PERA: funded ratio 67.2%, $8.7 billion unfunded liability; trustees urge caution on benefit changes
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Summary
PERA executives briefed the committee on pension finances, reporting a funded ratio of 67.2%, an $8.7 billion unfunded liability and urging lawmakers to avoid unfunded benefit increases while contribution phase-ins continue.
Public Employees Retirement Association (PERA) officials told the committee that the pension fund’s funded ratio stood at 67.2% at the end of fiscal 2024, with an unfunded liability of about $8.7 billion and a multi-decade amortization period.
Greg Trujillo, PERA executive director, told senators the fund held roughly $17.8 billion in assets against $26.5 billion in promised benefits. “The shortfall or what we call our unfunded liability is currently at $8,700,000,000,” Trujillo said. He summarized past benefit and funding changes and described the phased-in employer and employee contribution increases enacted in recent pension reforms.
Trujillo and AJ Forte, municipal director for the New Mexico Municipal League and member of the governor’s PERA task force, urged caution about proposals that would increase ongoing benefit costs without full funding. Forte said the task force’s message to lawmakers was straightforward: “Let’s not dig the hole deeper.” He argued benefit changes should be fully funded and equitable across state and local government members.
PERA staff provided historical context: prior reforms (2013 and 2020) raised contribution rates, changed cost-of-living adjustment (COLA) design, and created a new tier for employees hired after July 1, 2013. Trujillo said the contribution increases still have two years to phase in fully for municipalities, and staff projected recurring fiscal improvements as the phased increases complete.
Officials also described demographic pressures: the active membership’s average age is 43 and the average service is eight years, while the average retiree is 69 and has been retired 13 years. PERA staff warned that, as the system matures, benefit payments will increasingly outpace contributions without reforms already adopted.
Nut graf: PERA’s presentation gave committee members numerical context for the pension debate: current funded status has improved since earlier lows but still leaves a multi-billion-dollar shortfall. PERA leaders asked legislators to avoid passing unfunded benefit increases and highlighted options that provide one-time relief without compounding long-term liabilities.
Committee members asked questions about investment performance, return-to-work programs and short-term relief options. Trujillo and AJ Forte said some one-time relief proposals (for example, a non-compounding “thirteenth check”) can provide targeted help without adding to long-term liabilities, while compounding COLA restores would add materially to PERA’s unfunded liability.
Ending: PERA officials said they will continue to provide actuarial updates, implementation schedules for contribution phase-ins, and a timetable for future task-force work. Committee members were urged to consult PERA staff and the pension oversight interim committee before approving any benefit increases.
