New Mexico Gov. Bill Richardson has signed legislation requiring the $6.7 billion New Mexico Educational Retirement Board, Santa Fe, to study the implications of moving to a defined contribution plan for new employees. The pension system's unfunded liability increased to $2.4 billion from $1.7 billion over the 12 months ended Dec. 31, and the study is supposed to determine whether the state can afford to continue the defined benefit plan, according to the bill's fiscal impact report. Results of the study are expected by Sept. 20.
A bill that would fund an actuarial analysis of the state's two retirement funds — the educational board and the $9.4 billion New Mexico Public Employees' Retirement Association, Santa Fe — passed the House and is before the Senate Finance Committee. According to the bill's fiscal impact report, legislators are concerned that liabilities are understated in the plans' annual actuarial analysis due to smoothing of investment losses.