Staff and wire reports
Some local teachers and administrators are disheartened by a new retirement proposal that may soon be forwarded to the Legislature by the state Educational Retirement Board.
Pension plans for public employees are likely to see dramatic changes after the New Mexico Legislature’s upcoming session, say lawmakers working to keep the retirement system solvent.
Among ideas proposed so far are making teachers work up to 10 years longer before they can retire, increasing employee contributions to retirement funds and using more realistic assumptions about investment returns.
To shore up finances, the Educational Retirement Board is considering making some teachers work longer and having them divert an additional half-percent of their salary toward retirement. The board is scheduled to vote on the proposed changes Dec. 10. The changes would also need approval of the Legislature, which convenes in mid-January.
Joel Shirley, deputy superintendent for Clovis schools, said the current changes under discussion will not only increase the amount of time until retirement but will also decrease the percentage of retirement pay.
“The more alarming part is that if you are under a certain age, there will be percentage reductions to a person’s retirement, no matter how long their years of service have been,” said Shirley. “But until they come out with their decision next week, one can’t really know how to react.
“It warrants being aware of and watching,” said Shirley, “but it’s too early to tell right now. That’s the advice I have given to employees is to just wait and see what decision comes out.”
Bill Allred, Clovis High School band director, said he will be disappointed if the state retirement board acts to offer such a proposal and the Legislature approves extending retirement.
“I would go from being 15 years short of retirement to 21 years short of retirement, so in short, it’s extremely disheartening and disappointing,” said Allred. “I love to teach and I love what I’m doing, but now what me and my family have planned for our future will be dictated and changed by the law.”
Allred said he and his wife, Robbie, a social worker for Parkview Elementary, are within one year of retirement. If approved, such a proposal will greatly change plans they have been making.
“When me and my colleagues heard the news yesterday, you could hear a pin drop,” Allred said. “No one knew what to say. We were stunned, speechless.
“I understand that budget cuts have to be made in these economic times, but do budget cuts always have to come from education? It feels like every time educators turn around, we are being hit with another budget cut. The state already recently gave us budget cuts this year and we are due for more in January. And now they want to change retirement.”
Legislators serving on a task force say it has become increasingly apparent that over the long term, the state cannot continue to pay what it has been providing to retired public workers. In the next two years alone, thousands of government employees are expected to file claims for benefits, including 13,700 in the educational retirement system.
One long-term concern is that workers are living longer and retiring earlier. And while the state’s big pension plans rely on returns from investments to cover the gap between incoming contributions and outgoing benefits, market losses in recent years added urgency to calls for overhauling the system. The idea of someday dipping into general-fund revenues to help pay retirement benefits is politically unpopular.
New Mexico’s pension plan for educators has an unfunded liability of nearly $5 billion, and its managers have a goal of getting 80 percent of that funded within 30 years, although Educational Retirement Board Director Jan Goodwin said the plan will be able to pay retired members for “many years to come.”