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County seeks delay in rule change affecting retirees

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Commissioners also vote on rural addressing, other items

Chaves County commissioners want the New Mexico Governor’s Office and the state Legislature to delay a rule change affecting how much health insurance will be paid by the state after public employees retire.

The New Mexico Retiree Healthcare Association enacted a new rule last year that the county thinks could prompt a lot of retirements before it takes effect July 1.

The new rule makes two major changes. First, it will require most retirees of public agencies in the state to be at least 55 years old to receive the state subsidy for their health coverage. Second, they will not be able to receive the maximum subsidy until they worked 25 years.

Law enforcement, corrections officers, firefighters and some judges are not affected by the new rule because they pay more into the retirement system and their retirements are covered by different regulations.

During the Chaves County Board of Commissioners’ Thursday meeting, the five elected officials unanimously passed the resolution seeking a delay in the implementation of the rule.

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Commissioners and county staff read from Resolution R-20-010 and agenda documents, but they did not discuss the issue before their vote.

The resolution asks the Governor’s Office and Legislature to delay the rule change “to allow additional consideration from all state governmental employers.”

The rule change was approved June 2, 2020, but its implementation already has been delayed seven months from Jan. 1 to July 1 after officials with many school districts in the state indicated that the change could lead to a lot of teacher retirements in the middle of the academic year.

A January 2019 New Mexico Legislative Finance Committee report indicates that changes are needed because the Retiree Healthcare Association has $5.1 billion in liabilities and only $630 million in assets. If changes are not made, according to the report, the association was expected to pay more out in benefits each than it took in from employee contributions by 2020. The committee also projected that it would be insolvent by 2035.

“For the pension systems to remain sustainable, employees must have an inducement to work longer careers, thus giving invested funds longer to grow,” the report states.

Currently most employees who are part of the Public Employees Retirement Association of New Mexico or the New Mexico Employee Retirement Board can start receiving health insurance subsidies after five years of service, not matter their age. They become eligible for the maximum subsidy after 20 years of service. That maximum coverage is 64% for employees if they are not yet eligible for Medicare because they are younger than 65, and 36% for their spouses or eligible domestic partners. For retirees eligible for Medicare, the maximum coverage is 50% for them and 25% for their spouses and domestic partners.

At the current time, retirees without the subsidy pay $636 a month for health insurance. With the full 64% subsidy, retirees pay $229 a month.

The new rule scheduled to take effect in July requires people to be 55 years old to receive the subsidy. If they are not 55, they will have to pay the full amount for health coverage until they reach 55 and the subsidy takes effect.

The other part of the rule change calculates the subsidy based on 25 years instead of 20 years. That means employees will receive less of a subsidy after five years — only 4.76% instead of the current 6.25% — and would accrue a smaller subsidy addition each year than under the current system until they have worked at least 25 years.

County commissioners also voted unanimously to approve 10 other agenda items, including the sale of a downtown property covered in a different article (see related article: County approves sale of downtown office space) and the following resolutions and agreements.

• With no public comments for or against a plan to adopt a new rural addressing system for unincorporated areas of the county, commissioners approved the new ordinance to replace the existing one. The new system is intended to make it easier for first responders, county employees and mail and package deliverers to find residences and businesses. The addressing and street naming system is meant to apply only to new addresses.

• The Fiscal Year 2020 audit of county financial statements and budgets conducted by Jaramillo Accounting Group were approved.

• Bill Williams was officially named county manager. He had been serving on an interim basis since December. The former county manager, Stan Riggs, retired at the end of December and still serves as county attorney.

• Three people were appointed as freeholders to make recommendations to the Board of Commissioners concerning 14 county road change requests received for 2021. Jana Lessard of Roswell, Cody Rattan of Roswell and Wesley Pilley of Hagerman will be the freeholders. Cliff Waide of Hagerman will serve as the alternate.

Senior Writer Lisa Dunlap can be reached at 575-622-7710, ext. 351, or at reporter02@rdrnews.com.

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Lisa Dunlap is a general assignment reporter for the Roswell Daily Record.