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Treasurer accuses PERA director of improper raises

Copyright © 2019 Albuquerque Journal

SANTA FE – State Treasurer Tim Eichenberg has accused a top executive in one of New Mexico’s pension systems of improperly securing pay raises for himself and others – an allegation the executive, Wayne Propst, flatly denies.

State Treasurer Tim Eichenberg

The back-and-forth comes as the Attorney General’s Office acknowledges it is reviewing the allegations after receiving a referral from Eichenberg.

As state treasurer, Eichenberg is a member of the board that oversees the Public Employees Retirement Association of New Mexico, where Propst is executive director.

In a recent opinion column submitted to news organizations, Eichenberg said Propst has received about $25,000 in raises since 2014 without approval by the full PERA board.

He accused Propst of “pilfering” retirees’ pensions.

Propst, in turn, said Monday that he has “never given myself a pay raise, nor could I do so even if I wanted to.”

Pay increases for himself and PERA staffers, he said, have been handled in compliance with state law, state policy and past practices of the agency that predate his tenure.

The Public Employees Retirement Association runs the basic pension system for government employees in New Mexico. Propst draws a salary of about $166,000 a year as executive director, a job he has held since 2012.

That’s roughly in line with the pay of his counterpart, Jan Goodwin of the Educational Retirement Board, who is paid $168,000 as executive director of the pension system for educators.

The PERA board is expected to meet today to consider the agency’s budget proposal for the coming year – including a 4% across-the-board pay raise approved by lawmakers for state employees, including Propst and PERA staff.

Eichenberg, in his second term as treasurer, said Propst received a 10 percent raise of $14,000 in 2014 – approved by the PERA board chairperson, but not directly voted on by the entire board.

Propst received two other raises that weren’t voted on by the full board, Eichenberg said, and other staff members received raises without board approval.

State law, the treasurer said, calls for the retirement board to set employees’ compensation.

He said Propst has a fiduciary duty to act in the interest of the pension system and the people who rely on it.

“It seems that Mr. Propst’s law school didn’t have an Executive Director 101 class that would teach, ‘When acting as a fiduciary, you don’t circumvent or disregard the law for personal gain,'” Eichenberg said.

Propst, meanwhile, said he welcomes the outside review of the pay increases for PERA staff.

“I have spent my entire career in public service,” Propst said in a written statement. “I am a steward of public money, and my actions are subject to complete scrutiny – as they should be.

“I have made all personnel decisions at PERA with only one thing in mind: what is in the best interest of our members and protecting our Trust Fund. It is deeply troubling to have my personal and professional reputation attacked by an elected official for political reasons.”

Pay raises typically go through the gubernatorial administration, which makes the actual changes to payroll.

A year ago, for instance, then-Gov. Susana Martinez’s administration said it was blocking pay raises sought for top executives at the Educational Retirement Board. The raises would have averaged 28 percent.

A spokesman for Attorney General Hector Balderas confirmed Friday that his office received a referral from Eichenberg and is reviewing the PERA pay increases.

“The allegations raised within the referral and the impact they have on the integrity and security of our public employees’ futures and the PERA fund,” spokesman David Carl said, “are concerning and will be reviewed thoroughly.”

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