HomeMy WebLinkAboutPublic Employees Retirement Association of New Mexico - Public Financial ReportEXECUTIVE DIRECTOR |page 2
FINANCIAL SUMMARY |page 3
Fiduciary Net Position
Changes in Fiduciary Net Position
DEFERRED COMPENSATION |page 4
Member Information
Fiduciary Net Position
Changes in Fiduciary Net Position
MEMBERSHIP SUMMARY |page 5
Member Composition by Status
Active Member Averages
Retired Member Averages
Economic Force in New Mexico
PAYMENTS BY COUNTY |page 6
PERA's Economic Forces
INVESTMENT SUMMARY |page 7
Asset Allocation
Portfolio Returns and Benchmarks
Investment Income
ACTUARIAL VALUATION |page 8
Funding Status of PERA's Division and Plans
PERA's Components of Net Pension Liability
TABLE OF CONTENTS
1 New Mexico PERA Popular Annual Financial Report 2021
PoPular annual Financial rePort
Fiscal year ended June 30, 2021
Public Employees Retirement Association
MESSAGE FROM THE PERA BOARD CHAIR AND THE EXECUTIVE DIRECTOR
We are pleased to present the Public Employees Retirement Association of New
Mexico (PERA) Popular Annual Financial Report (PAFR) for the year ended June
30, 2021.
The information provided in this PAFR is a read-friendly summary of the detailed information contained in PERA’s fiscal year (FY) 21 Annual
Comprehensive Financial Report (ACFR). Unlike PERA's ACFR, the PAFR is not presented in a manner which follows generally accepted accounting
principles (GAAP). PERA’s ACFR is available at www.nmpera.org. and is produced to conform with GAAP.
For the fourth consecutive year PERA's PAFR received an Award for
Outstanding Achievement in Popular Annual Financial Reporting for its PAFR for fiscal year ended June 30, 2020. The Award for Outstanding Achievement
in Popular Annual Financial Reporting is a prestigious national award recognizing conformance with the highest standards for preparation of state
and local government popular reports. We believe our current report continues to conform to the PAFR requirements, and we are submitting it to the
Government Finance Officers Association for FY 21.
The COVID-19 pandemic continued to cause economic disruptions during the fiscal year. However, the economy began coming back to life in the last six
months of the FY 2021. The recovery was supported by fiscal and monetary policies at the federal level. As such, during FY 21 PERA’s defined benefit
fund generated a time-weighted return of 24.02%, net of fees lagged. This healthy return in investments was well above the actuarial return target of
7.25%. This healthy return rate resulted in net investment income of $3.8 billion for fund during the fiscal year.
PERA continues to work on long-term sustainability of all plans and in 2020
Senate Bill 72 went into law. This legislation will increase PERA contributions for state general plans for both employee and employers by .5% each year for
the next four years and the same for municipal plans but the change in contributions rate will start in FY22. The bill also made changes to the COLA
structure for retirees who are 75 years of age on before June 30, 2020 and disability retirees and retirees with a pension lower than $25,000 after years of
services will receive a 2.5% COLA increase. For all other retirees who are COLA-eligible, they will receive a 2% non-compounding additional payment
for 2020, 2021 and 2022. After, the three-year period, future COLAs for more retirees will be based on the Fund's investment returns and funded ratio.
PERA will continue to monitor the process of Senate Bill 72 and its impact on our funding status which was 71.4% at fiscal year end 2021.
PERA continues to preserve, protect and administer the Trust to meet its
current and future obligations, well offering one of the best retirement benefits in the county.
Sincerely,
Francis Page
Acting Board Chair
Greg Trujillo
Executive Director
2 New Mexico PERA Popular Annual Financial Report 2021
SUMMARY COMPARATIVE COMBINED STATEMENT OF FIDUCIARY NET POSITION
Includes all PERA defined benefit funds - PERA, Judicial, Magistrate, and Volunteer Firefighters' Fund.
The Comparative Combined Statement of Fiduciary Net Position is a summary of the net assets available to pay future
benefit payments and gives a snapshot at a particular point in time.
As of
June 30, 2021
As of
June 30, 2020
Total Assets 19,650,486,733 16,555,222,670
Total Liabilities (1,615,428,785) (1,680,460,312)
Fiduciary Net Position $ 18,035,057,948 $ 14,874,762,358
SUMMARY COMPARATIVE COMBINED STATEMENT OF CHANGES IN FIDUCIARY NET
POSITION
Includes all PERA defined benefit funds - PERA, Judicial, Magistrate, and Volunteer Firefighters' Fund.
