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Misleading PERA allegations hurt fund

On May 20 … the Albuquerque Journal published a guest column claiming the state auditor “missed the big picture” in his findings regarding staff compensation at the Public Employees Retirement Association. … Displeased with the state auditor’s findings, the author attacks the credibility and impartiality of the Office of the State Auditor.

In fact, the state auditor got it exactly right. The state auditor conducted a thorough, months-long investigation into compensation practices for PERA staff, including decisions made by PERA’s executive director. After reviewing thousands of pages of relevant documentation, including applicable statutes and rules, PERA Board Policies and Procedures, board meeting minutes, attorney general opinions, and previous pay raises given to the current and former staff, the state auditor concluded that none of the materials supported any allegations of fraud or misconduct. In other words, there is absolutely no evidence of any kind that the pay raises violated any law, rule or policy. The state auditor wrote to the PERA board, “The OSA’s review of available evidence suggests that the executive director acted reasonably and within his authority in meeting with and obtaining board approval for the proposed raises.”

Moreover, the continued allegations that PERA staff, including the executive director, somehow “gave” themselves raises, are utter nonsense.

Previous articles have stated that the executive director “gave himself” numerous raises in the last seven years. In fact, only one performance-based compensation increase of 10% was awarded to the executive director in 2014.

The executive director and PERA staff received the same compensation increases approved by the Legislature for all state employees of 3% in FY15 and 2% in FY18. PERA’s compensation practices are reviewed by the board and are consistent with what is happening at other state agencies. Just because detractors of PERA management continue to repeat the falsehood that PERA staff has given itself raises does not make it true.

The assertion that salary increases were illegal because they exceeded the “10% statutory limit” is also factually incorrect. The 10% limit only applies to state employees who receive in-pay band increases, not those who are reclassified or promoted into higher positions with additional responsibilities.

I am proud to serve our membership, and I am proud of PERA staff. Any unbiased look at compensation practices at PERA clearly shows that the focus of the executive director has been on recruiting and retaining the best people PERA can find to manage our $15 billion fund and serve our 90,000 members. These are the same individuals who answer thousands of calls every month and meet with hundreds of our members every month. They process retirements and help members with death and disability claims.

Rather than “missing the big picture,” the state auditor focused his attention exactly where it should be — on the PERA board’s lack of focus on, and its failure to uphold, its fiduciary responsibilities to the trust fund and to its membership. Rather than focusing on the real and critical issues facing PERA – the pension fund’s long-term solvency and its unfunded liability – a small faction of the board have been spending their time and energy on unfounded accusations that only serve to distract and divide the board, its membership and PERA staff.

Demonizing PERA staff and providing misleading information to the public won’t solve PERA’s long-term funding challenges. Hard work and a willingness by the PERA board and policy makers to make tough, but fair, decisions will allow us to meet those challenges while preserving one of the best public pension plans in the country. I and a lot of other people are glad that the state auditor gets the big picture.