HOUSE JOINT MEMORIAL 9

53rd legislature - STATE OF NEW MEXICO - first session, 2017

INTRODUCED BY

Tomás E. Salazar and Deborah A. Armstrong

A JOINT MEMORIAL

REQUESTING THE STATE TREASURER TO CONVENE A RETIREMENT INCOME SECURITY TASK FORCE TO IDENTIFY THE OPTIONS AND PROCESS FOR IMPLEMENTING A RETIREMENT SAVINGS VEHICLE FOR PRIVATE-SECTOR EMPLOYEES HAVING LIMITED OR NO ACCESS TO A RETIREMENT SAVINGS ARRANGEMENT AT WORK.

     WHEREAS, the United States is facing a vast retirement savings deficit, estimated to be as much as six trillion six billion dollars ($6,600,000,000,000), or about fifty-seven thousand dollars ($57,000) per household; and

     WHEREAS, it is estimated that fifty-three percent of American workers aged thirty and older are on a path that will leave them unprepared for retirement; and

     WHEREAS, the median retirement account balance is two thousand five hundred dollars ($2,500) for all working-age households and fourteen thousand five hundred dollars ($14,500) for near-retirement households; and

     WHEREAS, of the seventy-five million workers in the United States with access to a retirement savings plan, only eighty- one percent of these workers participate in a retirement savings plan; and

     WHEREAS, fifty-five million American workers do not have any type of employer-sponsored retirement plan, leaving them more likely to rely on social security income as their only source of retirement income; and

     WHEREAS, three out of five families headed by a person aged sixty-five or older have no money in retirement savings accounts; and

     WHEREAS, the median household headed by a person aged sixty to sixty-two with a 401(k) account has less than one-fourth of what is needed in that account to maintain its standard of living in retirement; and

     WHEREAS, about sixty-two percent of New Mexico workers aged eighteen to sixty-four in the private sector work for businesses that do not offer a retirement plan; and

     WHEREAS, more than one-half of all older New Mexicans rely on social security income for more than fifty percent of their family income; and

     WHEREAS, roughly thirty-three percent of those aged sixty-five or older in New Mexico have ninety percent or more of their income coming from social security; and

     WHEREAS, social security benefits average only about one thousand one hundred sixty dollars ($1,160) per month in New Mexico, so many workers rely on employer-sponsored retirement plans to supplement their income as they age; and

     WHEREAS, helping New Mexico residents to become financially secure and live independently as they age saves taxpayer dollars on social safety net programs; and

     WHEREAS, the interim investments and pensions oversight committee of the legislature has recognized the need to develop retirement savings options for New Mexicans who have no access to retirement savings options other than social security; and

     WHEREAS, the retiree rights organization AARP and the financial industry have proposed several options for increasing retirement income security to the interim investments and pensions oversight committee;

     NOW, THEREFORE, BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO that the state treasurer be requested to establish a retirement income security task force to study the preparedness of New Mexicans to retire in a financially secure manner, including an evaluation of the options, process and legislative proposals to implement a retirement savings vehicle for private-sector employees having limited or no access to a retirement savings arrangement at work; and

     BE IT FURTHER RESOLVED that the retirement income security task force:

          A. determine the number of employees in the state not currently participating in an employer-sponsored retirement savings plan or arrangements;

          B. determine the number of employers in the state that do not offer an employer-sponsored retirement savings plan;

          C. consult with AARP New Mexico and other experts from the private and nonprofit sector concerning the establishment and operation of high-quality and low-cost retirement savings plans that are governed by federal law and that qualify for tax-favored treatment under the state and federal tax codes;

          D. perform an analysis to determine the best model for a statewide retirement income security plan;

          E. develop criteria for participation by employees and employers;

          F. perform an analysis of the cost to the state to implement a statewide retirement income security plan;

          G. determine the cost to employers for participation in a statewide retirement income security plan;

          H. determine the effect, if any, that the implementation of a statewide retirement income security plan may have on economic activity in this state;

          I. explore other programs and incentives that can lead to an increase in the percentage of financially secure retirees in the state;

          J. determine the financial impact to the state's social safety net programs and general fund if the state fails to act to improve citizen access to retirement savings opportunities at work; and

          K. prepare and submit a report to the interim committee charged with reviewing matters related to investments and pensions by November 1, 2017; and

     BE IT FURTHER RESOLVED that the state treasurer be requested to invite the following individuals to join the task force:

          A. one representative appointed by the speaker of the house of representatives;

          B. one representative appointed by the president pro tempore of the senate;

          C. one representative appointed by the minority leader of the house of representatives;

          D. one representative appointed by the minority leader of the senate;

          E. the secretary of aging and long-term services or the secretary's designee;

          F. the secretary of finance and administration or the secretary's designee;

          G. the secretary of workforce solutions or the secretary's designee;

          H. the secretary of economic development or the secretary's designee;

          I. the state investment officer or the state investment officer's designee;

          J. the executive director of the public employees retirement association or the executive director's designee;

          K. the director of the securities division of the regulation and licensing department or the director's designee;

          L. one representative of AARP New Mexico, designated by AARP New Mexico;

          M. one member of the state's business community appointed by the state treasurer;

          N. one representative of a nonprofit entity in the state appointed by the state treasurer; and

          O. one representative of a labor union operating in the state appointed by the state treasurer; and

     BE IT FURTHER RESOLVED that the retirement income security task force be requested to report its findings and recommendations to the interim committee charged with reviewing matters related to investments and pensions by November 1, 2017; and

     BE IT FURTHER RESOLVED that copies of this memorial be transmitted to the governor, the president pro tempore of the senate, the speaker of the house of representatives, the state treasurer, the secretary of aging and long-term services, the minority leader of the senate, the minority leader of the house of representatives, the secretary of finance and administration, the secretary of workforce solutions, the secretary of economic development, the state investment officer, the executive director of the public employees retirement association, the director of the securities division of the regulation and licensing department and the state director of AARP New Mexico.

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