The Roundhouse in Santa Fe (Photo by Peter St. Cyr)
(Full disclosure: My wife is an ERB member, and I authored a column earlier this week opposing this bill.)
The House approved today a bill that would change retirement plans for future public employees and current workers with less than five years of service – though it would exclude law enforcement officers from the changes.
House Bill 644, sponsored by Rep. Mimi Stewart, D-Albuquerque, passed the House on a vote of 37-32. It now heads to the Senate for consideration.
This is the second time the House considered the bill, which it rejected on a vote of 38-28 on Sunday. Since then, apparently, a number of members changed their minds.
The bill would set at 55 the minimum age that PERA and ERB members can begin drawing retirement. It would reduce the annual cost of living adjustment for PERA workers. And it would require many current employees in both retirement systems – those with less than five years of service as of July 1 – to work more years before they retire than they would have had to work under the retirement plan in place when they were hired.
‘This is the only way’
The changes, if they become law, would affect some 17,000 current ERB employees, Stewart said today. She said she didn’t know how many current PERA members they would affect.
Stewart argued that changing retirement plans for future employees isn’t enough to shore up the funds, so making changes to the plans of some current employees is critical.
She said the New Mexico Constitution allows the state to make changes to the plans of those she called “non-vested members” – those who haven’t worked five years and aren’t fully vested in their retirement plans.
“This is the only way for us to get enough funding into these retirement funds so that they last for people who want a retirement fund,” she said.
‘There are other ways’
Majority Leader Ken Martinez, D-Grants, disagreed
“There are other ways to shore up this plan,” he said, and though he didn’t go into specifics, he said improving the financial stability of the plans should not come “completely on the employees’ backs.”
Several others agreed, saying changing the plans of current employees was breaking a promise.
“I believe that this is a bait and switch on current employees,” said Rep. Sheryl Williams Stapleton, D-Albuquerque.
But Rep. Conrad James, R-Albuquerque, called the proposal “modest” and necessary. Rep. Dennis Kintigh, R-Roswell, agreed.
“This is one of these difficult, demanding decisions that will make some people unhappy, but that we must do for the good of this state,” Kintigh said. “If we fail to act, these retirement funds are in serious danger.”