New Mexico Gov. Michelle Lujan Grisham signed a bill Thursday that among other things, gives the $13 billion New Mexico Educational Retirement Board, Santa Fe, a one-time employer contribution increase of 0.25 percentage points, effective July 1.
Pension officials had sought an employer contribution increase to help get the pension plan to 100% funding within 30 years and to have parity with the 16.99% employer contribution rate of the $14.6 billion New Mexico Employees Retirement Association, Santa Fe. PERA also received a 0.25-percentage-point employer contribution increase.
The law also provides a tiered retirement multiplier for new hires to encourage longer careers, implements anti-spiking measures to prevent artificially increasing benefits and requires pension fund contributions from all working retirees and their employers. The bill also increased the minimum retirement age of employees hired on or before July 1, 2019, to 58 from 55.
The law also includes a requirement that any salary increase of more than 30% would have to be in place for several years — depending on the size of the salary hike — before the increase can be included in the final retirement benefit calculations.
"Our lawmakers ... moved quickly to enact legislation that protects the financial future of New Mexico's educational employees and their families," said Mary Lou Cameron, chairwoman of the New Mexico Educational Retirement Board in a written statement.
She added that the new law is a "major step forward in ensuring the long-term fiscal strength of the educational retirement fund."