NMERB Solvency Update

A message from
ERB Executive Director
Jan Goodwin

Lately you may have heard that various retirement funds are in jeopardy and that downturns in the stock market puts those funds at risk. The truth, however, is very different and you should be reassured that despite a turbulent economy, your retirement continues to be secure.

Funding pension plans is a long-term process. Continuing retirement payments are assured by money earned from investing the funds and contributions paid by all members and their employers. At the beginning of a pension system, contributions from members and employers are collected and invested, and grow as time passes. However, older members who are covered when the pension system is created will retire long before their contributions plus interest are sufficient to pay for their retirement. Even today, almost 50 years after the ERA was established members will receive everything they have paid into the fund in contributions back in benefits during their first three years of retirement. The ERA is an inter-generational system and it is important that our members and legislators who advocate on our behalf keep this in mind.

It is the New Mexico Educational Retirement Board’s responsibility to be ever vigilant, proactively addressing market and economic trends, contribution levels, or other issues that may impact the fund in the future. As with any financial organization, we face important challenges as we ensure the long-term stability of the fund. We want to assure you that your retirement is secure and that the fund will continue to provide retirement benefits for all of our members for many, many years to come.

If you should have any questions or concerns, please do not hesitate to contact Jeff Riggs, Deputy Director at (505) 827-8030.

Summer Retirement Seminars in Albuquerque

Spaces are still available for the last two ERB special summer seminars. Preregistration is required for all seminars. Maximum participants – 25. Minimum – 10. Seminars go from 9.00 am to noon.

Exercises from Ready or Not: Your Retirement Planning Guide (July 14)
In this session participants will engage in interactive activities from 2 of the chapters from the book. There will NOT be a specific discussion of NMERB benefits.
NMERB Albuquerque office at 6201 Uptown Blvd. NE Suite 204

Financial Planning for Retirement (July 21)
In this session, participants will receive specific information about their personal ERB pension benefits. In the second part Joe Dooley and John Habe, Financial Consultants with NMEFCU, will discuss how to prepare for the financial realities of retirement.
New Mexico Educators Federal Credit Union training center at 3434 Pan American NE

SPOTLIGHT: Meet ERB Staff

Six Months & Counting

Ask Connie Sanchez what gets her excited these days and there is a quick and resounding answer: retirement! After 24 years with NMERB, she’s counting the days until December when she will be free to fish the Pecos River for rainbow trout with her husband any time she wants to; free to pack a picnic lunch and hike the mountains; free to lounge about with a book. She clearly plans to savor every moment.

And there are eight children between her and her husband, and 17 grandchildren to help her while away the pleasant hours.

NMERB Benefits Analyst Connie Sanchez, Santa Fe office.

“We always have something to attend—ball games or dance and piano recitals with so many grandchildren around.” She also wants to take cooking classes at a local cooking school, volunteer at the hospital or a crisis center—and whatever else grabs her fancy. That of course is the appeal of the new life that awaits her.

Not that she doesn’t enjoy working. She must---she’s spent the last 21 years in the same job working as a benefits analyst for NMERB. She says she still is learning. “You can be here forever and something new will pop up. You add something new to your position daily.”

Counseling members who have become disabled is also part of Connie’s job. “When you work with disabled members you do have to have patience and understanding. Disabled people are ill and often on a lot of medications. And so you take them by the hand and help them get through it.”

Taxes & Retirement –True or False?

True or False?	Answer
Income taxes go away when you’re retired.	False: Remember all that pretax money you contributed to your retirement plan? When you withdraw it at retirement, you pay income taxes.
Social Security benefits are not sheltered from taxes.	True. A portion of your Social Security benefits is included in your taxable income if, for example, in 2006 you have taxable income and Social Security benefits of more than $25,000 for a single person, and $32,000 for a couple.
There are no tax consequences if you don’t start to withdraw your pretax savings at age 70 ½.	False. There is a 50 percent tax penalty on amounts that the IRS requires to be taken out after age 70 ½ and that are not withdrawn when required. In tax terms, these are called “minimum required distributions.”

Taking the Mystery Out of Retirement

Less Than Half of Boomers Have Calculated Retirement Needs

Did you know that a recent survey by the U. S. Department of Labor indicates that less than half of the Baby Boom generation have calculated how much they will need to save for retirement?

Let’s face it – your retirement is not going to be your parents’ retirement - no gold watch at 65 or health insurance for life, or even guaranteed pensions for some. For many Americans, retiring in this new century is a mystery. Earlier generations of workers could rely on employer-provided pensions, but now many workers will need to rely on their own work-related and personal savings plus Social Security benefits.

While public educators in New Mexico can safely count on their NMERB guaranteed annual pension based on years of service earned, the odds are good that most if not all NMERB retirees will need to supplement their government pensions (ERB + Social Security pensions) with additional sources of income in order to live comfortably in retirement.

“51 percent of people who tried to figure out their financial futures ended up changing their retirement savings plan.”

Don’t wait another day to get started on your plan. The U.S. Dept. of Labor offers “Taking the Mystery Out of Retirement Planning,” a nifty, easy-to-understand guide online at (www.dol.gov/ebsa) to get you going. Simple worksheets in each chapter will help you figure what your monthly expenses in 10 years might be, new savings between now and retirement and making your money last so you have the time and money to do what you’ve always wanted. It is critical to make the right choices years ahead. Start on the path to retirement security today.

For members without Internet access, you may talk with a benefits advisor at the U.S. Department of Labor Employment Benefits Security Administration at 1-866-444-3272. It’s a toll free call.

(This article includes excerpted material from “Taking the Mystery Out of Retirement Planning,” U.S. Department of Labor, Sept. 2006.)

To learn more about NMERB go to our web site

www.nmerb.org

You can also find our printed newsletters online by clicking here

New Mexico Educational Retirement Board (NMERB)
Managing the Retirement Assets of New Mexico's Educators
Santa Fe 505.827.8030
Albuquerque 505. 888.1560
Las Cruces 575.647.3313