Back in August, state legislators asked why the Educational Retirement Board had yet to come up with a plan for fiscal solvency when the Public Employees Retirement Association board had already adopted a plan scaling back benefits for retirees, future employees and more than 54,000 current government workers.
Considering the proposal offered up a month later, ERB officials should have saved their energy. Because this plan gouges taxpayers and still won’t save members’ pensions.
The ERB has an unfunded liability of $5.9 billion — in hard reality that means it is $5.9 billion with a “b” short when it compares assets on hand to benefits it has promised to pay out to more than 96,000 educators and retirees.
It means for many future retirees its pensions are empty promises.
So holding not only all current retirees but also all current employees harmless when it comes to benefits and retirement age — whether they were hired three decades ago or three days — won’t make much of a dent in the debt. Scaling back for just future employees isn’t enough.
Yes, under the plan employees making more than $40K annually will have to put an extra $520 a year into their pensions, but taxpayers will have to put in more than double that — an additional 3 percent, or $1,200, for that employee.
And while that 3 percent was promised years ago by lawmakers, the fact is the state doesn’t have the cash. And many taxpaying New Mexicans don’t even have a pension, much less one someone else helps shore up.
Public Education Deputy Secretary Paul Aguilar says the ERB “proposal doesn’t work” because future investment earnings likely won’t be high enough to make the fund 95 percent solvent by 2043. Yet state Treasurer James Lewis supported the plan, along with the other board members last week, and says “I think this is a good start. We have to do something, and I think our fiduciary responsibility is to do what’s good for the fund.”
Lewis is smart enough to understand the state’s fiduciary responsibility is to deliver its employees and retirees the pension they paid into, even if it is revised, rather than an empty promise. And that what’s good for the fund is solvency, not a start toward it.
So the ERB needs to start over and keep that in mind.
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.