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Monday, June 15, 2009
UPDATED: New Mexico Unions Sue Over Pension Contribution Hike
By Heather Clark
Associated Press
Unions representing more than 57,000 state workers and teachers filed a lawsuit Monday claiming that an increase in the amount of their employee pension contribution is unconstitutional.
The lawsuit, filed in state District Court in Albuquerque, claims the state constitution states that no fund "may be used, diverted ... encumbered or appropriated for any other purpose" than to benefit the plans' members.
The state may modify the retirement plans only to enhance or preserve the actuarial soundness of the affected trust fund or retirement plan, the suit said.
The lawsuit names the state of New Mexico, the Public Employees Retirement Board, the Public Employees Retirement Association and the Education Retirement Board are named as defendants.
The legislation passed earlier this year will boost employee payroll contributions by 1.5 percent of their salaries and lower the state government's payments by the same amount during the next two years. Employees who make more than $20,000 per year will be affected.
The contributions required for public employees were approved to help the state save $43 million annually.
Attorney Shane Youtz, who represents the unions, called the requirement "just not fair" and said it was "not right that the employees of the state of New Mexico should have to bear the burden or pay the cost of a general budget shortfall."
Jan Goodwin, the Education Retirement Board's executive director, and Susan Pittard, an attorney for the Public Employees Retirement Association, declined to comment, saying they had not seen the lawsuit.
Peggy Stielow, a special education teacher in Rio Rancho who attended the unions' news conference, said the increased contributions will mean a loss of up to $2,000 from her family's paychecks over the next two years.
"That would mean a summer vacation would not be in effect. That's about as much as we were planning on spending this summer," Stielow said.
Youtz said state employees will ask a judge to order a preliminary injunction barring the increase.
"It is a shortfall in every single worker's pocket. They will have less money to buy food for their families, to pay the bills," Youtz said.
State Sen. John Arthur Smith, D-Deming, the chairman of the Senate Finance Committee, said the legislature decided to increase employees' contributions to their pensions because it was the least painful alternative.
Other options were layoffs, furloughs or reduced vacation days, but by increasing the pension contributions, at least employees would still see that money when they retire, he said.
"All New Mexicans are going to have to share in the pain and that includes state employees," he said.
Youtz said the unions did not believe layoffs were necessary if their lawsuit forces the state to make cuts elsewhere to balance the state budget.
Ellen Bernstein, president of the Albuquerque Federation of Teachers, said that reports of teacher layoffs in California and Arizona are "scare tactics."
"We're not losing teachers," Bernstein said.
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