The bad news? It still has an unfunded liability – the gap between future retirement benefits owed and assets on hand – of $4.6 billion.
That good news is courtesy of changes made by the 2013 Legislature in collaboration with unions, changes that trimmed retirement benefits, enacted stricter retirement eligibility guidelines, required government employees to pay an additional 1.5 percent of their salaries into the pension fund, and increased taxpayers’ contribution by 0.4 percentage points (about $2.3 million more a year starting in fiscal 2015).
And that bad news won’t get any better if the New Mexico Supreme Court strikes down similar reforms in the Educational Retirement Board system because that legal reasoning would likely apply to PERA as well.
The PERA changes are projected to bring the fund to a 100 percent funded ratio within the next 30 years. It remains one of the most generous retirement packages around, with the state currently contributing 16.59 percent to the general plan, which will go up to 16.99 percent in 2015.
Around 55,000 New Mexico government workers and nearly 34,000 retirees are counting on the PERA fund to be there en toto for them – not just 72.9 percent of what they expected their benefit check to amount to. That’s why it is important to focus on promises kept, rather than simply promises made, when evaluating the reforms enacted this year.
This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.