SANTA FE, N.M. (AP) — New Mexico Gov. Michelle Lujan Grisham threw her political weight behind a public pension reform proposal Tuesday that would increase retirement contributions by taxpayers and most state and local government workers.
In a statement, Lujan Grisham announced her endorsement of a so-called profit-sharing model that links cost-of-living increases for retirement payouts to the performance of pension investments. The governor’s office also touted support for the proposal from top-ranked lawmakers in the Legislature’s Democratic majority, including House speaker Brian Egolf and Senate majority leader Peter Wirth.
Unfunded pension obligations at the Public Employees Retirement Association have climbed to $6.6 billion for state and local government employees, triggering recent credit-rating downgrades for the state and its largest city, Albuquerque.
Lujan Grisham says the proposal she backs would put that pension fund on track to eliminate unfunded pension liabilities within 25 years.
Employee contributions would increase gradually over a four-year period to nearly 11% of pay from the current 9%. The state match would increase to 19.2% from 17.2%.
Taxpayer contributions would decrease slightly as the financial health of the pension fund improves.
The plan would stem the accelerating withdrawal of pension-fund assets by suspending cost of living adjustments until mid-2023. Pensioners instead would receive a 2% annual bonus payment on top of the same benefit each year.
Disabled, low-income and elderly retirees over the age of 74 would be sheltered from major pension adjustments, the governor’s office said.
Lawmakers have limited time to usher the proposal through the Legislature during a rapid-fire 30-day annual session that begins in January.