Governor signs pension changes into law

SANTA FE — Gov. Michelle Lujan Grisham signed into law Monday sweeping changes to New Mexico’s retirement system for police officers, firefighters and public employees — a move intended to strengthen the financial health of the state’s pension plan.

The bipartisan legislation, Senate Bill 72, will temporarily freeze cost-of-living adjustments for some retirees and require public workers and government agencies to pay more into the system.

The changes are intended to better position the Public Employees Retirement Association to withstand an economic downturn. The plan is now about 70% funded, with over $6 billion in unfunded liabilities.

The legislation was one of Lujan Grisham’s priorities for the 2020 session.

“By paying out more than it was taking in,” she said in a written statement, “PERA was on a path to eventual bankruptcy. Now we’ve reversed course, and I’m confident New Mexico can keep its promises to current and future retirees.”

Debate over the bill didn’t fall along partisan lines. Retirees turned out in force to object to proposed changes to the calculation of their annual cost-of-living adjustments.

But supporters said the changes, while painful, were necessary.

“We’re watching after everyone’s future and safeguarding the state’s bond rating,” Sen. George Muñoz, D-Gallup, said.

Senate Bill 72 was jointly sponsored by Muñoz and Rep. Phelps Anderson, R-Roswell.

During the session, Anderson told his colleagues that the bill was a unique chance to put PERA on firmer financial footing. Much of the new law is based on recommendations from a task force established by the governor.

“The path to PERA solvency would never have been accomplished without this bipartisan effort,” Anderson said.