As of June 30, 2021 As of June 30, 2020
Additions
Employer Contributions 384,759,027 373,500,537
Member Contributions 301,062,522 292,210,246
Service Credit Purchased 10,979,261 7,376,041
Net Investment Income 3,846,054,843 (226,291,042)
Appropriations from State of New Mexico 3,150,000 56,650,000
Other Income 1,990,814 1,645,633
Total Additions $ 4,547,996,467 $ 505,091,415
Deductions
Benefit Payments 1,334,409,598 1,273,861,323
Refunds to Terminated Employees 40,404,954 44,910,862
Administrative Expenses 12,886,325 14,495,787
Total Deductions $ 1,387,700,877 $ 1,333,267,972
Change in Fiduciary Net Position $ 3,160,295,590 $ (828,176,557)
Fiduciary Net Position - Beginning of Year 14,874,762,358 15,702,938,915
Fiduciary Net Position - End of Year $ 18,035,057,948 $ 14,874,762,358
FINANCIAL SUMMARY
3 New Mexico PERA Popular Annual Financial Report 2021
PERA’s SmartSave Plan: A Personal Retirement Savings Option for PERA
Members
PERA offers its members a voluntary, supplemental 457b retirement savings vehicle called the PERA SmartSave
Deferred Compensation Plan. This plan is intended to compliment the mandated PERA defined benefit plan. There are
approximately 60,000 employees who are eligible to participate in the Plan from state and local government employers,
as well as public school employers.
There are approximately 23,015 participants in the SmartSave plan; 14,473 are actively contributing to the Plan and
account for approximately $42.9 million in contributions in FY21.
Summary Comparative Combined Statement of Changes
in Fiduciary Net Position for Deferred Compensation
The Comparative Combined Statement of Changes in
Fiduciary Net Position for the deferred compensation plan
shows the inflows and outflows during the year.
Summary Comparative Combined Statement of
Fiduciary Net Position for Deferred Compensation
As of June
30, 2021
As of June
30, 2020 The Comparative Combined Statement of Fiduciary Net
Position for the deferred compensation plan shows the net
assets available at a particular point in time. Additions:
Contributions $ 42,905,382 $ 41,704,672 Net Investment
Income of Fair Value
of Investment Other
Income 164,046,966 24,310,886 Assets:
As of June
30, 2021
As of June
30, 2020
Other Income 105,000 108,136 Receivable $ 11,319,340 $ 12,360,117
Total Additions 207,057,348 66,123,694 Investment Income 800,939,084 649,734,530
Deductions Total Assets 812,258,424 662,094,647
Benefit Payments 55,088,749 47,481,217
Life Insurance Premiums 12,678 17,740 Total Liabilities 11,698 12,695
Administrative Expense 1,791,147 1,558,231 Net Position held in Trust $ 812,246,726 $ 662,081,952
Total Deductions 56,892,574 49,057,188
Change in Net
Position $ 150,164,774 $ 17,066,506
Your Voluntary 457(b) retirement plan
is offered through New Mexico Public
Employees Retirement Association
(PERA), and contributions are taken
from your paycheck on a before-tax or
after-tax (Roth) basis*
Access PERA SmartSave at
PERASmartSave.voya.com
DEFERRED COMPENSATION
4 New Mexico PERA Popular Annual Financial Report 2021
About Your Retirement Plan
PERA is a cost-sharing, multiple employer defined benefit pension plan. PERA provides retirement benefits for state employees,
municipal and county employees, fire and police, legislators, judges, magistrates and volunteer firefighters and offers 31 different
types of coverages within the PERA Plan. We serve more than 125,000 members and about 335 employers and 363 volunteer fire
departments.
A Snapshot of the PERA Members
2021 State General
State Police/ Correction
Municip-al General Municipal Police Municipal Fire Judicial Magis-trate VFF Legis-lative TOTAL
Active 18,672 2,277 20,592 3,724 2,414 128 64 7,830 114 55,815
Inactive 10,319 714 12,385 966 416 29 18 315 22 25,184
Retirees 20,374 1,625 14,801 3,864 2,079 202 111 1,590 204 44,850
Total Membership 49,365 4,616 47,778 8,554 4,909 359 193 9,735 340 125,849
Active Members
Average Age 45.13 38.39 44.37 37.12 37.48 54.73 56.00 42.03 58.25 45.94
Average
Service 9.07 10.6 8.52 9.35 10.19 9.05 9.47 3.71 8.44 8.71
Average Salary $53,009 $51,314 $44,304 $61,603 $58,067 $134,109 $95,406 N/A N/A $66,959
All Retirees
Average Age 69.96 64.83 69.08 61.71 63.65 71.03 70.05 68.96 75.44 68.30
Average
Annual Benefit $29,604 $33,774 $27,335 $41,163 $43,704 $59,800 $37,028 $1,722 $10,798 $31,011
New Mexico PERA Membership
Active
Members,
55,815
Inactive
Members,
25,184
Retirees
and
Beneficiaries,
44,850
MEMBERSHIP
5 New Mexico PERA Popular Annual Financial Report 2021
PERA'S Economic Force in New Mexico
New Mexico PERA provides financial stability for thousands of New Mexico retirees and their communities. In FY21, PERA paid $1.33
billion in pension benefit and vast majority of those benefits helped the New Mexico economy.
