Heath Haussamen
(Full disclosure: My wife is an ERB member.)
My dad worked for state government in New Mexico for 25 years. He planned for both the day he could retire and the amount of retirement he would receive. Toward the end of his career, he looked forward to retirement and moving on to other challenges in life.
It would have been devastating if he’d been told after all of that planning that he was going to have to work years longer than he had planned. But that’s exactly what the N.M. Educational Retirement Board is considering doing to its current members.
The ERB is pondering a proposal that would require its members to pay more into their retirement. In addition, and this is the worst part, unless they’re three or fewer years away from retirement, they would have to work years longer than they had planned.
The kicker: It’s not because the ERB is in dire straits. According to the Albuquerque Journal, the ERB’s executive director, Jan Goodwin, says the fund is safe for a “very long time,” but she says it needs to be made solvent indefinitely.
I agree that it should be solvent indefinitely. But not by breaking so critical a promise to educational employees. Not unless there’s an emergency situation and no other option but to break that promise.
This doesn’t appear to be an emergency.
Why not exempt current members from changes?
The ERB plans to vote this week on its proposed changes, which would then go to the Roundhouse for consideration. Nothing would change without approval from lawmakers and the governor.
The Albuquerque Journal has already endorsed the proposal.
“It’s easy to understand why public education employees would be upset with the suggestion they pay more into their pension funds only to retire 10 years later,” the Journal wrote in a Nov. 21 editorial. “Not to make light of that concern, but welcome to the world the rest of America lives in.”
Clearly, since the fund isn’t solvent indefinitely, it must be changed. But why do the changes have to apply to current employees who have already planned their path to retirement? The fund is apparently solvent for decades. Why can’t changes be made for new members only? Over time, the current members who drain more from the fund will no longer be receiving payments. New members won’t be taking as much out.
Won’t most current members be gone before the fund gets into trouble?
Widespread, negative effects
Changing the retirement plan for current members would have widespread, negative effects. Morale would suffer. Productivity would drop. People would learn that New Mexico can’t be trusted and take jobs in other states.
There are so many reasons why changing a person’s retirement terms is an awful idea. I might agree with the Journal that changes should be made in spite of all those reasons – if the fund was in immediate danger.
But that doesn’t appear to be the case. So let’s look for a solution to make the fund solvent indefinitely without breaking a promise to employees who have already planned their retirements.