On June 24, 2013 four ERB retirees filed a petition asking the NM Supreme Court
for a Writ of Mandamus to STAY implementation of the SB 115 cost of living
modification as approved by the State Legislature and signed by the Governor.
In effect the petitioners are challenging the constitutionality of the COLA reduction
that was enacted as part of SB 115.
To read the entire petition, click here.
On July 2, 2013 the NM Supreme Court ordered the ERB to file a response by July 17, 2013.
Here is a summary of that response:
“In their response, the ERB trustees argued that mandamus was not appropriate
because Article XX, Section 22 of the New Mexico Constitution does not
unambiguously prohibit changes to the retirement plan, including the COLA.
Rather, the Constitution grants a limited or qualified vested property right to
members of that system while also stating that nothing in Section 22 shall be
construed to prohibit modifications to retirement plans that enhance or preserve
their actuarial soundness. The COLA modification was made for the purpose of
enhancing, and therefore protecting the actuarial soundness of the fund. Balancing
the interest of the State, and the members themselves, in maintaining the Fund’s
actuarial soundness against the Petitioners’ property rights weighs in favor of the
constitutionality of the COLA modification. The Response also argued that
fundamentally, the Petitioners were asking the Supreme Court to substitute its
judgment for that of the Legislature in formulating public policy, a role that is
properly left to the Legislature.” ERB Legal Counsel, Chris Schatzman, August 9,
2013, Investments and Pension Oversight Committee, NM State Legislature.
To read the entire response, click here.
CHALLENGE TO THE CONSTITUTIONALITY OF THE ERB COLA
On September 4, 2013, the NM State Supreme Court heard Oral arguments in the
Petitioner’s Writ of Mandamus to STAY implementation of the new COLA
modification on current retirees.
Both sides presented their arguments before the court:
1) The Petitioners argued that the Constitution protects their pension from
reductions as approved in SB115.
2) The NM Assistant Attorney General argued that the State Constitution
provides a provision that allows pensions to be modified in order to
address the solvency of the retirement plan.
After Oral arguments were heard the NM Supreme Court adjourned for deliberations. However, after a brief period of time the Court Room was informed that the NM Supreme Court would take the
issue under advisement.
On September 10, the NM Supreme Court issued an order directing the
Petitioners and ERB to file supplemental briefs on six questions.
Click here to read the Order for these questions.
Briefs are due to the NM Supreme Court on September, 24, 2013
We will continue to keep you informed!