Public Workforce

Big Dippers

If you want to retire from a public job with a sweet pension, New Mexico may be the place to apply.
by | April 2006

While California tries to live down its reputation for overly generous workers' comp payments, New Mexico is struggling with a slightly different form of management extravagance: the extra-juicy pensions it allows some public employees.

Unlike California's problem, New Mexico's is of comparatively recent origin. Three years ago, the state legislature removed a $15,000 cap on the amount state and local government workers could receive in annual salary while drawing a pension from the Public Employees Retirement Association. Proponents of the plan saw it as a way of coaxing longer service from valuable civil servants, and about 1,300 workers have signed up. But to many on the outside, it looks like little more than a dubious sanction for double-dipping.

The Albuquerque Journal recently profiled one public worker, the head of a water conservancy district, who had been earning a $152,000 salary. Once the retirement income cap was dropped, he "retired" for a requisite three-month period. He cashed out $230,000 in unused leave and then returned to his job at his old salary, earning $77,000 a year in retirement benefits on top of his previous paycheck.

Stories such as that one have led to controversy over the new system and to calls for reinstating the old $15,000 cap. Legislation to suspend pension payments for employees earning more than $15,000 has been introduced in both the House and Senate. It didn't gain traction in this year's legislative session, but seems destined to become a much more hotly debated topic next year.

Meanwhile, Albuquerque has changed the rules on its own. A new city policy states that, in the future, pension recipients will be ineligible for most municipal jobs. The city ordinance allows for a host of exceptions, including ones for police and security officers, fire fighters, emergency medical technicians and emergency dispatch operators. Still, Mayor Martin Chavez says the policy, which went into effect in late February, returns the public employee pension program to its original intent.

While Albuquerque's decision may seem harsh, it's hard to argue against it. Yes, the state has an interest in making sure governments can fill needed positions, even if that means opening them to retirees. But when the system is used to augment public employee incomes with what amounts to a bonus salary, the public is bound to demand change sooner or later.

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