It’s a true thing. Sometimes the entity collectively called a newspaper makes an error. That’s because, besides soy ink and recycled paper, it’s made by human beings. As much as journalists fancy themselves heroes or muckrakers or protectors of the eternal flame, they’re really just servants. Servants to the truth. And that’s a good deal for everyone involved.Listen: Even Rod Carew had a few career errors, and I’m sure he wanted to tell his fans all about them after he missed this or that line drive when the sun was in his eyes. We’d like to do that too, but mostly—in this case—because the unforced errors in our first legislative update led to a good story.That story is about the people in this state who are working hard to make Michelle Lujan Grisham’s vision of a progressive state that takes care of its people—in particular its teachers—into a real, sustainable deal.ErrorsLast week we told you a little bit about HB46, a legislative initiative that has to do with the state’s educational retirement board. That board is headed by Jan Goodwin. She’s been at the helm of the organization that manages our teacher’s pensions and post-career health care since 2008.Goodwin called us last week to point out some errors in our first legislative update for the year 2020. And it’s a true thing. Besides an awkward error in the headline—a typo, as it were—we also misstated the intent of the bill pre-filed by state representative Tomas Salazar. The board is in fact asking for funding to preclude a rise in member contributions and not the other way around. Under this legislation, money would be appropriated to accommodate a small increase in contributions by employers, not employees.Of course the arcane wording of the bill didn’t help with our inaccurate interpretation and subsequent reporting. But that’s no excuse. Goodwin was concerned about teachers in this state reading what we wrote.Long story short, we told Goodwin we’d like chat on the phone this week and then let her tell the story of the New Mexico ERB and the legislative session that started on Tuesday afternoon. And that’s the truth.BackgroundAccording to Goodwin, there are 60,000 active members in the program that manages educational employee pensions in The Land of Enchantment as of June 30, 2019. She told Weekly Alibi, “We cover all of the educational employees in the state of New Mexico—college professors, public school teachers, community college employees, all of the public educational employees in the state—we also have 50,000 retirees. The amount we pay our retirees over the course of a year is $1.1 billion dollars.”Of course that money has a significant impact on employees and the communities they live in, Goodwin acknowledged. But where does that money come from?The ERB director explained that, “ERB is a pension plan, and to a certain extent it’s been prefunded. The way a defined benefit pension plan works is while the members are working, they make contributions and their employers pay contributions [too]. Right now we have a total of $13.6 billion dollars in investments.”That money in the pension plan, Goodwin continued, is fungible, “the way it’s set up, the employee, during their working years, between their contributions and their employers’ contributions, that all earns investment income. So when it’s time for them to retire and not pay contributions anymore, there’s money for them to retire.” ERB manages that entire process.HB46This year’s bill changes that system to benefit members of pension plan. Goodwin said the bill is part of this year’s budgetary process. Schools and universities get funding to pay their employees and their part of employer contributions into the retirement system. “Typically, when there’s an employer contribution increase for the K-12 people, it’s funded by the legislature at 100 percent. Last year, we had a one-quarter of one percent increase in employer contributions that was completely funded. But for the higher ed portion, it was only funded at about 60 percent. That means that higher ed has to take money from elsewhere to fund employer contributions.”ERB is not 100 percent funded, Goodwin reminded readers, but it is solvent and this year’s legislation will help improve sustainability, a long term shared goal of the legislature and the educational retirement board. But last year, the call for an increase in employer contributions didn’t get the governor’s signature.“That’s why we’re back this year asking for this increase,” Goodwin stated. “Instead of raising the employer contribution and having the concern that the higher ed portion won’t be fully funded-—it would be a huge strain for higher ed to pay that employer contribution—that’s why we’re asking for the money in such an unusual way.”This year, the money to fund some employer contributions to ERB would come directly from state coffers. “For fiscal year 2021, beginning July 1, 2020, we’re asking for an appropriation from the general fund. We’re asking for $50 million plus the equivalent of a 1 percent increase in the employer contribution.”If so funded—with a mind to the future of higher education in New Mexico—the state’s retirement fund will continue to be a valid marker of New Mexico’s overall economic health.And although the teacher pension plan in this state is solid and being captained by economists and accountants with deep respect for the importance of education in these parts, relieving the burden placed on underfunded universities and colleges by asking for money from the general fund— a fund that is now neck-deep in petro dollars—seems like a very reasonable request.
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