Pension obligations weigh on schools, local governments in New Mexico

Pension burdens are weighing on the financial health of local governments and school districts across New Mexico as contributions to the state’s two major public retirement funds lag behind pension obligations, analysts for a major credit ratings agency told a panel of legislators Thursday.

Moody’s analysts previously warned that pension reforms this year did not increase contributions sufficiently to reduce the problem of unfunded pension liabilities. On Thursday, they explained to legislators that pension problems are affecting financial burdens and risks for local governments and school districts.

“No one is left untouched in this conversation,” Moody’s analyst Heather Correia said. “Local government credit ratings have gone down because of this pension burden, the state’s rating has gone down. … Cities, counties, school districts — it doesn’t matter.”

New Mexico lawmakers this year increased taxpayer contributions to two major pension plans by 0.25 percent of annual salaries and delayed the accrual of pension benefits for new school workers overseen by the Educational Retirement Board.

Read more: https://www.santafenewmexican.com/news/local_news/pension-obligations-weigh-on-schools-local-governments-in-new-mexico/article_7b06e199-bd2b-570d-b1d6-b1249c4865b6.html