If you are a retiree from New Mexico state or local government, you probably recently received a letter from PERA telling you about your pension increase starting in July. PERA is the Public Employees Retirement Association, which administers your pension.<\/p>\n
You probably also received a packet from PERA inviting you to vote in the PERA board election, which is taking place now by mail. That packet contains a mail-in ballot, which must be received by Sept. 13 to count.<\/p>\n
Representatives of municipal and state employees will also be elected this year and should have received their mail-in ballots.<\/p>\n
Please take the time to vote for a representative on the PERA board. Information about the candidates is on the PERA website under \u201cBoard Elections.\u201d It is important to show you are paying attention. You almost lost the right to choose a board representative a couple of years ago, in a legislative attempt to reconstruct the board with mostly appointed instead of elected members.<\/p>\n
Don\u2019t get excited about the pension increase. The amount is puny. For most retirees, it\u2019s one-half of one percent \u2013 not enough to keep up with inflation.<\/p>\n
Some years ago, my accountant advised me I could afford to retire from state government. He cheerfully explained that my pension would include a 3% cost of living adjustment or COLA every year, and what a great deal that was.<\/p>\n
That\u2019s long gone. It\u2019s not likely coming back any time soon. The analysts realized that with the COLA, the fund would run out \u2013 the phenomenon known as unfunded liability.<\/p>\n
The PERA trust fund comes from two sources: deductions from the paychecks of active employees and their government employers, and the investment earnings of the fund. The number of retirees has been growing \u2013 45,000-plus at the last report \u2013 and the number of active employees has been declining \u2013 recently 47,000-plus, affecting the ratio of money out compared to money in.<\/p>\n
To recall the history: after 20 years with a 3% COLA, and a couple of years of strident arguments, the COLA was cut to 2% in 2013. Retiree organizations supported that change because it might save the fund \u2013 but it wasn\u2019t enough.<\/p>\n
In 2020 a more drastic change was enacted. The COLA was reduced to .5% for most retirees, with a possible future profit-sharing increase if the fund performs well, and adding a so-called \u201c13th<\/sup> check\u201d \u2013 an extra benefit check that, critically, does not compound \u2013 for three years. The three years are over.<\/p>\n The 13th<\/sup> check required an infusion of cash from the state general fund. If you want to wish for something that\u2019s possible, wish for another year of that.<\/p>\n The .5% increase is not keeping up with inflation, and some legislators are talking about whether they can help retirees in 2025. But restoring the COLA is unlikely.<\/p>\n On the back of the letter announcing your pension increase, you might see a little chart, indicating that your July pension would have a $30 deduction for your membership contribution to RPENM. RPENM is the Retired Public Employees, a private nonprofit organization whose purpose is to represent retirees.<\/p>\n If you had the deduction, you joined the organization and authorized the deduction. There\u2019s a similar line for AFSCME retiree members. Both organizations have made endorsements in the upcoming election.<\/p>\n The PERA board had a great deal of disruption a couple of years ago, but it\u2019s calmed down (thank goodness) and now its politics receive very little press coverage. So it\u2019s up to you to decide whether to follow any of these these endorsements or do your own analysis before voting. Just please vote.<\/p>\n \u00a9 2024 NEW MEXICO NEWS SERVICES<\/p>\n","protected":false},"excerpt":{"rendered":" If you are a retiree from New Mexico state or local government, you probably recently received a letter from PERA telling you about your pension increase starting in July. PERA is the Public Employees Retirement Association, which administers your pension. … Continue reading