Kathy and Gene Neer made a lot of smart moves before retiring in recent years. The Santa Fe couple bought one of the smallest houses in their neighborhood early in their teaching careers, and at least one of them always had a second job. They continue to lease the house to Santa Fe Opera musicians during the summer. They even decided long ago that if they were going to have children and stay in good financial shape, they would have just one.

After 30 years of teaching elementary kids in the Santa Fe Public Schools, they continue to work in the classroom a few days a week, and the money goes for extras, like home-improvement projects and flying to Seattle to see their son and grandchildren.

"If we were just to stay at home (and not work), we'd probably be just fine," said Kathy Neer, 62. "But right now I'm enjoying the things we're doing."

"We really have no anxiety about our situation," said Gene Neer, 66.

The only way the couple see that changing would be if their pension plan faltered. But both belong to the Education Retirement Board, which, like New Mexico's even larger Public Employees Retirement Association, is required by the state constitution to keep providing payouts to its retired members.

At a time when most workers are fretting over their retirement plans and watching their 401(k)s and IRAs tank, school and government retirees are enjoying more solid footing — even though some are concerned about their separate private investments.

"There is some more stability, but that doesn't mean they discern it that way," said John Brunett, a financial planner for Allocca and Brunett/Los Alamos National Bank, which works in mutual funds and has seen clients lose 30 percent to 40 percent of their investments in the past year.

"I think they're certainly in a fantastic situation," Brunett said of public pensioners. "They're very, very fortunate, certainly, but they're still worried."

Marilyn and Ron Frank are even more concerned. Much like the Neers, they played it safe in their years before retirement — or at least the retirement they have yet to enjoy. They did as their financial adviser recommended and put their money in conservative funds.

Like many in their situation, the Franks lost 30 percent to 50 percent of their investments' value in the past year, and the couple have no pension programs to fall back on.

"We have been socking money away, we have been using a really well-respected national brokerage firm and using traditional allocation models for our ages," Marilyn Frank said. "We've been doing the right thing, and now it's just brutal the money that we've lost, and what do we do now?"

Ron Frank, 64, has worked for 25 years in the resort-development business around the world. Marilyn Frank, 55, has worked in real estate for 16 years. They wanted to semi-retire about a year from now and start a business that would help their fellow baby boomers retire outside the United States, such as in Latin America.

Those plans are now on hold, but the Franks don't begrudge the pensioners who are largely immune to the recession. For one thing, Ron said, public pensions tend to buy the bonds that have supported his resort projects.

"We chose a more entrepreneurial life," Ron Frank said. "I don't have any resentment or anything like that. I have more empathy for everybody who has worked and done things right."

"Anybody who's worked hard and is reaping those rewards, we respect," said Marilyn Frank, who saves her anger for real-estate investors.

"That greed is what drove us all into this place, so I think people are having a rude wake-up call back to a different value system," she said. "And I think in a way that's a good thing."

State Rep. John Heaton disagrees with the notion that public pensions are what attract people to government work.

"I don't think it's an inducement for people to go to work because government doesn't pay a lot. I think that when people come to work for government, they're looking for income and a stable job," the Carlsbad Democrat said. "It's not about what the retirement plan is. Everybody talks about that, but it is not the driver of employment.

"I don't think I have ever had one person come to me and say, 'How good is your retirement plan?' "

Heaton is sponsoring House Bill 573, which would increase how long and how old a government worker would have to be before getting maximum retirement benefits. The bill is one of many this session that seeks to strengthen the solvency of public pensions, which have lost billions of dollars during the economic downturn.

But one of the state's top union lobbyists has a different take than Heaton. Government jobs attract people looking for stable pay and benefits, including the guaranteed retirement benefits, said Carter Bundy, the political director for the American Federation of State, County and Municipal Employees in New Mexico.

"Pensions are absolutely a major factor for people to work for a public entity and to stay with a public entity," he said.

He said pensions are an "incredibly important retention tool," alongside health coverage.

The state is under a hiring freeze because of the economy, except for positions that agencies consider "essential," but pensions remain one of the biggest attractions to government work, said Dominic Garcia, the State Personnel Office chief of staff.

"We try to work really hard to attract people to government and that's our biggest selling point, is the benefits involved," he said. "Specifically with PERA, that's one of the biggest, most attractive pieces that we use as a recruitment tool."

Although public pensions remain guaranteed for vested retirees, the pension funds themselves have also come on hard times. PERA, which has some 77,000 members, has seen its fund drop from $13.3 billion at the end of 2007, just as the economy started to plunge, to $8.5 billion at the end of January. It has dropped 30 percent just since last July 1.

"We're pretty well diversified, but with no fund protected from turmoil, we pretty much have to sit tight," said Bob Gish, PERA's chief investment officer and director of investments.

"We're safe, according to our consultants; PERA is fine," said PERA board member Loretta Naranjo-Lopez, a retired city of Albuquerque planner. "I guess it's looking at the future. Are we going to have to increase employee participation?"

The Educational Retirement Board has some 64,000 members, including teachers, college professors and faculty and bus contractors and drivers, and just more than 31,000 retirees and beneficiaries. Its fund balance dropped from $8.7 billion on June 30, 2008, to $6.25 billion on Jan. 31.

The only way those numbers might affect the Neers is if they saw a drop in their retirement benefits, but they still see themselves in a better situation than some of their retired friends.

"We're fortunate to be healthy right now and not have a lot of obligations," Gene Neer said. "A lot of people we know are raising their grandchildren, or supporting their grown children, and we're fortunate to just be supporting ourselves."

Contact Doug Mattson at 986-3087 or dmattson@sfnewmexican.com.