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Union proposes alterations to government pension program in New Mexico

07/28/11

In New Mexico, a state workers' union recently proposed changes to a government pension program. The changes could require some employees to put off retirement longer before being eligible for pensions.

Some of the changes proposed by Carter Bundy of the American Federation of State, County and Municipal Employees include changing the retirement age for future state workers, altering the average salary calculation that plays a role in determining an individual's pension benefits and cutting the cost-of-living payments for retirees.

"This is not an easy thing for a union to come up here and talk about," Bundy said when addressing the state Investment and Pensions Oversight Committee. "But we want to make sure that these plans are there for the long haul and that these are solvent for the foreseeable future - 75, 100 years, as long as you can reasonably plan these things out."

Under the proposed plan, the pensions of current workers wouldn't be affected. Future state employees would be able to retire without benefit reductions once their age and service years combined to equal at least 85. Other proposed changes include linking cost-of-living increases to an index reflecting inflation, like the consumer Price Index.

Those looking for ways to save for retirement might want to look into annuities, which normally offer competitive interest rates and accumulate tax-deferred interest until a person decides to start receiving payments.

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