Copyright © 2019 Albuquerque Journal
SANTA FE – In a testy meeting before an audience of retirees – who repeatedly interrupted to say they couldn’t hear – New Mexico lawmakers began debate Wednesday over how to fix the state’s underfunded pension system.
A panel of legislators ultimately agreed to endorse the complex proposal – backed by Gov. Michelle Lujan Grisham – to overhaul the state’s retirement system for police, firefighters and other government employees.
Supporters said it would put New Mexico on track to wipe out an unfunded liability of $6.6 billion in the pension fund operated by the Public Employees Retirement Association.
The legislation calls for a $76 million infusion of state funding, increased contributions from employees and employers, and a new system for calculating the cost-of-living adjustments that retirees receive.
But Wednesday’s endorsement is largely symbolic. It simply sets the stage for the debate to come, with the Legislature expected to take up the measure during a 30-day session beginning next month.
About 50 retirees turned out and bluntly outlined their objections. They took particular aim at provisions that would reduce their cost-of-living adjustments temporarily and move eventually to a profit-sharing system for the adjustments.
Under the changes, the cost-of-living increases would fluctuate from 0.5% to 3% for most retirees, depending on the pension fund’s investment returns. Most retirees now get an automatic 2% increase each year.
“People are counting on this for their livelihood and quality of life going forward,” said Jonathan Thomas, a retired captain from the Bernalillo County Metropolitan Detention Center and a member of the Fraternal Order of Police. “We need to protect that – we need to protect the promise that was made to people.”
Lorenzo Rodriguez, a retired employee of the Albuquerque Bernalillo County Water Utility Authority, said the proposal “is going to hurt a lot of people.”
Members of the Lujan Grisham administration and executives for the pension system spoke in favor of the proposal.
They said the legislation requires “shared sacrifice” but would ensure the pension fund can survive in the long term. It would spare about one-third of retirees from the changes – depending on age and income level – and even increase the cost-of-living adjustment for some retirees by a half a percentage point, to 2.5%.
Executives for the Public Employees Retirement Association said the retirement system is vulnerable to even a shallow recession. Its funded ratio – the plan’s assets divided by its liabilities – is now about 70%.
“If we have a downturn in the economy, these funds are going to go broke,” said Sen. George Muñoz, a Gallup Democrat who presided over the meeting of the Investments and Pensions Oversight Committee.
At times, the daylong hearing at the Capitol was tense. Some retirees called out frequently to say they couldn’t hear when legislators or presenters forgot to turn on their microphones or didn’t speak loudly enough.
A few audience members grumbled under their breath during parts of one presentation.
Sen. Jacob Candelaria, D-Albuquerque, urged the audience to quiet down.
“If people keep yelling things at the legislators,” he said, “I will clear the room.”
The tension is a potential preview of the legislative session.
Muñoz told the audience that the testimony had been helpful. Lawmakers, he said, may change the legislation to reflect some of the arguments.
“I believe we have to listen with our heads and our heart,” Muñoz said.
The committee voted 5-0 to endorse the legislation. Retirees protested that there wasn’t a quorum of the 12-member committee present.
Endorsement by a committee between legislative sessions, in any case, isn’t necessary.
Wednesday’s debate largely focused on the PERA system.
Teachers and other school workers are covered under a separate plan operated by the Educational Retirement Board. Lawmakers may take up a different proposal covering that system.