After a full day of discussion during the Public Employees Retirement Association of New Mexico (PERA) Board Annual Meeting, the Board, on a 9-3 vote, passed a Resolution in support of Governor Lujan Grisham’s Solvency Task Force Recommendations.
The Board also committed to working with the Governor’s Task Force to finalize recommendations for the 2020 Legislative Session.
The recommendations propose several changes to PERA’s defined benefit plan including establishing a new profit share cost of living adjustment, phased increases in employer and employee contributions and eliminating the 7-year Cost of Living Allowance (COLA) wait period for retirees and returning to a 2- year waiting period. If enacted, the recommendations would result in an immediate reduction in PERA’s unfunded liability of nearly $700 million and put the Plan on a path to being fully funded within 25 years.
“I am pleased that the PERA Board voted overwhelmingly to commit to working with the Governor and Legislature to pass comprehensive pension reform during the 2020 Legislative Session within the framework of the Governor’s Task Force recommendations. The Governor has shown great courage in taking up the real challenges PERA is facing and as the Task Force demonstrated, people of good will who work together for the greater good can find solutions to problems. There is more work to be done and the PERA Board is ready to get to work.” said Board Chair Jackie Kohlasch.
The Solvency Task Force comes from an Executive Order signed by Governor Lujan Grisham calling for the establishment of a nineteen member task force to provide recommendations to address PERA’s $6.1 billion unfunded liability. The final recommendations will be presented during the 2020 Legislative Session.