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.164423.1

SENATE JOINT MEMORIAL 6

48

TH LEGISLATURE

- STATE OF NEW MEXICO -

FIRST SESSION

, 2007

INTRODUCED BY

John Arthur Smith

FOR THE INVESTMENTS AND PENSIONS OVERSIGHT COMMITTEE

A JOINT MEMORIAL

REQUESTING A MORATORIUM ON BENEFIT-ENHANCEMENT LEGISLATION THAT

AFFECTS THE RETIREMENT SYSTEMS OF THE PUBLIC EMPLOYEES

RETIREMENT ASSOCIATION AND THE EDUCATIONAL RETIREMENT BOARD.

WHEREAS, Article 20, Section 22 of the constitution of New

Mexico states that the legislature shall not enact any law that

increases the benefits paid by a public employees retirement

system or an educational retirement system or changes the

funding formula for a retirement plan unless adequate funding

is provided to cover the cost of the new benefits; and

WHEREAS, the retirement systems' basic funding objective

is to meet long-term benefit promises to retirees and their

beneficiaries through contributions, which, when combined with

present assets and future investments, are sufficient to meet

the present and future financial obligations of the retirement

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systems; and

WHEREAS, investment market conditions can challenge the

actuarially assumed investment return of eight percent that is

used for purposes of actuarial valuations of the retirement

systems; and

WHEREAS, the actuarial soundness of these retirement

systems is absolutely necessary in order to maintain retirement

benefits for public employees and educators; and

WHEREAS, there has been a proliferation of legislative

proposals introduced in recent years that pertain to benefit

enhancements for different groups covered by the retirement

systems; and

WHEREAS, many of these proposals may adversely affect

other groups covered by the retirement systems, and passage of

multiple benefit-enhancement proposals in any legislative

session may cumulatively have a negative actuarial impact on

and cost to the retirement systems; and

WHEREAS, the retirement systems represent a significant

benefit to public employees and educators and need to be

protected from erosion by special interests and employer groups

that seek to address retention and recruitment issues through

benefit enhancements in lieu of salary increases;

NOW, THEREFORE, BE IT RESOLVED BY THE LEGISLATURE OF THE

STATE OF NEW MEXICO that a two-year moratorium on benefit-

enhancement proposals that affect the public employees

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retirement system and the educational retirement system be

imposed through December 31, 2008; and

BE IT FURTHER RESOLVED that all proposed legislation

pertaining to benefit enhancements to the public employees

retirement system and the educational retirement system be

tabled so that the true funded status of those systems can be

better ascertained; and

BE IT FURTHER RESOLVED that copies of this memorial be

transmitted to the legislative council service, the legislative

education study committee, the legislative finance committee,

the house appropriations and finance committee, the house

education committee, the senate education committee, the senate

finance committee, the office of the governor, the educational

retirement board and the board of the public employees

retirement association.

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