nmerb

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Today, the New Mexico Educational Retirement Board is a robust organization of 63,698 active members, 31,192 retirees and an $8.5 billion portfolio to manage. This association, known as the ERB, manages one of the highest-ranking public pension plans in the country in terms of return on investment. Active members range from bus contractors and drivers to university professors. About 1,720 educators retire every year and the benefit payroll to retirees averages $48.7 million a month (July, 2008). The New Mexico Legislature provides the employer’s portion of the monthly contributions (currently 11.65% per annum, rising to 13.9% in 2012) to a member’s account. The ERB is a state agency, accountable not only to its members and its board, but also to the Legislature and governor. It is self-funded, meaning that the operating budget for the association is provided from the return on investment of the fund. The ERB uses no money from the state’s general fund. Board members and agency personnel pride themselves on a conservative and careful approach to investing, and in-house procedures provide economy. Board members and ERB personnel who have built the organization take great pride in ERB’s sound actuarial management, its efficient operations and its member-oriented focus. Retirement in New Mexico hasn’t always been funded or structured as it is today. What we take for granted now didn’t exist in the early 1920s - in fact, no pension plan whatever existed for any public servant. The first serious efforts to create a pension plan for New Mexican educators took place in 1925 when Gov. Arthur Hannett and the Legislature passed landmark legislation establishing the first pension plan of any kind for public servants. On March 19, House Bill 178, An Act Relating to the Retirement of Faculty Members in State Educational Institutions, and Providing for the Payment of Annuities Thereto, was passed marking the beginning of an 81-year history that has formed the present New Mexico educational retirement system. An informal beginning, to say the least John Hall, a legislator during the 1925 landmark session, provides revealing insights on the ways the Legislature was governed then: “The committees of both houses were powerful and at times highly arbitrary in their conduct. No calendars were kept, committees met at the call of the chair and no minutes of the proceedings were preserved. Furthermore, there is nothing in the state Constitution or in the rules of either house to compel a committee to consider or report a bill ... “All members of both houses either spoke or understood English. However, interpreters were available in the lower house, the House of Representatives, when a member of Spanish descent insisted that his argument could be better made in his mother tongue. Copies of the bills were printed in English and Spanish.” Despite these irregularities, the 1925 retirement act was ground-breaking legislation. House Bill 178, the state’s first pension plan for public servants, was created in a small state of 400,000, geographically remote from the centers of policy making at that time – a remarkable accomplishment.

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