PERA\u2019s fund is doing well.<\/p>\n
That\u2019s very good news for you if you are one of the thousands of former state or local government employees who rely on PERA (Public Employees Retirement Association) for all or part of your retirement income. (Disclosure: that includes me.)<\/p>\n
PERA\u2019s assets have almost doubled since the stock market cratered at the end of 2008. The fund now has close to $14 billion, with current earnings at roughly 17 percent. The \u201cunfunded liability\u201d \u2013 the projection of how much money will be owed over time compared to what\u2019s available \u2013 is still worrisome but going down. This was accomplished in part by legislation in 2013 in which PERA-covered employees and retirees accepted a package of benefit reductions.<\/p>\n
If you\u2019re not covered by a secure pension, you could ask how any of this benefits you or why you should have the slightest interest in the solvency of these programs. It\u2019s a common question.<\/p>\n
Here\u2019s my answer: First, public service work is valuable work, and communities benefit when people who have expertise in their jobs keep working at them. Second, the whole community benefits some of its members have stable, secure retirement income.<\/p>\n
Government workers are distributed everywhere, including the smaller and poorer communities. Their purchases help keep the stores open. If they stay in their home communities after they retire, they\u2019re a positive economic factor.<\/p>\n
With public pensions under attack in some other states, it\u2019s worth mentioning this every now and then.<\/p>\n
After years of angst finding a formula that would restore PERA to stability, suddenly the program is faced with a new problem: a city with a policing problem.<\/p>\n
Albuquerque\u2019s big municipal police force is losing officers to an increase in retirements, due in part to those very changes that saved PERA \u2013 reduction in the way benefits are calculated. The city has more than 1,000 officers at full strength but is already down by about 200, with more retirements expected. To retain experienced officers, the city has voted to offer salary increases to officers who stay. Other municipalities facing the same issue may want to do the same.<\/p>\n
This extra salary translates into extra pension. In the normal course of careers, contributions to the pension fund increase gradually over time. Between the employee and employer contributions, plus earnings on those funds, the total should cover that employee\u2019s pension benefits \u2013 at least, that\u2019s the theory. When a large group of employees get a big bump in salary right before they are due to retire, it throws off the numbers.<\/p>\n
So, on one hand, it\u2019s a relief that a legislative interim committee has been sympathetic to the proposal offered by PERA director Wayne Propst. Propst asked for a five-year moratorium on changes, to let the fund\u2019s stability improve in the wake of the recent reforms.<\/p>\n
On the other hand, the police problem is a serious concern, and it\u2019s a statewide concern. Ironically, as retirements and vacancies increase in Albuquerque, it\u2019s not unlikely that the city will draw replacements from the police forces of outlying communities.<\/p>\n
And finally, a five-year legislative moratorium is unenforceable. Even if the full legislature enacts a bill (or more likely, a memorial, which doesn\u2019t have the force of law) it would be merely a statement of intention, and intentions can change.<\/p>\n
This issue is sure to pose a challenge when the legislature convenes in January, I\u2019m hoping legislators can find a solution that doesn\u2019t hurt one legitimate public interest at the expense of the other.<\/p>\n
Triple Spaced Again, \u00a9 New Mexico News Services 2014<\/p>\n","protected":false},"excerpt":{"rendered":"
PERA\u2019s fund is doing well. That\u2019s very good news for you if you are one of the thousands of former state or local government employees who rely on PERA (Public Employees Retirement Association) for all or part of your retirement … Continue reading