NM SM31

Requests the Legislative Finance Committee create a nine-member work group to study the Public Employees Retirement Association (PERA) fund, examining solvency factors, causes of increasing unfunded liability, and impacts of cost-of-living adjustment (COLA) changes on retirees

Senate Bill 72 (2020) suspended COLAs for three years and changed the compounding methodology for approximately 30,000 retirees, shifting from inflation-based adjustments to a formula based on fund solvency and investment performance

PERA's unfunded liability grew by $3.1 billion over four years, with $600 million attributed to investment underperformance and $1.6 billion to higher-than-expected salary increases for active employees (averaging 47% since 2019 versus the 3.25% annual assumption)

Projected economic losses from reduced retiree spending power could reach $300 million since 2020 and exceed $1 billion by 2030, with more than $50 million in lost state income tax revenue

Work group recommendations due by December 31, 2026, with the group including three PERA retiree appointees, legislative committee chairs, PERA board leadership, and analysts from the Department of Finance and Administration and Legislative Finance Committee