It was recently reported that “new regulations” would cause New Mexico schools to lose some of their most experienced substitute teachers. Those “experienced” teachers as it turns out are teachers who have recently retired from full-time teaching and apparently still like being in the classroom enough that they want to be substitutes on a fairly-regular basis.
So, what’s the problem? Simply put, issues with New Mexico’s pension system and changes to that system are limiting the amount of money teachers can make lest they unduly tax the already-underfunded ERB retirement program.
Where have we heard this before? Oh yes, in New Mexico police officers are limited in their ability to work past their mandated retirement age due to pension issues.
The solution for teachers is easy (although making the transition won’t be): put teachers on 401-K style defined contribution plans and get them off of the current defined-benefit plan that hamstrings their ability to work after they’ve retired. As far as police are concerned, it would seem that retired officers could keep their earned pensions and shift to a 401-K plan for earnings past retirement.
New Mexico’s pension plans are underfunded and inflexible. It is time for reform.
4 Replies to “Pension system problems cost NM teachers and police officers”
Don’t expect fundamental change of the NM public sector pension debt bomb as long as the state continues to have single party Dem rule. Single party Dem rule in nearly bankrupt Illinois has not had been willing to change the IL pension mess. Why expect anything different in NM?
What is never mentioned about the NM public sector pension debt crisis is that we DO have the money to make the public pensions whole: our permanent funds. Although the funds have constitutional protections, what makes you think that the Dems will not try to change the state constitution to get at those funds for public sector pensions?
Currently (’18) the ERB unfunded liability was $7.4 Billion.
Some might harangue that the Defined Benefit Retirement Plan is a rip-off. Others might note it is an exchange for a lesser salary (when compared to other states)…a delayed compensation, if you will. Kinda like, “Ya, we pay less here, but look what we give ya as per living in the “Enchanted Land” herein!!!!
~ Say, who is “responsible” for this getting so out of hand? Might it be the Public who votes for incompetent Legislators who had an inkling of the problem when Dan Mills reported in the ABQ Journal “$1.1 Billion Shortfall in State Pension Fund Feared” 12/10/03 and the Legislators have done nada? Let’s sock it to the Retirees and cancel their COLAs despite the cost of prescriptions, Medicare, Supplemental Health Insurance, property taxes, pet food, funerals, etc. continues to rise, i.e. go up! How about cutting those Legislator “pension” scams instead?
The problem with government pensions is that politicians have an incentive to give generous packages to employees today for political benefit when the requirement to pay those pensions will be on future politicians and generations.