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If you are a retiree from New Mexico state or local government, you probably recently received a letter from PERA telling you about your pension increase starting in July. PERA is the Public Employees Retirement Association, which administers your pension.
You probably also received a packet from PERA inviting you to vote in the PERA board election, which is taking place now by mail. That packet contains a mail-in ballot, which must be received by Sept. 13 to count. You must sign the outer envelope.
Municipal and state employees will also be electing representatives this year and should have received their mail-in ballots.
Please take the time to vote for a representative on the PERA board. Information about the candidates is on the PERA website under รขโฌลBoard Elections.รขโฌย It is important to show you are paying attention. You almost lost the right to choose a board representative a couple of years ago, in a legislative attempt to reconstruct the board with mostly appointed instead of elected members.
Donรขโฌโขt get excited about the pension increase. The amount is puny. For most retirees, itรขโฌโขs one-half of one percent รขโฌโ not enough to keep up with inflation.
Some years ago, my accountant advised me I could afford to retire from state government. He cheerfully explained that my pension would include a 3% cost of living adjustment or COLA every year, and what a great deal that was.
Thatรขโฌโขs long gone. Itรขโฌโขs not likely coming back any time soon. The analysts realized that with the COLA, the fund would run out รขโฌโ the phenomenon known as unfunded liability.
The PERA trust fund comes from two sources: deductions from the paychecks of active employees and their government employers, and the investment earnings of the fund. The number of retirees has been growing รขโฌโ 45,000-plus at the last report รขโฌโ and the number of active employees has been declining รขโฌโ recently 47,000-plus, affecting the ratio of money out compared to money in.
To recall the history: after 20 years with a 3% COLA, and a couple of years of strident arguments, the COLA was cut to 2% in 2013. Retiree organizations supported that change because it might save the fund รขโฌโ but it wasnรขโฌโขt enough.
In 2020 a more drastic change was enacted. The COLA was reduced to 0.5% for most retirees, with a possible future profit-sharing increase if the fund performs well, and adding a so-called รขโฌล13th checkรขโฌย รขโฌโ an extra benefit check that, critically, does not compound รขโฌโ for three years. The three years are over.
The 13th check required an infusion of cash from the state general fund. If you want to wish for something thatรขโฌโขs possible, wish for another year of that.
The 0.5% increase is not keeping up with inflation, and some legislators are talking about whether they can help retirees in 2025. But restoring the COLA is unlikely.
On the back of the letter announcing your pension increase, you might see a little chart, indicating that your July pension would have a $30 deduction for your membership contribution to RPENM, the Retired Public Employees, a private nonprofit organization whose purpose is to represent retirees.
If you had the deduction, you joined the organization and authorized the deduction. Thereรขโฌโขs a similar line for AFSCME retiree members. Both organizations have made endorsements in the upcoming election.
The PERA board had a great deal of disruption a couple of years ago, but itรขโฌโขs calmed down (thank goodness) and now its politics receive very little press coverage. So itรขโฌโขs up to you to decide whether to follow any of these endorsements or do your own analysis before voting. Just please vote.
Contact Merilee Dannemann through www.triplespacedagain.com.