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SANTA FE, N.M. (AP) — The House approved a proposal Tuesday to improve the solvency of New Mexico's public employee pension programs by establishing a minimum retirement age of 55 and limiting cost-of-living increases in some government workers' and educators' retirement benefits.
The changes would apply to employees who have worked for state or local governments, school districts or colleges for less than five years as of July.
The House approved the pension bill on a 37-32 vote Tuesday after finding enough votes to revive the measure, which had failed Sunday. The bill goes to the Senate, but there's little time left before the Legislature adjourns Saturday.
About 35,000 employees would be affected in the pensions administered by the Public Employees Retirement Association and the Educational Retirement Board, according to an analysis by the Legislative Finance Committee. However, the changes would not apply to police, firefighters, judges and legislators.
Opponents said changing pension eligibility for current public employees could trigger lawsuits. Any revisions, they said, should apply only to newly hired workers after legislation takes effect.
"I don't think it's fair that we change the rules in the middle of the game," said Rep. Debbie Rodella, D-Espanola.
But supporters said the Legislature must shore up the pension funds, and changes only affecting new hires won't significantly improve the solvency of the programs.
"People are in denial how bad it is," said Rep. Mimi Stewart, D-Albuquerque.
PERA has unfunded liabilities of about $3.4 billion and ERB has $4.9 billion. Both pension plans have a "funded ratio" — the proportion of assets to liabilities for promised benefits — below the industry benchmark of 80 percent. It's about 66 percent for ERB and 78 percent for PERA.
Under the legislation, there would be a minimum retirement age of 55 for state and local government workers, and a worker's age and years of work experience would have to total at least 80 to retire with full benefits.
For educators, retirement eligibility depends on when a teacher started work. There would be a minimum age of 55, with combined age and work experience equaling 75 for those hired before June 30, 2010. For those in the ERB pension system after that date, there would be a minimum age of 55 but a combined work and age requirement of 80.
The legislation reduces the cost-of-living adjustment for PERA-covered workers with less than five years of experience. Two years after they retire, they qualify for pension increases of 0.75 percent of the consumer price index, but it can be no more than 3 percent. Currently, PERA retirees automatically get 3 percent yearly cost-of-living adjustments, and that wouldn't change for workers with more than five years of experience or those already retired.
Stewart said the proposed cost-of-living adjustment for PERA will be in line with what's provided for ERB-covered employees.