In a second landmark opinion released today by the New Mexico Supreme Court, a challenge to the Legislature’s decision to trim teachers’ retirement benefits has been dismissed.
In an unanimous ruling authored by Justice Richard Bosson, the state’s highest court concluded the state Constitution does not guarantee retirees a right to an annual cost-of-living increase to their retirement benefits.
The ruling comes more than three months after the Supreme Court held a hearing on the challenge filed by four retired educators.
They argued the state Constitution protects retirement benefits as a property right and claimed the benefits can not be scaled back without the retirees being compensated.
However, the Supreme Court rejected that claim, based in part on the finding that the COLA is not a part of the core retirement benefit.
“We hold, therefore, that in the absence of any contrary indication from our Legislature, any future cost-of-living adjustment to a retirement benefit is merely a year-to-year expectation that, until paid, does not create a property right under the Constitution,” Bosson wrote in his opinion.
This year’s legislation to shore up the Educational Retirement Board trimmed the cost-of-living adjustments for current workers and retirees until the pension fund’s solvency improves.
The ERB has about 61,000 active members and covers roughly 37,000 retirees.
If the legislation had been overturned, a similar legal challenge would likely have been filed against the state’s other public retirement system, the Public Employees Retirement Association.
Check tomorrow’s Journal for more details.