New Mexico’s pension program for lawmakers started fifty years ago. Some taxpayers and public officials criticize this program. A few have filed lawsuits to stop legislative pensions. But state legislators generally prevail when it comes to preserving their own pensions.

The New Mexico Constitution provides per diem for state legislators, but says they shall not receive “other compensation, perquisite or allowance.” In 1987, attorney general Hal Stratton filed a lawsuit in district court, challenging the program on constitutional grounds.

After conflicting lower court rulings, the state Supreme Court issued a unanimous opinion in 1995. They portrayed “compensation” as “too remote and contingent” of a possibility for ex-lawmakers who might draw a pension after years of service in the Roundhouse.

The justices of the state Supreme Court reached this conclusion, in part, because lawmakers who served less than five years could not receive pensions and because “the legislator must remain alive until the earliest time that the benefits vest."

From 1987 to 1995, ex-lawmakers qualified for pensions if they served for at least 14 years, reached age 65 with 5 years of service, or both served from five to 12 years and reached an age between 60 and 64.

For each year served, a $100 contribution became an annual pension of $250. Under the rules in effect in 1995, a legislator who served for ten years would receive, once they reached age 64, an annual pension of $2,500.

“Under the reasoning in the decision,” Thom Cole once wrote about the Supreme Court’s decision on legislative pensions, “lawmakers could provide themselves with other additional benefits that pass the analysis of being ‘too remote and contingent’ to qualify as compensation.”

Since this state Supreme Court ruling, state legislators have made incremental changes to their legislative pension program. They have retained many of the program’s original features while also boosting benefits.

In 2003, state lawmakers created a Legislative Retirement Fund in the state treasury. They also initiated a new pension program to cover legislators who would retire from the Roundhouse after 2002.

At that time, state Sen. Stuart Ingle, R-Chaves, decided to pay for the legislative pension program by “taxing out-of-state royalty owners” of in-state oil and gas operations, he told the Santa Fe Reporter today in an interview.

Ingle’s proposal netted between $25 and $50 million annually. That money went into the general fund, with a little over $2 million put toward legislative pensions. “Not one penny of that comes from the citizens of New Mexico,” he said.

Roxanne Knight, who worked in Legislative Council Services in 2003, but has since retired, told SFR she developed the formula, based on past per diem and years of service, which PERA still uses to determine the pension amount for ex-lawmakers.

A bill that became law last year increased the annual contribution requirement for currently-serving state legislators, from $500 to $600. Senate Bill 114, sponsored this year by Ingle, in a forthcoming amendment, would raise the contribution to $700 annually .

SB 114 would also give pre-2003 legislators another chance for retirement benefits, if they paid a small fee, based on years of service. According to the Legislative Finance Committee, SB 114 would not impact the solvency of the pension program.

One report labels New Mexico’s pension system “generous.” Another article finds legislators can “stack their legislative pensions on top of their other government retirement benefits,” even though every other public employee can draw only one pension from the state.

Ingle said he “would never vote” for legislator salaries, which would lead to sessions six months out of the year. That “is the last thing we need to do.” Ingle added, “Sometimes I think we might need two 60-day sessions.”

“People have talked about how good our legislative retirement is,” Ingle said, “but if you serve for ten years in the Texas legislature you can retire for $30,000 a year.”

The 2012 bill requiring contribution changes passed unanimously in the state senate and with a wide majority in the state house. The governor signed the bill, even though she wanted to let state voters decide whether to ban legislative pensions.

By 2012, the Legislative Retirement Fund could cover all but $2.8 million of the program’s $25.9 million liability. State legislators usually transfer $2.4 million each year into the program. Contributions from 106 legislators generated $63,600 for the program last year.

The legislative pension program paid out a little over $900,000 last year to ex-lawmakers.
SB 114 would give pre-2003 legislators an annual pension of $5,000 for ten years of service. More recent legislative retirees, after ten years of service, and while the per diem rate remains $154, will receive an annual pension of $10,098.

Post-2002 lawmaker retirees can start drawing a legislative pension upon retirement if they served in the Roundhouse for at least 10 years. If legislators served for five to nine years, they can receive their legislative pension at age 65.

The current rules preclude any ex-lawmakers who served for less than five years in the Roundhouse, or just one term in the state senate or two terms in the state house, from drawing a pension.

Since at least 1987, the rules for the legislative pension program have included the lieutenant governor among the list of eligible state lawmakers.

The formula for legislative pensions still uses the per diem amount from the year a legislator retired to calculate benefits. But the PERA Board plans to apply cost-of-living adjustments to legislative retirement plans.

With over 163 retirees drawing legislative pensions, longer lifespans, quadrupled benefits, and fewer years of service required of ex-lawmakers below age 65, the program might still qualify as “contingent.” But whether this constitutes “compensation,” as some claim, seems less “remote.”

To hear the latest thoughts of legislators on the topic of their pensions, or to voice your own views, attend the Senate Rules committee meeting on Friday for the discussion of SB 114.