Top Stories for Friday, December 10th, 2010:

Las Cruces Bulletin

Board may delay educators’ retirement

Saving for retirement may cost more and happen later


By Todd G. Dickson

Las Cruces Bulletin

A state board is looking to change require­ments for retirement that has all New Mexico educators – from teachers to professors– worried that they will have to put off retirement.

“I’ve already had several faculty – including department heads – tell me that this will add another six years of working before they can re­tire,” said David Boje, a New Mexico State Uni­versity business professor who has submitted a memorial resolution to the Faculty Senate.

Citing the need to ensure long-term fund solvency to pay out retirement benefits, the New Mexico Educational Retirement Board (ERB) is proposing slight increases in how much teachers, instructors, professors and oth­er state educators contribute to the fund and increasing the years of service from 25 or 30 years – depending on whether they were hired before or after July 1 – to 35 years. For educa­tors hired before that date, the retirement age without loss of benefits would shift to 60 from a dual-reduction rate depending on whether they retire before 55 or retire between 55 and 60. A rate determined by age and plus five years of services would increase from 65 to 67.

There would be no reduction in benefits for years of service retirement, and the final average salary would be based on the highest seven consecutive years, two more years than currently used.

If passed by the Legislature, the new rules would go into effect July 1, 2011.

The memorial before the NMSU Faculty Senate contends the proposal dashes expecta­tions of educators who have been paying into the fund under the current rules.

Boje said that’s the biggest rub with educa­tors nearing retirement age – that they have made plans based on certain expectations. If there are going to be higher contributions and retirement requirements, they should only be

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for new people entering the system, he said.

The fund’s long-term solvency shouldn’t be put on the backs of those who already have put in many years of service to the state, Boje said.

“They’ve earned that,” he said. “They’ve paid their dues.”

Experienced full-time faculty believe the new rules will delay their retirement by four to seven years and part-time faculty by seven to nine years, he said.

The memorial supports statements by NMSU President Barbara Couture, who told faculty in a December memo that she took a leadership role in the Council of University Presidents that urged the ERB to listen to the concerns of educators before making a final recommendation to the Legislature.

Also, the proposal is much more than is needed to keep the fund solvent over the long run, according Couture’s memo. The council also urges ERB to create a “safe harbor” for employees with 22 years or more of service.

Though the ERB proposal impacts public school teachers, Boje notes that most higher education faculty enter the workforce at a much later age.

According to news reports, ERB is looking for ways to rebound from losses in recent years to the retirement funds, as well as a growing demand by more people retiring and living longer.

ERB Executive Director Jan Goodwin has been quoted as saying the goal is to achieve 80 percent funding for the retirement plan and pay off unfunded liability within 30 years, projected to be $9 billion in 2039. But Couture’s memo states the Council of University Presidents believes the proposals actually amount to 102 percent funding of those liabilities over 30 years.

Couture said in the Dec. 6 memo that ERB staff will visit with NMSU staff Monday, Dec. 13. But, she notes, that will be after the board meets Friday, Dec. 10, to make a final decision on the proposal.

In 2005, the Legislature agreed to increasing the contribution level to keep the fund solvent.

An estimated 63,000 public education employees will be affected by whatever changes are approved.





David Boje, a New Mexico State University business professor, is working with the NMSU Faculty Senate to raise formal objections to proposed changes to the state education retirement fund that would cause many faculty planning to retire soon to delay those plans by four to seven years.

Las Cruces Bulletin photo by Todd Dickson