NMERB 2018 Sustainability Survey
RequiredRequired Question(s)
Dear Member of the NMERB Community:

We are asking you to complete this survey, so the NMERB Board can be informed as to what types of changes you will support to improve the sustainability of our pension plan. Although NMERB has the ability to pay all the benefits our members have earned into the future, the road to 100 percent funding is too long. Like many pension plans, NMERB is underfunded and if no changes in contributions or benefits are made it will take many decades for the pension plan to be 100 percent funded.

Last fall the NMERB Executive Director and Deputy Director visited with members across the state to update them on NMERB's status, the need to improve sustainability and why 100 percent funding is important. For a pension plan, sustainability means being able to pay all benefits and reach 100 percent funding in a reasonable length of time. For NMERB, being 100 percent funded would mean that the reductions in the Cost of Living Adjustment (COLA) for our retirees will end and member/employer contribution rates can be lower. In addition, if a pension plan is 100 percent funded, it can better withstand financial market downturns. Materials from those meetings and a videotape of one of the sessions are on our website: www.nmerb.org.

As you complete the survey, you will see that some of the options are scored on a 1 to 5 scale. These scores show how much of an impact each option has on improving NMERB's sustainability with 1 having the least impact and 5 having the most positive impact.

When you are done answering all of the questions, please feel free to add any other comments you have in the space provided.

Thank you for taking time to complete this survey.
 
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Please check the box that best describes who you are.  

Active member (currently working at an NMERB employer)
Inactive (not working or contributing to an NMERB employer)
Retired (retired through NMERB)
General Public
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Did you attend one of the presentations on the recent Listening Tour?  

Yes
No
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Contribution

The current employee contribution rate is 7.9 percent for those with a salary of $20,000 or less per year; 10.7 percent for those with a salary more than $20,000 per year. Current employer contribution is 13.9 percent.  


The numbers below are for potential increases in contributions. The June 30, 2017 total payroll was $2.6 billion and the numbers are based on that.
 Support Neutral Do Not Support   
Increase employer contribution immediately by 1%. This will add an increase of approximately $26 million to the fund annually. (Score 2)   
Increase employer contribution immediately by 2%. This will add an increase of approximately $52 million to the fund annually. (Score 3)   
Increase employer contribution immediately by 3%. This will add an increase of approximately $78 million to the fund annually. (Score 4)   
Increase employer contribution immediately by 4%. This will add an increase of approximately $104 million to the fund annually. (Score 5)   
Increase employer contribution by 3%, but phased-in 1% per year for 3 consecutive years. This will add $26 million in year 1, $52 million in year 2, and $78 million in year 3. (Score 4)   
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Cost of Living Adjustment (COLA)

If NMERB were to pay no future COLAs, the Unfunded Actuarial Accrued Liability (UAAL) would decrease by approximately $2.5 billion. This amount is based on the same assumptions and methods that were used for the June 30, 2017 actuarial valuation. The June 30, 2017 UAAL was $7.4 billion.

   

The current COLA information can be found on the NMERB website at: http://www.nmerb.org/cost_livinghand.html 

 Support Neutral Do Not Support   
Eliminate Cost of Living Adjustment (COLA) until 100% funded. (Score 5)   
Eliminate Cost of Living Adjustment (COLA) for 10 years--then return to current COLA formula. (Score 3)   
Eliminate Cost of Living Adjustment (COLA) for 5 years--then return to current COLA formula. (Score 2)   
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Potential Changes for New Hires 
NMERB's current multiplier is 2.35 percent.
 Support Neutral Do Not Support   
Lower benefit multiplier to 2% for new hires (Score 2)   
Institute benefit multiplier for new hires on a tiered structure based on length of service to result in a 2.35% for a 30-year work history (Score 2)   
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Working in Retirement  

NMERB retirees are permitted to work (for a NMERB employer) in retirement if they participate in the Return to Work (RTW) Program. The statute allowing this program expires after December 31, 2021. Retirees who participate in the RTW program pay contributions on their earnings as do their employers. The retirees in the RTW program have no cap on their NMERB earnings in retirement and must complete a twelve-month layout before returning to work for an NMERB employer.  


NMERB Board Rule 2.82.5.16 allows NMERB retirees to work part-time for NMERB employers and caps their earning at the greater of $15,000 or .25  of a full-time equivalent, without completing a layout. Neither the NMERB retiree or the employer pay contributions to NMERB or the retirees' earnings.
The contributions not collected from the Return to Work Exception Rule were approximately $6.3 million for the year ending June 30, 2017. 

Participants in the various return to work programs for the year ending June 30, 2017 were:
Return to Work Program: 1,434
Return to Work Exception: 1,791 
 Support Neutral Do Not Support   
Allow the Return to Work program to end as provided in statute. (Score 2)   
Eliminate the NMERB Return to Work Exception Rule for NMERB retirees. (Score 2)   
All NMERB retirees wanting to work for NMERB employers during retirement must first lay out six months, and they and their employers will pay contributions on income. There is no cap on earnings. (Score 1)   
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Retirees working at NMERB employers 

Some New Mexico Public Employees Retirement Association (PERA) retirees work for NMERB employers. The PERA retirees pay no contribution on their NMERB earnings and the NMERB employers pay the 13.9 percent employer contribution on their earnings.The employee contribution not collected from PERA Return to Work statute was approximately $2.2. million for the year ending June 30, 2017.

 

797 PERA Retirees worked for NMERB employers during the year ended June 30, 2017. 

 Support Neutral Do Not Support   
Make PERA retirees pay contributions if working for an NMERB employer. (Score 2)   

Comments and additional thoughts. 

 

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