Teacher pension changes sent to gov.

SANTA FE — A plan to shore up New Mexico’s public retirement system for teachers and other education workers was approved by the Legislature late Friday, sending the measure to Gov. Susana Martinez’s desk for final approval.

House members voted 54-13 in favor of a multipronged solvency plan aimed at keeping the Educational Retirement Board afloat into the future. The Senate then gave its final OK by signing off on changes made to the measure.

However, some Democratic lawmakers blasted the legislation — which was toughened in a Senate committee to include benefit cuts for current workers and retirees — during Friday’s debate on the House floor.

“Do we hate teachers? I just don’t understand why we’re doing this,” said Rep. Mimi Stewart, D-Albuquerque, who described the changes to the solvency legislation as unfair and unnecessary.

The plan to shore up the ERB, which has more than 60,000 active members and covers about 37,000 retirees, calls on employees who earn more than $20,000 annually to funnel more of their paychecks into the retirement fund.

The bill approved Friday, Senate Bill 115, also counts on taxpayer-funded contributions to the pension fund to go up by 1.5 percentage points to the level set by the Legislature in 2005, but delayed in recent lean budget years.

In addition, it would impose a new minimum retirement age of 55 and defer the start date of the yearly cost-of-living adjustments that retirees receive to offset inflation. However, those changes would apply only to future hires.

House GOP Whip Nate Gentry of Albuquerque, who voted against the bill, argued the different retirement rules for future employees could hurt the state’s ability to recruit and keep teachers.

In defending the legislation approved Friday, House Speaker Ken Martinez, D-Grants, said the solvency fix is urgently needed to address a “big-dollar problem.”

“The biggest unfairness would be not to fund this liability,” Martinez said.

In its current form, the legislation would make the pension fund more than 100 percent funded by 2043, ERB Executive Director Jan Goodwin said.

If the fund were to reach 90 percent funded status, it would trigger a restoration of slightly higher retirement benefit rates. Based on its most recent accounting, the pension fund is currently about 60 percent funded.

Most educators covered by the ERB must work for at least 25 years to be eligible for full retirement benefits, though there is no current minimum retirement age. Benefits are calculated through a formula that includes an employee’s final average salary and number of years worked.

The Legislature has already approved a solvency measure for the state’s other large public retirement system, the Public Employees Retirement Association.
— This article appeared on page A03 of the Albuquerque Journal