The legal challenge follows similar court cases in other states and could resolve a simmering debate in New Mexico over the constitutionality of tweaking public retirement plans.
An attorney for the four retirees said Thursday that the state constitution protects earned retirement benefits as a property right.
This year’s bill to shore up the Educational Retirement Board, which has more than 60,000 active members and covers about 37,000 retirees, trimmed benefits for current workers and retirees until the pension fund’s solvency figures improve.
“We don’t dispute the ERB can change the plan,” Albuquerque attorney Sara Berger told the Journal . “But we do dispute that changes can be made that affect those who are already retired.”
However, a response filed this week by Attorney General Gary King’s office and ERB attorneys points out that the constitution allows for changes to be made to the state’s public retirement systems to keep them afloat.
The response also claims that decreases in the cost-of-living adjustments that retirees receive – which are tied to inflation and have averaged 2 percent annually – are just one part of the solvency legislation approved by lawmakers and signed into law by Gov. Susana Martinez in April.
The measure, which took effect July 1, also requires employees who earn more than $20,000 annually to funnel more of their paychecks into the retirement fund and imposes stricter retirement eligibility on future hires.
“Sharing the burden reduces the impact on any one group, whether retired, active or new members,” wrote Assistant Attorney General Scott Fuqua in asking the Supreme Court to deny the retirees’ petition.
The four retirees challenging the benefit cuts include 82-year-old Joanna Bartlett, a former University of New Mexico professor, and Lenore Pardee, a 72-year-old former Albuquerque high school teacher who receives an annual pension of roughly $28,000.
Scaled-back retirement benefits for retirees like Bartlett and Pardee could mean less money for basic needs, Berger said.
“For some, it might not matter much, but for many that extra bit of an increase is very important,” she said, referring to the request to restore the benefits.
Rep. Mimi Stewart, D-Albuquerque, who voted against this year’s bill but has pushed pension solvency legislation, said she was not surprised by the legal challenge.
“I’m not surprised, because it doesn’t seem fair,” Stewart said, citing the Legislature’s decision to tack benefit cuts for current workers and retirees onto a union-backed plan that was the framework for this year’s legislation.
It was unclear Thursday whether the Supreme Court might issue a ruling on the request for a writ of mandamus, a special legal action that allows the court to resolve an issue without waiting for lower courts to act.