New Mexico Teachers Pension Fund Calls for Belt-Tightening

Fund for state and municipal workers scrambles to find own bailout blueprint to patch up funding.

New Mexico’s Educational Retirement Board wants to raise the retirement ages of its teachers, as well as raise taxpayer contributions to patch up a pension deficit. Meanwhile, the large state and municipal workers’ fund is hustling to find its own bailout blueprint.

The educators’ plan would make teachers retire at 58 (up from 55) to get full benefits and hike the healthcare payments by 50%. The education pension board noted that it would help fully fund the plan in 30 years.

The $12.9 billion education pension plan is currently $7.5 billion in the hole.

Another proposal calls for employer contributions to rise an extra percentage point per year for three years.

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Teachers that work fewer than 10 years would also receive smaller benefits.

Current members kick in 10.7% of their salaries into the fund, and another 13.9% comes from the state. Beneficiaries were previously eligible to collect after 25 years of service, but hires after July 2010 aren’t eligible until they’ve racked up 30.

Meanwhile, the state’s Public Employee Retirement System (PERA), a $15.3 billion fund, is dealing with a $6 billion liability problem of its own. It is instead debating making changes to cost-of-living adjustments.

PERA covers police, firefighters, and other state workers. They pay about 8.92% of their earnings into the pension fund, while taxpayer-funded state contributions are nearly 17%. PERA employees could retire after 25 years of service, regardless of age, but eligibility guidelines have now tightened, reports the Albuquerque Journal.

The PERA fund was caught off guard by the education board’s Monday proposal, and did not have suggestions of its own to present to a legislative group. It has scheduled a December meeting on the topic.

Separately, the Educational Retirement Board will ask for a one-time appropriation of $248.3 million to level out funding issues created by budget-balancing measures between 2009 and 2011 that stalled scheduled tax hikes.

The suggested changes come as credit ratings agencies have lowered the state’s bond rating. Other recent pension provisions New Mexico created include increases to employee- and taxpayer-funded contributions, and enforcement of stricter retirement guidelines for future hires.

Both retirement funds have lowered their annual investment rate of return.

The proposals would only affect new teachers and would need approval of the full legislature and Gov.-elect Michelle Lujan Grisham, who will start in January. During her campaign, Grisham was against any benefit reductions.

 Overall, the New Mexico plan is 65% funded.

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As G20 Summit Starts, International Poll Shows Low Confidence Levels Among Populations

Departing Merkel has highest confidence rating, with other major leaders lagging behind badly.

Ahead of Friday’s G20 Summit, a poll finds that their citizens are not optimistic about their future, and even less confident in their world leaders.

According to a survey of G20 countries and others from Pew Charitable Trusts, advanced countries such as Germany, Sweden, and the Netherlands are pleased with their current economies, but are not expecting younger generations to feel the same. For example, while the Netherlands is 85% satisfied with its current conditions, only 35% of respondents think it will be better for their children financially.

Americans are mostly content (65%), but only 33% are expecting it to be easier for their kids. The G20 gathering brings together top officials from the world’s largest economies.

In the poll, there also plenty of people dissatisfied with their nations’ economies as well, such as G20 host Argentina, which only has a 17% approval rating. Mauricio Macri, the nation’s president, had to get help from the International Monetary Fund and impose austerity measures in September due to an unexpected recession.

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Another nation with a dissatisfied public is Brazil, which just elected a new president, Jair Bolsonaro, to improve its ailing economy and fight corruption. Just 9% of Brazilians are satisfied with the country’s condition, and only 42% are hopeful for a brighter future.

Long-suffering Greece is the most grim, as just 4% are content with the economy, and a mere 18% think their younger generation will have it better.

On average, the 27 countries that participated are 36% satisfied with their economies globally, and just 37.8% are hopeful things will get better.

Major world leaders scored badly as a rule in the international survey. Only Germany’s Angela Merkel, who recently announced she was stepping down as chancellor when her term expires in 2021, was the only of five world leaders evaluated to have a positive reading, at 52%. The other four, Donald Trump, France’s Emanuel Macron, China’s Xi Jinping, and Russia’s Vladimir Putin, could not rally a majority support from the multi-country populations polled.

Trump, who is scheduled to meet with Xi and Putin (although it is being reported that he may cancel his appointment with Russia’s head), scored the lowest rating, with just 27% of respondents in the 25 countries polled for this area expecting him to “do the right thing regarding world affairs.”

Putin, Xi, and Macron did not fare much better, garnering confidence levels of 30%, 34%, and 46%, respectively.

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