Committee sends temporary 2% COLA for some retirees to finance after hearing heavy testimony

A Senate committee on Friday voted to send Senate Bill 30, a temporary 2% cost‑of‑living adjustment (COLA) for certain retirees, to the Finance Committee after approving an amendment that limits the increase to five years and ties it to a $10 million recurring appropriation.

Sponsor Senator (recorded as) Stefanik explained the measure would restore a 2% COLA for retired state employees age 65 and older and provide a pathway for local governments to opt in if they allocate funding. She said the $10 million appropriation would maintain the compounding COLA for five years for the state cohort.

Retiree advocates told the committee that the 2020 pension reform, which removed automatic COLAs, left many retirees with sharply reduced buying power. “Retirees are not asking for a handout. They're asking to be paid what the law said they earned,” said Anne Green Romig, a state retiree who testified in favor. Multiple retirees described falling purchasing power and returning to work to make ends meet.

PERA Executive Director Greg Trujillo described the underlying funding challenge. He said the PERA plan has roughly $18 billion in assets and about $26.7 billion in promised benefits, leaving an unfunded liability on the order of $8.7 billion. Trujillo told senators that restoring a permanent 2% COLA would be costly and that the appropriation in the bill is smaller than estimates PERA typically produces when it projects long‑term costs; at one point he and committee members cited actuarial worksheet figures indicating a $33 million annual appropriation would be needed to fund an ongoing 2% COLA for the state plan over a 25‑year horizon, with municipalities adding roughly $38 million more if they were included.

Local governments and their association urged caution. AJ Forte of the New Mexico Municipal League said local budgets are lean and that cities and counties already stepped up during the earlier 2020 pension reform; the municipal group warned that if local governments opt into a COLA without dedicated state funding they could face service cuts. PERA and municipal witnesses emphasized the proposal’s impact on the fund’s long‑term solvency as the state’s retiree population grows and life expectancy increases.

Committee members expressed divided views. Some senators said they sympathize with retirees but want actuarial certainty and a long‑term funding plan before a permanent change. Others argued the temporary, five‑year approach creates breathing room for retirees while the state pursues broader solutions such as funding increases or reforms. After debate, the committee approved the sunset amendment and voted to send the bill to the Finance Committee.

Action at a glance: Committee approved an amendment making the COLA temporary (five years) and moved the bill to Finance with a do‑pass recommendation. The committee noted actuarial estimates (state annual cost over 25 years ~ $33 million; municipal portion ~ $38 million) and asked Finance for a detailed funding review.

The bill will be considered in Finance, where lawmakers are expected to examine actuarial projections, constitutional funding requirements and the impact on municipal budgets before the measure reaches the full Senate.