Unions spar over public pension reforms
By Trip Jennings | The New MexicanPosted: 2/9/2012, 8:00 PM Mountain time
A tightening of national accounting rules in recent years has required states to set aside more money to pay pensions for both current and future retirees.
For New Mexico's two public retirement systems -- Public Employees Retirement Association and the Educational Retirement Board -- the gap between cash on hand and what is required stands at about $10 billion, an eye-popping number that has many New Mexico state lawmakers calling for a reform of both funds.
Going into the 30-day session, some viewed the educational retirement system as the easier fix, meaning state lawmakers could come to an agreement on changes to inject new revenue to close that fund's gap.
With six days to go in the session, that easy fix is turning into a bare-knuckle scrum among public employee unions who are fighting over which of two competing ideas is best at reforming the state's two public retirement systems.
The public donnybrook has made some lawmakers skeptical that pension reform will clear the New Mexico Legislature by next Thursday, the last day of 30-day session.
"In election year, won't happen, won't happen, whistling Dixie," said Sen. John Arthur Smith, D-Deming, on Thursday afternoon. Smith is chairman of the Senate Finance Committee.
If state lawmakers can't successfully tackle pension reform during the regular session, Gov. Susana Martinez's office said this week that she'd consider calling a special session.
"Working with legislative leaders, if it was determined that the best way to reach a positive, comprehensive solution was to address the issue of pension reform in a small special session, it is something she would consider calling," Martinez spokesman Scott Darnell said in an email.
A solution to both systems' financial problems seemed far off Thursday as representatives of public employee unions took aim at each other over the competing plans.
The American Federation of State, County and Municipal Employees, Council 18, supports Senate Bill 150 sponsored by Sen. Stuart Ingle, R-Portales, which would make changes to the educational retirement system. The measure cleared the Senate Finance Committee on Thursday night.
Representatives of the American Federation of Teachers, New Mexico and Albuquerque Teachers Federation, meanwhile, support House Bill 270, sponsored by Rep. Mimi Stewart, D-Albuquerque.
Carter Bundy of Council 18, which represents about 1,500 Educational Retirement Board members, said Thursday that the education unions are throwing away a great opportunity by not supporting Ingle's legislation. He said their representatives "are not familiar enough with pension fund math that this is the best deal they are going to have."
Next year, they won't have the same deal on the table, especially if Republicans win a few more seats or take control of the House of Representatives after November's election.
"This is by far the best and fairest fix employees will get anywhere in the nation," Bundy said of Ingle's legislation during a legislative committee hearing Thursday. "Turning this down is nothing short of union malpractice."
Christine Trujillo, president of American Federation of Teachers, New Mexico, which represents 23,000 Educational Retirement Board members, took aim at Bundy and his criticism of teachers' unions.
"Maybe PERA folks, with all due respect, make a gazillion dollars," Trujillo said. "My folks don't. And they cannot handle another hit."
Ellen Bernstein, president of the Albuquerque Teachers Federation, also questioned Bundy's logic.
"That kind of rationalization doesn't cut it for me," Bernstein said. "I should be scared this year because next year I should be more scared. What is good for the people I represent matters to me."
What the teachers unions most dislike in Ingle's legislation is that it asks educators to contribute more of their pay -- in essence, to take a pay cut -- to help bail out the pension fund, following years in which teachers and other educational employees and state workers helped to bail out the state's main checking account, the general fund.
Bernstein and Trujillo said Stewart's bill demanded educational employees contribute some of their pay to help the Educational Retirement Board fund, but not as much as Ingle's bill.
But Bundy characterized Stewart's bill as full of "incomplete half-measures on both funds" and not going far enough to fix the problems in either fund.
Stewart's bill would institute a minimum retirement age of 55 for public educational employees. But it also would make changes to the Public Employees Retirement Association, which represents more than 80,000 members, including active workers and retirees.
Unlike the Educational Retirement Board, which adopted proposed changes prior to the 30-day session, the PERA board needs several months to examine suggested changes before proposing legislation for the 2013 legislative session, Kurt Weber, PERA's interim executive director, said last month.
"What we need to do is fix both of these funds for the long term," Bundy said, adding that Ingle's legislation does that for the Educational Retirement Board. "We just have to wait for the PERA board to have all their numbers finalized to figure out what will fix it for PERA. But PERA is going to change, too."
Contact Trip Jennings at 986-3050 or at tjennings@sfnewmexican.com.
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