Newcomers might not get lucrative legislative pensions
By Google News Personal Finance ·
No group in New Mexico has been greedier than the state Senate and House of Representatives.
They can disagree with my assessment, but their stories of self-sacrifice without compensation defy the truth.
Legislators increased their own pensions by 27% in 2022 and another 50% in 2024. They need 10 years' service and an annual personal contribution of $1,000 to qualify for this taxpayer-funded compensation.
Unlike other workers, lawmakers can start collecting their pensions at any age after leaving office. Republican Rep. Dan Foley of Roswell was 39 when he lost his seat in 2008 and became a pensioner. His benefit will last a lifetime.
Even felony convictions are no obstacle to receiving a legislative pension. Manny Aragon, the corrupt old Democratic senator from Albuquerque, collected $27,000 annually while he was in a federal prison from 2009-13.
The pension plan lawmakers created for themselves is far better than the retirement compensation of other public employees or people who worked in the private sector. A sitting lawmaker who was in office for the minimum 10 years is eligible for a pension of about $30,000 annually. The many legislators with longer tenures are in line for pensions ranging from $60,000 to more than $100,000 a year.
A notable sidelight is they fattened their pensions during 30-day legislative sessions. Lawmakers will tell you how difficult it is to pass a bill in so short a session. When it came to serving themselves, they twice beat the clock with ease.
Now it seems they only paused the debate. A small measure of sanity on how at least some legislative pensions are structured and paid might be in sight. The reason is voters last week approved a base salary for legislators.
Starting in 2029, lawmakers will be eligible to receive a beginning salary equivalent to the median income of a household in New Mexico. That amount is now estimated at almost $68,000 a year. It probably will be higher by the time the salaries go into effect.
Legislators have the option of taking or declining the salary. Why would anyone turn it down? Protecting an exceptional pension will be quite a motivator for incumbents.
Sitting legislators who decline the salary would avoid designation as state employees. This would enable them to remain in their special retirement program with the promise of sizable payouts at any age.
Other incumbents without much seniority might take the salary rather than risk defeat in an election before being vested in the pension program.
As for newly elected legislators, they are certain to take the salary if a forthcoming bill by Sen. Natalie Figueroa is approved. Figueroa, D-Albuquerque, proposes to bar the newcomers from the existing Legislative Retirement Plan.
They could instead enroll in the pension plan for other public employees in New Mexico. Their perks would not approach what incumbent legislators have handed themselves.
One possibility under Figueroa's plan is new legislators contributing almost 11% of their salary to the pension fund if they want retirement income. That is quite a jump from the token $1,000 donation in effect for sitting lawmakers.
Newcomers would qualify for pension payments at age 65 if they have five years' service, or at any age with 25 years' service.
To be seen is how quickly, if at all, legislators begin hearings on Figueroa's bill after their 60-day session starts on Jan. 19. Will they stall for a year or two to assist incumbents who are close to being vested…
Originally published by Google News Personal Finance
