SANTA FE-Teachers in New Mexico will receive fewer benefits and make larger personal contributions to reduce a $6.2 billion deficit in their pension program.
Gov. Susana Martinez on Friday signed a bill altering the educational retirement program in hopes of reducing its financial liabilities during the next 30 years.
"Our negotiations with the Legislature resulted in several concessions and improvements to bolster the system's long-term solvency and moved us toward our ultimate goal of saving more than $6 billion over the next three decades," she said. "Ultimately, this bill is an important step forward, and I will continue to work with legislators from both parties to make any necessary adjustments to ensure the fund's future solvency."
One change reduces the program's cost-of-living adjustment from an average of 2 percent to an average of 1.8 percent or 1.6 percent, depending on an individual employee's circumstances.
This reduction will be in place until the fund is 90 percent solvent. At that point, the adjustment would move to averages of 1.9 percent or 1.8 percent.
Employee contributions will increase from 9.4 percent to 10.7 percent as the second key component of reducing the plan's debt.
In addition, a new minimum retirement age of 55 or earlier with reduced benefits goes into effect.
The age for eligibility for cost-of-living increases moves to 67 for new plan members. Currently, the eligibility age is 65.
Those covered under the educational retirement pension include schoolteachers, college faculty and other employees in public education.
Sen. Stuart Ingle, R-Portales, sponsored the pension bill. It carried 41-0 in the Senate.
More debate occurred in the House of Representatives, where 13 of the 70 members voted against the bill.