New Mexico lawmakers grapple with proposal to help retirees combat soaring inflation

Amid rising inflation, the New Mexico organization that manages public employee retirement plans on Tuesday proposed a $250 million appropriation for ‘short term’ cost-of-living adjustment relief for retirees. Some state legislators, however, said they need more detail about the plan.

The Public Employees Retirement Association manages 31 retirement plans for state, municipal and county employees, which includes police, firefighters, judges and other government divisions. A little more than 50,000 retirees currently draw from the pension fund, PERA Executive Director Greg Trujillo told lawmakers on the interim Investments and Pensions Oversight Committee. The average annual pension, according to PERA’s website, is approximately $32,000.

The organization’s proposal to increase retirees’ cost–of-living adjustments comes amid various indicators about rising inflation. The Consumer Price Index Report, released by the Bureau of Labor Statistics on Wednesday, said inflation grew to 3.7% in September, up from 3.4% in August, largely fueled by rising oil and gas prices.

The proposal Trujillo outlined would supplement PERA retirees’ cost-of-living adjustments to 1.5% over the next years; last year, under the current formula, it was 0.5%.

“I feel this gets us the most bang for buck, and gives our retirees some options for planning,” Trujillo said. 

State Sen. Antoinette Sedillo Lopez (D-Albuquerque) said the proposal did not make clear to what degree retirees would be helped by the appropriation. She said she’d like to see “examples of what this means for the average retiree and how much more is going to go in their pocket” at the next interim committee hearing on the issue set in November.

Powered by spikes in energy prices, inflation surges to 3.7%

“What we’re trying to do is deal with the affordability issue that is caused by inflation,” she noted.

State Rep. Tara Lujan (D-Santa Fe) underscored that any COLA increase for retirees would need to be a part of a larger plan to address inflation in the next legislative session. 

“We don’t have the language to protect our retirees,” Lujan said. With a population that is rapidly aging, she added, lawmakers need to find ways to lower costs in utilities and medical expenses that would benefit retirees and all New Mexicans. “We all know we need to do something and we’re committed to doing that,” she concluded.