As things stand now, judges and magistrates can name survivor beneficiaries without any reductions in their pensions. And, upon the death of a retired judge or magistrate, a survivor beneficiary receives 75 percent of the pension for life – regardless of the beneficiary’s age.
I reported in July that the provisions would allow, for example, a judge’s grandchild to receive millions of dollars in survivor benefits over the child’s lifetime.
Under bills to be considered by the Legislature when it convenes later this month, the provisions dealing with survivor benefits for judges and magistrates would be brought in line with those for other government workers.
Judges and magistrates could designate survivor beneficiaries, such as spouses, but their pensions would be reduced based upon their life expectancies, the percentage of their pensions to be paid to survivors and the life expectancies of the survivors.
The goal is that the amount of pension paid to a judge and his survivor beneficiary would be equal to the amount paid to the same judge if he had chosen a full, or straight life, pension rather than designate a survivor beneficiary.
It isn’t clear why the Legislature, in setting up the pension plans for judges and magistrates decades ago, decided on survivor benefits different from those for other state and local public employees.
Arthur Pepin, director of the Administrative Office of the Courts, told me in July he wasn’t aware of the special survivor benefits for judges and magistrates. I learned about them from the Public Employees Retirement Association, which administers the plans for judges and magistrates.
Wayne Propst, executive director of PERA, said Tuesday the agency hasn’t seen a significant number of judges or magistrates who have designated substantially younger survivor beneficiaries such as children or grandchildren, but he said there may have been one or two.
Propst said it might be possible to identify the exact number through a query of computer data, but said he wasn’t sure how long it would take to set up such a query and run it.
The changes in survivor benefits for judges and magistrates wouldn’t be retroactive under the bills to be considered by the Legislature, meaning those who have already chosen survivor beneficiaries wouldn’t be affected.
Pepin said the proposed changes weren’t made retroactive out of fairness to judges and magistrates nearing retirement and out of a concern that making them so could result in a legal challenge.
He also said he was comfortable not making the changes retroactive because the current provisions dealing with survivor benefits haven’t resulted in large payouts.
The changes are part of broader legislation – endorsed by the Administrative Office of the Courts and the Legislature’s Investments and Pensions Oversight Committee – to shore up the pension plans for judges and magistrates.
As of June 30, the pension plan for judges was 55.7 percent funded with an unfunded liability of $63.7 million. The pension plan for magistrates was 58.38 percent funded with an unfunded liability of $22.7 million.
Under the pension reform bills, judges and magistrates would contribute 3 percent more of their salaries to their plans, according to Pepin. The state would contribute 3 percentage points more for judges and 4 percentage points more for magistrates.
Current and future judges would have to work longer to receive full pensions of 75 percent of their last year’s salary, Pepin said. Magistrates also would have to work longer on average, he said.
How much longer a judge would have to work to receive a full pension would depend upon when the judge became a member of the pension plan, Pepin said.
Future judges would have to work longer than current ones. A future judge would have to work more than 21 years to reach full retirement. Some current judges can retire with full benefits in as few as 15 years.
Also, as part of the legislation, all magistrates would be required to participate in their pension plan, and the state would make a one-time infusion of $5 million into the magistrate plan, Pepin said.
Other changes include reductions in cost of living increases in pensions for both judges and magistrates, he said.
The Legislature approved legislation last year to reform the pension plans for judges and magistrates, but it was vetoed by Gov. Susana Martinez. She said it wasn’t serious enough reform and relied too heavily on increased contributions from the state.
UpFront is a daily front-page news and opinion column. Comment directly to Thom Cole at email@example.com or 505-992-6280 in Santa Fe. Go to ABQjournal.com/letters/new to submit a letter to the editor.