Although New Mexico legislators are the only state legislators in the country not to receive a salary (they do receive a per diem living expense during sessions and interim activities), if they serve at least 10 years, they receive a golden-parachute retirement.
This year, the legislators voted themselves an increase to an already extremely generous plan. The golden parachute is now made of platinum.
The primary statutes controlling legislators’ retirement pay are contained in NMSA 10-11-43.1 to NMSA 10-11-43.5. For a legislator who has served at least 10 years, his or her pension is computed by multiplying the IRS per diem for Santa Fe times 14 percent (increased this year from 11 percent) times 60 years of service.
After leaving, the former legislator may immediately begin receiving his pension — regardless of age. It is common for former legislators in their 30s and 40s to begin receiving payments.
New Mexico is the only state in the country that has a legislator pension plan with no minimum age limit to begin receiving payments.
Here’s a hypothetical to show how generous the 10-year plan is. If you have high blood pressure, you may want to take your medication.
Male legislator begins service in 2009 and retires at the end of 2022 after 14 years. He will be 46 years old when he retires and has a life expectancy of 29.74 more years.
The IRS per diem for Santa Fe is $202. Legislator starts receiving his pension in 2023. We multiply $202 times 14 percent for $28.28. We next multiply $28.28 by 60 for $1,696.80.
We next multiply $1,696.80 by the 14 years of service for an annual payment of $23,755.20. If we then multiply that number by a life expectancy of 29.74, we have a total of $706,479.65. Not too shabby.
But wait. Notice there is a cost-of-living provision in the statute. Using a spreadsheet with a first-year payment of $23,755.20 and an annual cost-of-living increase of 3 percent, after 29.74 years, retiree will have received an astonishing $1.1 million!
And how much did the legislator have to contribute to qualify for this regal retirement? He contributed $500 per year for 2009 through 2011 ($1,500), plus $600 per year from 2012 through 2018 ($4,200) and $1,000 per year from 2019 through 2022 ($4,000). So, for $9,700, he may receive over $ 1 million.
King Midas would be jealous.
Please keep a copy of this article for future reference. Whenever you hear anyone bemoaning the fact that our legislators do not receive a salary, remind that person of their extraordinary retirement plan.
Also ask the person: “If our legislators start receiving a salary, will they be giving up their retirement plan?”