County Benefit Payments
Bernalillo 393,980,000
Santa Fe 239,121,000
Sandoval 93,710,000
Dona Ana 82,521,000
Valencia 53,878,000
San Miguel 52,473,000
Rio Arriba 46,004,000
San Juan 39,423,000
Chaves 32,549,000
Eddy 20,105,000
Taos 17,877,000
Otero 17,194,000
Grant 17,037,000
Mckinley 16,763,000
Lea 16,419,000
Colfax 15,103,000
Cibola 13,140,000
Luna 11,650,000
Lincoln 11,292,000
Curry 9,981,000
Torrance 8,943,000
Socorro 8,746,000
Sierra 8,384,000
Quay 7,243,000
Los Alamos 5,759,000
Mora 5,233,000
Roosevelt 5,078,000
Guadalupe 4,303,000
Union 2,622,000
Hidalgo 2,128,000
Catron 1,753,000
De Baca 1,585,000
Harding 1,010,000
PERA paid
$1.2 billion to
New Mexico
Retirees in
2021
40,555
Total Recipients
reside in New
Mexico
PAYMENTS BY COUNTY
6 New Mexico PERA Popular Annual Financial Report 2021
Investment portfolio income is a significant source of revenue to PERA. The Investment Committee, a standing committee
of the Board, is responsible for assisting the Board in overseeing PERA’s investment program.
For the fiscal year end, June 30, 2021, the total defined benefit fund had a rate of return of 24.02% net of fees, lagged,
which provide PERA with net investment income of $3.8 billion for the fiscal year.
PERA manages the Fund in a manner that reflects its unique liabilities and funding sources, incorporates accepted
investment theory, and targets growth and returns appropriate to prudent levels of risk based on reliable empirical data.
PERA funds asset
allocation
Global
Equity 35.864%
Risk Reduction
& Mitigation
18.482%
Real
Assets 20.480%
Credit Oriented
Fixed Income
14.885%
Multi-Risk
Allocation
10.290%
Portfolio Returns and Benchmarks
24.02%
9.12%9.07%7.62%
24.17%
9.36%8.98%7.61%
Benchmark PERA Return
1-year 3-year 5-year 10-year
—%
10.00%
20.00%
30.00%
The PERA utilities a Reference Benchmark to measure the benefits
of a diversified and complex strategic asset allocation compared to a simple,
non-diversified, benchmark of passive beta.
Investment Income and Expenses
PERA Fund Judicial Fund
Magistrate
Fund VFF Fund Total
Investment Income $3,885,128,289 $21,984,031 $7,630,784 $18,359,011 $3,933,102,115
Investment Expenses (85,987,601)(482,282)(168,267)(409,122)(87,047,272)
Net Investment Income $3,799,140,688 $21,501,749 $7,462,517 $17,949,889 $3,846,054,843
Rate of Return (net of fees, lagged)
24.02%.
$3.8 billion
Investment
Income
(net of fees)
INVESTMENT INCOME
7 New Mexico PERA Popular Annual Financial Report 2021
Funding a retirement program is a long-term commitment and it is important to remember that all member benefits are not
payable and due at the same time. The basic funding objective of PERA is to establish and receive member contributions
that, expressed as a percentage of active member payroll, will remain relatively stable over time and when combined with
present assets and future investment earnings, will be sufficient to meet all future benefit obligations of PERA.
In order to measure progress towards this objective and to help the PERA Board assess the health of the system, PERA’s
actuaries perform an actuarial valuation each year. These valuations illustrate each Funds’ assets as a percentage of liabilities.
They also project whether the promised benefits exceed current assets resulting in an unfunded liability. Additional
information related to the amortization period for unfunded liabilities can be found in PERA's CAFR in the actuarial section.
The table below shows the funded status and the summarized results of the actuarial valuation for funding purposes as of
June 30, 2021, and June 30, 2020.
