SANTA FE, N.M. (KRQE) – Lawmakers were tasked with finding the best way to fix the public employee retirement fund or PERA. It’s about $6 million in the hole, a result or PERA’s mismanagement, bad investments and dishing out more pension money than what the state has collected.
Firefighters, public employees and retirees filled the committee room Monday arguing they should not have to pay for the mistakes of the past. The proposed solution had lawmakers split.
“It’s tough because this thing has elements I can buy, but has elements like the profit-sharing I don’t believe is going to come true,” said Sen. John Sapien.
Senate Bill 72 would increase the contributions of state and local employees and employers by 2% over the next four years, except if any employee is a correctional officer or someone making less than $25,000.
The bill would also suspend the cost of living adjustments for retired employees until 2023 and after that, reduce them until the fund becomes solvent. That is one of the most controversial stipulations.
Many employees say it puts them in a tough spot trying to pay their bills. The goal is to be 110% solvent for PERA in 25 years but some lawmakers say that timeframe is too short.
“People have to understand this is based on a best guess. It’s like doing a budget, we can’t predict what the revenue streams are going to be in the state and we can’t predict how these funds are going to perform… it’s very likely we’ll be back in three, four, five years again,” said Sen. Sander Rue.
Senate Bill 72 did cause some drama in the committee room Monday, but it came from a PERA board member who went off-topic on allegations against the governor. Her comments stopped after Senator John Arthur Smith had to tell her several times to stay on topic.
The bill passes 10 to 2 and the governor has made it clear she supports the bill.