The University of New Mexico Retiree Association reviewed the six scenarios being presented by the Educational Retirement Board to achieve solvency of the fund. In examining the scenarios, none was felt to best serve the UNM Retiree Association members. The UNM Retiree Association developed its own recommendation, which preserved the cost-of-living adjustment and increased the age by which one could start receiving his/her pension to 60. This proposal was reviewed actuarially by the Educational Retirement Board and achieved the desired solvency.

However, neither the six submitted by the Educational Retiree Board to its membership, nor the one recommended by the UNM Retirees Association, was adopted. Instead, the one presented at the last minute by a member of the Education Retirement Board, who also happens to be the executive director of the New Mexico Association of Educational Retirees, was adopted. That proposal was from its executive board and never was vetted by the membership!

This proposal cuts all Educational Retirement Board members' cost-of-living adjustments by 12.5 percent and sets 55 as the age when one can begin receiving his/her retirement. The argument for increasing the age when one can receive one's pension is that folks are living longer and pensions are not designed to support the retiree for longer than he/she had worked. We strongly support increasing the age when one may receive his/her retirement, but not decreasing the cost-of-living adjustment for any current or future retiree.

What the Educational Retirement Board/New Mexico Association of Educational Retirees' cost-of-living decrease proposal (SB 150) fails to recognize is that once retired, retirees have no option to increase their retirement income because they are on fixed incomes. Cutting the cost-of-living adjustment will further decrease their future purchasing power. Members who are still working can make choices as to the size of their retirement by working longer and hoping for a future pay raise, while neither option is available to a retiree.

As members of the UNM Retiree Association were looking at the Educational Retirement Board proposal, they also started comparing it to the Public Employees Retirement Association benefits. To their amazement, they discovered an egregious inequity between the two state retirement funds. Again, members of the Educational Retirement Plan (employees of public schools and universities) saw how poorly they have been treated by our state Legislature. If an educational retiree and a PERA employee with identical salary histories retire at age 55 with a salary of $34,000 and 25 years of service, at age 85 the Educational Retirement Board member's pension will be $29,600; the PERA member's pension $58,420, an almost twofold difference. Why should New Mexico taxpayers pay their legislators, judges, firefighters and police officers such a higher pension than their teachers and ask only the educational retirees to take a further decrease?

Why are educators' pensions so much less? Teachers must wait until they are 65 before their average 2 percent cost-of-living adjustment begins. PERA employees have a 3 percent cost-of-living adjustment starting just six months after they have been retired for two full calendar years. So an educator who has become eligible to retire after 25 years of service at age 50 (under current rules), will see no increase in their pension for 15 years. However, those employed in other public service will see an increase in only 2 1/2 years.

Additionally, the public state employee cost-of-living adjustment is 3 percent per year, regardless of the Consumer Price Index, whereas the educational retiree's cost-of-living adjustment will average 2 percent based on actual CPI. The only time an educational retiree's cost-of-living adjustment would equal the 3 percent of a PERA retiree is when the CPI is 6 percent or greater, something that has happened only seven times in the past 35 years. The ERB cost-of-living adjustment can go below 2 percent whenever the CPI is below 2 percent, something that has occurred five times in the past 35 years.

It is this inequity the UNM Retiree Association sees as the "Elephant in the Room." However, with legislators being on the PERA, it may make it more difficult to correct these inequities. This despite the fact that the Educational Retirement Board is working hard to try to assure solvency of our fund while PERA is still dragging its feet.

S. Scott Obenshain, M.D., is president of The University of New Mexico Retiree Association and Gloria Birkholz, J.D., is the chairwoman of the Benefits Committee of the UNM Retiree Association.