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Editorial: Public retiree health plan is now a pricey dinosaur

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For years, New Mexico has ranked near the top of a significant list. We know it’s not child well-being or our high school graduation rate or the numbers of New Mexicans who live in poverty.

New Mexico is known for its generous public employee retirement programs, under which most government workers can retire after 25 years on the job with up to 90 percent of their working days’ salary – and in many cases with a government-subsidized health care plan to boot. About 55,000 retired public employees and their families now receive health insurance through the program.

In 2015, New Mexico taxpayers will contribute 16.99 percent of a state worker’s salary to the Public Employees Retirement Association of New Mexico, or PERA, about double what the workers themselves pay in – 8.92 percent.

On top of that, during the 2015 session the Legislature will be asked to increase both parties’ contributions to the retirees’ health insurance program – an extra $45 million annually. Without increased contributions and other changes, the program is expected to run short of money in about 19 years. Proposed changes could extend solvency to 25 years.

The increases would mean, for example, that a government worker or educator earning $40,000 annually would pay an extra $150 a year if the proposed 0.375 percent payroll contribution rate increase were enacted. At the same time, taxpayers would pay an additional $300 annually for that worker.

New Mexico already has a generous retirement, so why should taxpayers pay more to subsidize a retiree health insurance plan when they are also paying for subsidized health coverage available to these workers through Medicare and the Affordable Care Act?

Fundamentally, this benefit isn’t needed anymore. So if public retirees want it, they should pay for it, and not expect taxpayers to pick up a bigger portion of this tab, too. Those additional resources would be better spent on teacher salaries, early childhood programs and other building blocks for the future.

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.

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