SENATE MEMORIAL 18

50th legislature - STATE OF NEW MEXICO - second session, 2012

INTRODUCED BY

George K. Munoz

FOR THE INVESTMENTS AND PENSIONS OVERSIGHT COMMITTEE

A MEMORIAL

REQUESTING THE CREATION OF A TASK FORCE TO EVALUATE THE MUNICIPAL AND STATE PUBLIC SAFETY MEMBERS RETIREMENT PLANS AND TO ASSESS OPTIONS AND MAKE RECOMMENDATIONS FOR CHANGES TO THOSE PLANS TO HELP ENSURE THEIR SOLVENCY.

     WHEREAS, the public employees retirement association has an unfunded liability of five billion dollars ($5,000,000,000), and approximately one billion dollars ($1,000,000,000) of this unfunded liability is attributable to the municipal police and fire member retirement plans; and

     WHEREAS, the retiree health care fund has an unfunded liability in excess of three billion dollars ($3,000,000,000), which is due in part to the expense of providing subsidized health care coverage for an extended period of time for relatively young retirees; and

     WHEREAS, the new governmental accounting standards board financial reporting standards will place these unfunded liabilities directly alongside the state's long-term bonded indebtedness and at the front of New Mexico's financial statements; and

     WHEREAS, New Mexico's bond ratings could be negatively affected by the enhanced reporting of the huge unfunded liabilities; and

     WHEREAS, attempts to cover the public employees retirement association's unfunded liability from increased contributions alone will be difficult, if not impossible, since the total of combined employer and employee contributions required to ensure the solvency of the fund is forty-eight percent of pay for municipal police and sixty percent of pay for municipal fire members; and

     WHEREAS, many local governments that are facing budgetary constraints currently pay seventy-five percent of their employees' contributions; and

     WHEREAS, reasonable solutions to address the unfunded liability of these retirement plans need to consider any unique health and safety aspects associated with the police, firefighters and other uniformed occupations; and

     WHEREAS, reasonable solutions also need to recognize the needs and concerns of state and local governments' abilities to recruit and retain qualified police and fire department personnel;

     NOW, THEREFORE, BE IT RESOLVED BY THE SENATE OF THE STATE OF NEW MEXICO that the New Mexico legislative council be requested to create the public safety pensions task force to evaluate the existing retirement plans for all municipal and state public safety members of the public employees retirement association and to assess the options and make recommendations for changes to those plans that will help ensure their continued solvency; and

     BE IT FURTHER RESOLVED that the task force provide its recommendations and their impact on the solvency of the plans to the interim investments and pensions oversight committee no later than October 1, 2012; and

     BE IT FURTHER RESOLVED that the public employees retirement association be requested to provide any necessary valuations and actuarial impacts of task force proposals as requested by the task force or the investments and pensions oversight committee on the public employees retirement association's actuarial valuation as of June 30, 2011; and

     BE IT FURTHER RESOLVED that the task force identify any unique health and safety aspects associated with police, firefighters and other uniformed occupations based on existing studies by recognized experts; and

     BE IT FURTHER RESOLVED that the task force be composed of the following nine members:

          A. one representative appointed by the international association of firefighters;

          B. one representative appointed by the New Mexico fraternal order of police;

          C. one representative appointed by the New Mexico state police;

          D. the chair of the public employees retirement association board;

          E. the executive director of the New Mexico municipal league;

          F. two members of the house of representatives, one from the majority and one from a minority party appointed by the speaker of the house of representatives; and

          G. two members of the senate, one from the majority and one from a minority party appointed by the senate majority floor leader; and

     BE IT FURTHER RESOLVED that copies of this memorial be transmitted to the chair and vice chair of the investments and pensions oversight committee, a representative of the international association of firefighters, the president of the New Mexico fraternal order of police, the secretary of the New Mexico state police, the chair of the public employees retirement association board, the executive director of the New Mexico municipal league, the speaker of the house of representatives and the president pro tempore of the senate.