There's positive news for about 42,000 state retirees covered by the New Mexico Retiree Health Care Authority.

New projections show the fund is expected to remain solvent through 2027. Earlier projections showed the fund could have become insolvent as early as 2017.

The news was announced Monday at a meeting of the Legislature's Investments Oversight Committee.

"This is good news. It gives the Legislature and the state some breathing room," said Wayne Propst, executive director of the authority.

However, that doesn't mean it's clear sailing for the group.

Expenses could begin to outpace revenues in 2018, Propst said.

The new projections come after the Legislature this year passed a handful of measures aimed at shoring up the group.

But Rep. Lucky Varela, D-Santa Fe, said the improvement in the solvency outlook is largely because of premium increases before this year's Legislative session.

One bill passed this year requires public employees and government employers to pay more, while another means future employees will have to work longer before they can retire and collect full benefits. Those changes were not included in the recent numbers, Varela said, so the solvency news could get even better.

The retiree authority covers group health care for retirees of higher education, public schools, and city, county and state governments.

Propst also said the agency has lowered its unfunded liability — the amount it would cost the state to pay all its current and future benefits — to $2.9 billion. It has been as high as $6 billion in past years.

At the meeting, Sen. Tim Keller, D-Albuquerque, spoke about changes he'll propose in either the special session later this fall, or the regular session next January,

They include requiring more qualifications for members of state investment-related boards and requiring a prospectus for public funds similar to what private fund holders get.

Keller, a freshman who has a background in securities and private equity, said establishing qualifications of board members is key. Overall, he said, the public deserves to understand what has happened recently with the state's investments — and what potential solutions are available that could avoid future problems with money that's critical to the state.

"When we speak of our state's investment funds, we are really talking about our ability to fund our schools, economic development, health care and social services," he said in a statement. "It is also important that New Mexico shows the greater financial community that we are professional, diligent and expect strong fund performance."

Earlier this year, Sen. Steve Neville, R-Aztec, sponsored a bill that would have changed the State Investment Council by expanding the number of members and giving less of a say to the governor on who serves on the board.

The House and Senate passed the measure; Gov. Bill Richardson, who chairs the committee, vetoed it. Richardson since has said he'll consider changes in the board makeup.

Contact Kate Nash at 986-3036 or knash@sfnewmexican.com.