An advocacy group for retired public employees assailed core provisions of a pension reform proposal in defiance of recommendations by the governor, at a legislative hearing Wednesday.

Miguel Gómez, executive director of Retired Public Employees of New Mexico that represents more than 40,000 people, criticized a so-called profit-sharing proposal to tie future cost-of-living increases on retirement payouts to investment returns for the $16 billion retirement fund overseen by the Public Employees Retirement Association. That provision is designed to align changes in pension benefits more closely with combined pension savings.

Unfunded liabilities at the fund exceed $6 billion and have prompted downgrades in credit ratings for the state and cities including Albuquerque that can lead to higher borrowing costs. Leading legislators and administrators of the pension fund have warned that an economic downturn could quickly undermine the fund’s ability to meet future pension obligations.

Gómez told a panel of legislators that immediate, comprehensive solvency reforms are not necessary and that the pension fund can sustain unfunded obligations far into the future. He warned lawmakers of a possible political backlash.

“You’re waking up a sleeping giant of retirees in the state of New Mexico,” said Gómez, calling for an independent study on pension solvency.

On Tuesday, first-year Democratic Gov. Michelle Lujan Grisham endorsed a sweeping legislative proposal aimed at eliminating unfunded pension liabilities within 25 years at the Public Employees Retirement Association.

That plan takes guidance from months of study and deliberations by a pension solvency task force appointed by the governor, along with some concerns raised by retirees. The Legislature gathers in January for its 30-day legislative session.

The governor-backed proposal would stem the accelerating withdrawal of pension-fund assets by suspending cost-of-living adjustments until mid-2023 for most retirees. Pensioners instead would receive a 2% annual bonus payment on top of the same benefit each year. Later, cost-of-living adjustments would loosely track the performance of pension investments.

In an effort to accommodate pension-fund members, Lujan Grisham exempted disabled, low-income and retirees over the age of 74 from major retirement changes.

That did not satisfy Gómez, who said firefighters and police officers who retire early at age 50 would be more exposed over time to inflation and reduced retirement payments.

“Those folks are going to be hurt dramatically,” Gómez said.

Pension committee chairman and Democratic Sen. George Munoz of Gallup warned that a failure to enact reforms could lead to greater unfunded liabilities that might only be resolved with higher taxes.

“If we have a downturn in the economy, these funds are going to go broke and that’s the big picture we have to look at,” he said.

Under the proposal from the governor’s office, annual pension contributions would increase by an additional 4% of salary, split evenly between employees and taxpayers.

Separately on Wednesday, the executive director of the statewide retirement fund for educational workers outlined a legislative proposal to more quickly pay down unfunded liabilities of $7.9 billion overseen by the Education Retirement Board.

That would be accomplished through a series of appropriations from the state general fund and another account, starting with $50 million in July 2020. Educational Retirement Board Executive Director Jan Goodwin says that taxpayer investment can help public schools and universities avoid higher borrowing costs and that educators already pay more toward their retirement than state and local government employees.

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(8) comments

Stefanie Beninato

I am sorry that you feel resentful that a total system has to be revamped so EVERYONE will get the pensions they thought they were earning. I am also sorry that your 31 year pension is not enough or that you feel shorted by contributing to the community at the SFCC but having to pay into PERA--you did know when you applied for and took the job that those were the conditions que no?

As for ranting--please read my comments and stop ascribing your upset to me--I said the article raised questions particularly from the commentator in the story who wanted an independent study--that is not ranting...sorry...

Francisco Carbajal

Ms. Stefanie Beninato, don't take my response to this article as a personal attack on anyone from a social media perspective. The bottom line is - if you are not a member of the PERA retiree community, leave it alone. If your vetted into the PERA system in one form or another (active or retired), then, of course, you have a say-so on it. If not, leave it alone. That's all I am saying.

Joan Wittig

I, for one, as a current PERA employee applaud the proactive efforts from PERA and the Governors Office to address the shortfall. Even if you think the proposals on the table are imperfect or impact your interests disproportionately, at least we've begun the process of addressing this shortfall. Now is the time for productive, well-thought out responses to the proposals rather than name calling and grandstanding. Pension underfunding is a national problem and it will take compromise and collaboration to solve.

Roxanna Knight

why exempt the people over 74? Those of the same people who already got the higher cost of living increases for several years, while those of us who are a bit younger have absorbed the reduced cost of living for many years. Fix the management problem. Get better fund managers.

Stefanie Beninato

I think the pointing to the police and firefighters who can and do retire at fifty and then take other jobs or the same jobs a few months later is misleading. Often these retirees have second pensions because of these second careers/jobs. I don't understand the idea that they would necessarily be "hurting" given the reality of second incomes w/ pensions. I am not a PERA member but if I were, I would want the fund to stay solvent. Is there evidence of bias from those on the task force? Did the task force address member concerns? Just questions the article raises for me. I would want to know more facts before calling and paying for another task force.

Francisco Carbajal

Ms. Stefanie Beninato, clearly it is noted that your statement that "often these retirees have second pensions because of these second careers/jobs. I don't understand the idea that they would necessarily be "hurting" given the reality of second incomes w/pensions," is an insult to our retired police and firefighters, period! Who are you to make this type of judgement about this honorable profession, specifically, the public safety community that have given up their lives for protecting this community across the State of New Mexico! Frankly, each of those retired police and firefighters deserve respect and dignity in the first place and not your public insults against them. I, for one, have dedicated my life of thirty-two years as a first responder and finally receiving my PERA pension without owing the State of NM anything. And yes, I do have a second job working at a community college, because I still love to contribute to my community with the subject matter expertise that I still have in my tool box, but guess what? I am mandated to contribute to the Educational Retirement Board (ERB) for being a PERA Retiree and not receive a dime from this specific retirement program. So, what is wrong with this picture? Is this a punitive and punishment policy-making legislation that was recently approved by the NM State Legislature and the Governor signing this year? Go figure! So, please stop your ranting about "is there evidence of bias from those on the task force" that you are referring to. And yes, I am glad that you are not a PERA member too! Get off the wagon and keep your insults off the public forum or social media. We have done our "public service" contribution in an honorable and dignified manner on this earth and we just want the PERA Board to stop stripping away and taking more from the retired first responder's pensions, period!

Mark Ortiz

Mr. Carbajal, You must of loved AG Barr's speech Tuesday at the DOJ's Third Annual Attorney General’s Award for Distinguished Service in Policing. On another note, unless you prefer to live in China, Russia, Turkey, etc, I suggest you recognize that as long as Ms. Beninato is not conducting personal attacks against you, she is not in any violation of posting rules on the SFNM comment section. You do realize we are in America, and though I will thank you for your service Mr. Carbajal, your service is supposed to fight for the freedoms this great country affords us, such as free speech and freedom of the press. I hope your agree.

Francisco Carbajal

Mr. Mark Ortiz, seriously, any conversation or topic that has to do with the AG Barr, you can keep it to yourself. Frankly, the US Attorney General has nothing to do with our New Mexico PERA retiree's and their families, as well as, being involved in revamping the PERA system in our state. Do you really think that he even cares on what is happening on a local and state level in our state business? Secondly, don't remind me about what the U.S. Constitution and it's provision relating to what free speech and freedom of the press is about, either! Lastly, I made a direct statement to Ms. Beninato and not you! Don't take it personal, eh? Leave it alone.

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