both the contributions and benefits under the plan. 	The Pierce Court
concluded that “[i]t is equally apparent that the PERA retirement board expressly
retained the power to modify the amount of employee contribution or the amount of

26
benefits payable.” Pierce, 1996-NMSC-001, ¶ 33; see also N.M. Const. art. XX, §
22(E) (“Nothing in this section shall be construed to prohibit modifications to
retirement plans that enhance or preserve the actuarial soundness of an affected trust
fund or individual retirement plan.”). 	Thus, Subsection K does not grant Mrs.
Martinez an absolute right to benefits.
{36} 	Mrs. Martinez had a property interest in survivor’s benefits for which she
became eligible on her husband’s death and which she could have accessed by
submitting a complete application, with accompanying documents, within the one-
year period set by the statute. Since she did not meet these conditions, her right to the
survivor benefits terminated. 	We turn now to whether the requirements for
application deprived her of her right to survivor’s benefits without substantive due
process, i.e., for no rational reason. See N.M. Indus. Energy Consumers v. N.M. Pub.
Serv. Comm’n, 104 N.M. 565, 567, 725 P.2d 244, 246 (1986) (“Having identified the
property interest, we must determine what process is due it.”).
c. 	Substantive Due Process
{37} 	The Fourteenth Amendment to the United States Constitution and Article II,
Section 18 of the New Mexico Constitution require “due process of law” when a state
deprives “any person of life, liberty, or property.” U.S. Const. amend. XIV, § 1; N.M.
Const. art. II, § 18. “Due process of law” includes both procedural due process and

27
substantive due process. 	See Starko, Inc. v. Gallegos, 2006-NMCA-085, ¶ 24, 140
N.M. 136, 140 P.3d 1085 (discussing different analyses for procedural and substantive
due process). When substantive due process rights are implicated, we apply one of
three levels of scrutiny. See ACLU of N.M. v. City of Albuquerque, 2006-NMCA-078,
¶ 19, 139 N.M. 761, 137 P.3d 1215. The level of scrutiny “depends on the nature and
importance of the individual interests asserted and the classifications created by the
statute.” 	Wagner v. AGW Consultants, 2005-NMSC-016, ¶ 12, 137 N.M. 734, 114
P.3d 1050. Strict scrutiny is appropriate in limited cases when “the violated interest
is a fundamental personal right or civil liberty guaranteed by the constitution.” ACLU
of N.M., 2006-NMCA-078, ¶ 19 (internal quotation marks and citation omitted); see
Wachocki v. Bernalillo Cnty. Sheriff’s Dep’t, 2010-NMCA-021, ¶ 36, 147 N.M. 720,
228 P.3d 504 (“Federal substantive due process protection extends only to a narrow
and limited set of fundamental rights, which include the rights to marry, to have
children, to direct the education and upbringing of one’s children, to marital privacy,
to use contraception, to bodily integrity, and to abortion.” (internal quotation marks
and citation omitted)), aff’d, 2011-NMSC-039, 150 N.M. 650, 265 P.3d 701. Under
this analysis, the government must show there is “a compelling state interest
supporting the challenged scheme, and to show that the statute accomplishes its
purpose by the least restrictive means.” 	ACLU of N.M., 2006-NMCA-078, ¶ 19.

28
Where “legislative classifications infringe on important but not fundamental rights,
or involve sensitive but not suspect classes,” intermediate scrutiny applies. Id. Under
this level of scrutiny, the government must show “the scheme is substantially related
to an important governmental interest.” 	Id. “If the ordinance does not affect a
fundamental right or create a suspect classification, nor impinge upon an important
individual interest, rational basis review applies.” Id. (internal quotation marks and
citation omitted). Under this type of scrutiny, the burden is on the challenger to show
that the statute has no rational relationship to a legitimate government purpose.
Marrujo v. N.M. State Highway Transp. Dep’t, 118 N.M. 753, 758, 887 P.2d 747, 752
(1994). 	The rational basis standard is not a high bar: 	“even a single persuasive
rationale may be sufficient to establish the statute’s constitutionality.” Cummings v.
X-Ray Assocs. of N. M., P.C., 1996-NMSC-035, ¶¶ 20-21, 121 N.M. 821, 918 P.2d
1321.
{38} 	Mrs. Martinez urges us to assess the constitutionality of the Act’s application
requirements using a strict scrutiny analysis on grounds that her interest in survivor
benefits is a fundamental property right. She depends on a statement in Marrujo to
the 	effect 	that 	“[s]trict 	scrutiny 	applies 	when 	the 	violated 	interest 	is 	a
fundamental . . . right [such as] fairness in the deprivation of life, liberty, or property.”
118 N.M. at 757, 887 P.2d at 751 (emphasis added). 	Mrs. Martinez’s reliance on

