Minimum retirement age proposed for NM educators

SANTA FE, N.M. (AP) — New Mexico's retirement program for teachers and college faculty is considering proposals to shore up its long-term finances by establishing a minimum retirement age for some educators and limiting cost-of-living increases for retirees.

The Educational Retirement Board will make a decision next month on a package of pension changes to recommend to the Legislature, which debated a measure earlier this year that would have established a minimum retirement age of 55 for some educators and public employees.

The pension program covers 97,000 current workers and retirees.

The most far-reaching proposal would establish a minimum retirement age of 62 for educators hired in the future and some current workers. It would not apply to those educators within 10 years of retirement under existing eligibility provisions. The proposal also would eliminate cost-of-living adjustments for retirees, including the 35,000 already getting pension checks.

Currently, most educators can retire with full benefits at any age after working for at least 25 years, although that has increased to 30 years for those hired starting in July 2010.

Before making a decision on its legislative recommendations, the board and its staff are holding meetings across the state to hear from retirees and workers on six different plans for revamping their pension system.

Proposals call for retirement ages ranging from 50 to 62. Those would be in combination with other changes, such as one plan that would require retirees to wait until age 67 before getting an inflation adjustment in their pension payments. Most retirees currently qualify for an increase at age 65.

Some proposals would revise how retirement benefits are calculated, such as basing them on a seven-year average of a worker's salary. Stretching out that calculation beyond the current five-year period would lower retirement benefits of most workers. In some instances, proposed pension changes would not apply to workers who are within five years of retiring.

ERB executive director Jan Goodwin said the goal is to improve the pension fund's finances as much as possible "to assure all the members that their retirement benefits will be paid out to them when they retire."

"The longer we wait to address plan sustainability the greater the changes are going to have to be," Goodwin said Friday in an interview.

The educational pension system has unfunded liabilities of about $5.9 billion for retirement benefits promised to current and future retirees.

Goodwin said the proposed changes will improve the pension program's "funded ratio" — the proportion of assets to liabilities for promised benefits — to nearly the industry benchmark of 80 percent by 2030. Currently, it's about 62 percent.

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