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N.M. judiciary’s pension, pay need comprehensive reform

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The Journal’s editor and I don’t always agree. But when I saw the recent editorial calling for reform of judges’ pensions, I thought, “Hooray” – that is, until I actually read it.

The Judicial Retirement Act needs reform, but not because our plan is overly generous or because of some hypothetical beneficiary scenario born of the cynical belief that judges sit around trying to get something for nothing from the people of New Mexico. In fact, we need to reform New Mexico’s entire approach to judicial compensation if we want to climb out of yet another of our all-too-frequent basement positions.

My being a judge and all, you understand that I make decisions based on evidence. Let’s look at the facts.

Fact 1: New Mexico’s judges are the lowest paid in the United States. At an annual salary of about $112,000 for trial judges our judiciary is the lowest paid in the entire country, according to the nonpartisan National Center for State Courts. We are also under-compensated when compared to government employees with comparable responsibilities. For example, the city attorney for Santa Fe is paid $118,300. His counterpart in Albuquerque gets $ 130,000 and the city manager of Las Cruces gets $163,000, while the chief engineer of the MRGCD is paid more than $186,000.

Fact 2: New Mexico’s judges pay more into our pension plan, and receive less. According to the nonpartisan N.M. Judicial Compensation Commission’s 2012 Report, New Mexico’s judges pay 9 percent of our salary toward our pensions. Judges in Texas and Kansas pay 6 percent; in Arizona it’s 7 percent and judges in Utah and Nevada contribute nothing. Taxpayers contribute 10.5 percent to judicial pensions in New Mexico. Our neighbors in Nevada pay over 25 percent; it’s 17 percent in Colorado, and Texans pay 16.4 percent. New Mexico judges receive a maximum pension of 75 percent of their salary after 20 years of service while our counterparts in Texas, Utah, Colorado and Wyoming get 90-100 percent of their already-higher salaries.

Fact 3: Judicial retirement is not like other public retirement plans. In order to qualify for judicial service, a New Mexican must be 1) a law school graduate; 2) with at least eight years’ experience; and 3) at least 35 years old. In fact, most starting judges are in their mid-to-late 40s and many are older; I was 56. Other state employees may start their jobs, and pension accumulation, as young as 18, allowing them almost 20 years’ more earning power before retirement age.

Most any lawyer you might want on the bench deciding your case is earning more as a private lawyer than the bench pays, and will spend his or her peak earning years in public service. Judges have the same mortgages and car payments as anyone else. We shop at the same groceries you do. So how do we make it attractive for successful lawyers to enter public service? Surely not by providing the lowest salary and benefits in the nation.

Fact 4: Judges offered more pension concessions in 2013 than any other public employees. In the 2013 legislative session, members of the judiciary worked closely with legislators to reform our plan. We agreed to reduce our 3 percent cost-of-living adjustment to 2 percent, and to waive COLAs entirely for several years to aid the plan’s financial recovery. We agreed to increase our contributions to 10.5 percent of salaries while the taxpayers went to 12 percent. We reduced the annual service credit from 3.75 percent of salary to 3.5 percent, effectively increasing the term for full benefits from 20 years of service to 22.5 years.

Senate Bill 25 incorporated these changes and passed unanimously. That’s right, in the current climate of political deadlock, the judicial reform bill carried the Legislature unanimously, every Democrat and Republican behind it, only to be vetoed by the governor as “not serious enough.” It seems only reforms that require no increase in taxpayer money would be “serious enough.”

It’s a simple matter of mathematics that both the judiciary and the taxpayers will need to contribute more to a viable judicial retirement plan. Political ideology and expediency aside, competency costs money, my friends.

So, what’s the solution? In the private sector, defined-benefit retirement plans have given way to privately managed 401(k)s and similar vehicles. Arizona has taken the bold step of ending their judicial pensions for all new judges in 2013. Instead, they will utilize 401(k) retirement accounts with the state providing up to 6 percent in matching funds. Issues such as COLAs, market fluctuations, and management expenses are out of the picture for the state of Arizona under this approach, but Arizona judges are already paid about 30 percent more than New Mexico judges. Whether by virtue of higher salaries, increased taxpayer contributions, or a combination of the two, the cost of a competent, independent, judiciary will have to rise in the future.

I grew up in the restaurant business. My parents always paid their people more than minimum wage because they believed “If you pay peanuts, you will get monkeys.”

Public pension reform is a serious concern in our “new economy.” Having visited the facts on judicial retirement in New Mexico, albeit briefly, you can “Judge for Yourself” how best to approach the issue.

Alan M. Malott is a judge of the 2nd Judicial District Court. Before joining the court, he practiced law throughout New Mexico for 30 years and was a nationally certified civil trial specialist. If you have questions, send them to Judge Malott, P.O. Box 8305, Albuquerque, NM 87198 or email to: alan@malottlaw.com. Opinions expressed here are solely those of Judge Malott individually and not those of the court.

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