29
Marrujo is misplaced. In that case, the Court addressed whether the Tort Claims Act’s
requirement 	that 	claims 	against 	the 	State 	be 	filed 	within 	“six 	months 	after
the . . . occurrence of the injury which resulted in the death” violated the Marrujo
family’s substantive due process rights under the New Mexico and United States
Constitutions. 	Id. at 756, 887 P.2d at 750 (internal quotation marks omitted). The
Court held that “[a] notice of claim is not a substantive right.” Id. at 758, 887 P.2d at
752. Instead, it is like a “statute of limitations, . . . or . . . statutory period for filing a
notice of appeal,” id., and “does not preclude . . . access to the courts. 	It merely
specifies the circumstances under which a plaintiff can exercise [that] substantive
right.” Id. After noting that “[n]umerous New Mexico cases have applied the rational
relationship test when evaluating constitutional challenges to notice statutes and
statutes of limitation,” id., the Court went on to apply this test and find that the
statutory requirement was constitutional because it was “rationally related to a
legitimate state interest.” Id. at 760, 887 P.2d at 754.
{39} 	The rational basis test applies here. Like in Marrujo, where the time limit did
not preclude a substantive right, the requirements in Subsection A do not preclude a
survivor beneficiary from exercising a substantive right to receive benefits. 	See
Pierce, 1996-NMSC-001, ¶ 42 (stating that the Act grants “employees a substantive
right to receive benefits upon meeting certain requirements”). Rather, they specify the

30
prerequisites for maturity of the benefits and the circumstances under which a
beneficiary may receive them. See Longacre, 2002-NMSC-033, ¶ 24 (finding a time
limit constitutional because it does not prohibit recovery of overpayments, but merely
restrains the period in which to do so). 	In addition, the U.S. Supreme Court has
applied rational basis scrutiny to similar cases involving pension benefit legislation.
See, e.g., Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 725 (1984)
(applying rational basis test to retroactive application of legislation requiring
employers withdrawing from a plan to pay the plan their proportionate share of vested
benefits); Gavin Reinke, Note, When a Promise Isn’t a Promise: Public Employers’
Ability to Alter Pension Plans of Retired Employees, 64 Vand. L. Rev. 1673, 1687
(2011). In R.A. Gray & Co., the Court stated:
It is by now well established that legislative Acts [sic] adjusting
the burdens and benefits of economic life come to the Court with a
presumption 	of 	constitutionality, 	and 	that 	the 	burden 	is 	on 	one
complaining of a due process violation to establish that the legislature
has acted in an arbitrary and irrational way.
467 U.S. at 729 (internal quotation marks and citation omitted).
{40} 	Finally, the time limit in Subsection A functions like a statute of repose because
it cuts off claims after a specific statutorily defined date. 	See Cummings, 1996-
NMSC-035, ¶ 50. 	As stated in Marrujo, statutes of repose are analyzed using a
rational basis test. See 118 N.M. at 759, 887 P.2d at 753; Cummings, 1996-NMSC-

31
035, ¶¶ 20-21, (“New Mexico courts have repeatedly analyzed . . . statutes of repose
under the rational-basis test.”).
{41} 	Under a rational basis test, Mrs. Martinez must show that the one-year deadline
and requirement for specific documents are not related to any legitimate governmental
purpose. Marrujo, 118 N.M. at 758, 887 P.2d at 752. Any reasonable justification
will suffice to find these requirements constitutional. Cummings, 1996-NMSC-035,
¶ 21. Mrs. Martinez questioned PERA’s manager of the Death and Disability Unit in
the administrative hearing about the purpose of the one-year deadline. She maintains
that, because the witness could not articulate a specific reason for this deadline, there
must not be a reason. This inquiry alone, however, is not enough to demonstrate that
there is no legitimate purpose for either the one-year period or the application
requirements. The New Mexico Legislature, not PERA staff, instituted the one-year
time frame and gave the PERA Board the power to require an application and
accompanying documents. Therefore, the fact that the PERA staff member did not
know why the Legislature instituted the requirements in the statute is not dispositive.
As discussed above, there are a number of rational reasons for both requirements,
including 	timely 	determination 	of 	the 	amount 	and 	duration 	of 	payments 	to
beneficiaries, independent verification of beneficiaries, and freedom from the
uncertainty of unknown claims. 	Since Mrs. Martinez did not meet the burden of

32
proving that there are no rational reasons for these requirements, they survive the low
bar presented by the rational basis test. Although we recognize that this conclusion
may have severe consequences, “[a] particular law is not rendered unreasonable or
unconstitutional merely because its results are sometimes harsh.” Id. ¶ 38.
{42} 	Mrs. Martinez also asserts that the requirements in Subsection A are an
unconstitutional taking of her property without just compensation under Article II,
Sections 4 and 20 of the New Mexico Constitution, but does not develop this
argument. 	The Court, therefore, will not consider this argument. 	See Headley v.
Morgan Mgmt. Corp., 2005-NMCA-045, ¶ 15, 137 N.M. 339, 110 P.3d 1076.
III. 	CONCLUSION
{43} 	We hold that Mrs. Martinez did not substantially comply with the requirements
of Section 10-11-14.5(A) so as to require PERA to pay her benefits. We also hold that
her right to survivor benefits was governed by the terms of the Act and it terminated
when she failed to comply with the Act’s application requirements within one year of
her husband’s death. We hold further that the requirements of Section 10-11-14.5(A)
are reasonably related to the legitimate purposes of PERA and are, therefore,
constitutional.

33
{44} 	We affirm.
{45} 	IT IS SO ORDERED.
MICHAEL D. BUSTAMANTE, Judge
WE CONCUR:
CELIA FOY CASTILLO, Chief Judge
J. MILES HANISEE, Judge