Reader View: Creating two classes of retirees is morally wrong

Gerald L. Chavez

Loopholes, exceptions and inequities within our public pension system — the Public Employees Retirement Association — are the result of administrative oversight, special interest or political intrusion.

In 2010, our Legislature deemed that PERA retirees returning to work was an unacceptable policy. They signed legislation to close the practice of retired public employees returning to work, sending a message that double-dipping was not good for either the pension fund nor the taxpayer.

PERA was never designed to be responsible for affiliated employers’ recruitment and retention issues. It was not designed to create a special class of “super-paid” retirees, enabling them to receive their pensions and receive an annual cost-of-living adjustment while returning to work for a salary.

The founders of PERA were concerned with providing New Mexico’s public servants with retirement security, not creating pre-retirement wealth. To provide security, one may seek replacement income in retirement. Replacement income does not mean a dual income provided compliments of PERA.

In 2013, our Legislature enacted pension reform (Senate Bill 27). The core result was that all 80,000-plus PERA members felt the effects of a pay cut. Future members had to work longer, working members paid more in contributions, and retirees lost 33 percent of their cost-of-living adjustment (no grandfathering in). All grandfathered return-to-work employees had their cost-of-living adjustments suspended until they ended their employment.

Now we have House Bill 171 being introduced. Once again, PERA is being used to create an enhanced benefit to an exclusive group of retirees. It divides our police officers into two distinct categories, those who will be eligible to double their income vs. those who cannot, for doing the same job. Disparity of wages with no distinction in job expectations or performance might in fact lead to a slippery slope of unintended consequences.

A change to the PERA system that has a negative solvency impact, creates an elite class of membership or promotes financial disparity among our retirees is morally wrong.

Gerald L. Chavez is the executive director of Retired Public Employees of New Mexico.

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