New report: New Mexico has worst public pension situation in nation

The Competitive Enterprise Institute is a free market group based in Washington with which we sometimes work. They, like Rio Grande Foundation, are concerned about the fiscal impact of government employee pensions, specifically the fact that they are under-funded and poorly-designed in the first place. As time passes absent systemic reforms, these pension systems are destined to consume ever-greater public resources.

The RGF has known for years that New Mexico’s pension system was among the most troubled in the nation, but efforts to compare pension problems from state-to-state are challenging. The CEI report (available here) offers several different evaluations based on different methodologies each using their own calculation techniques. All of these are useful, but as Table 8 of the report illustrates, New Mexico’s pension system, when compared with those of other states, fares the worst when the various studies are factored together.

This poor result is particularly amazing considering the constant attention (at both the state and national levels) given to pension reforms in Illinois and other states facing pension issues.

Other states are dealing with the pension reform issue. Oklahoma recently shifted all new hires to a 401K-style system.