FUNDED STATUS of NEW MEXICO PERA DIVISIONS AND PLANS
For the Fiscal Year Ended June 30th
2021 2020 2021 2020
ALL PERA DIVISIONS COMBINED MUNICIPAL FIRE DIVISION
Actuarial Accrued Liability $23.0 billion $22.4 billion Actuarial Accrued Liability $1.8 billion $1.7 billion
Assets Held to Pay Those Liabilities $16.5 billion $15.7 billion Assets Held to Pay Those Liabilities $1.1 billion $1.0 billionUnfunded Actuarial Accrued Liability $6.5 billion $6.7 billion Unfunded Actuarial Accrued Liability $693 million $684 million
Funded Ratio 71.40%70.30%Funded Ratio 60.90%60.00%
STATE GENERAL DIVISION JUDICIAL FUND
Actuarial Accrued Liability $9.9 billion $9.7 billion Actuarial Accrued Liability $176.5 million $170.8 million
Assets Held to Pay Those Liabilities $6.0 billion $5.8 billion Assets Held to Pay Those Liabilities $94.0 million $91.3 million
Unfunded Actuarial Accrued Liability $3.9 billion $3.9 billion Unfunded Actuarial Accrued Liability $82.5 million $79.5 million
Funded Ratio 60.60%59.90%Funded Ratio 53.30%53.50%
STATE POLICE/CORRECTIONS DIVISION MAGISTRATE FUND
Actuarial Accrued Liability $1.1 billion $1.0 billion Actuarial Accrued Liability $60.3 million $58.6 million
Assets Held to Pay Those Liabilities $1.4 billion $1.3 billion Assets Held to Pay Those Liabilities $32.6 million $31.3 million
Unfunded Actuarial Accrued Asset ($323 million)($285 million)Unfunded Actuarial Accrued Liabilities $27.7 million $27.3 million
Funded Ratio 129.10%127.20%Funded Ratio 54.10%53.40%
MUNICIPAL GENERAL DIVISION VOLUNTEER FIREFIGHTER'S FUND
Actuarial Accrued Liability $7.3 billion $7.1 billion Actuarial Accrued Liability $50.1 million $50.3 million
Assets Held to Pay Those Liabilities $5.7 billion $5.4 billion Assets Held to Pay Those Liabilities $78.5 million $74.0 million
Unfunded Actuarial Accrued
Liability $1.6 billion $1.6 billion
Unfunded Actuarial Accrued
Asset ($28.3 million)($23.6 million)
Funded Ratio 78%76.7%Funded Ratio 156.50%146.80%
MUNICIPAL POLICE DIVISION LEGISLATIVE FUND
Actuarial Accrued Liability $3.0 billion $2.9 billion Actuarial Accrued Liability $32.8 million $32.1 million
Assets Held to Pay Those
Liabilities $2.3 billion $2.2 billion
Assets Held to Pay Those
Liabilities $46.2 million $44.5 million
Unfunded Actuarial Accrued Liability $712 million $724 million Unfunded Actuarial Accrued Asset ($13.4 million)($12.3 million)
Funded Ratio 76.20%74.90%Funded Ratio 140.90%138.30%
ACTUARIAL VALUATION - FUNDING
8 New Mexico PERA Popular Annual Financial Report 2021
The actuarial valuation performed for financial reporting purposes is prepared in accordance with governmental accounting
standards which became effective for PERA for the year ended June 30, 2014.
The governmental accounting standards pertain to how public pension plans report their liabilities in their financial
statements. The liabilities and other pension-related amounts calculated under this standard are required to be reported by
PERA-affiliated employers who provide pensions to their employees as part of an employment benefit package.
The present value amount is the main factor used in calculating the liability or asset. The net pension liability equals the
present value of the projected benefit payments to current active and inactive employees attributable to past periods of
service less the amount of the pension plan’s net position.
The tables contain a summary of the results of the actuarial valuation for financial reporting purposes.
COMPONENTS OF NET PENSION LIABILITY
For the Fiscal Year Ended June 30
ALL PERA DIVISIONS (1)2021 2020
Total Pension Liability $23.0 billion $22.1 billion
Plan Net Position $17.8 billion $14.7 billion
Net Pension Liability (NPL)$5.2 billion $7.4 billion
NPL Ratio 77.25%66.36%
JUDICIAL FUND
Total Pension Liability $173 million (1)$223 million (2))
Plan Net Position $101 million $84.9 million
Net Pension Liability (NPL)$73 million $138.5 million
NPL Ratio 58.21%37.99%
MAGISTRATE FUND (1)
Total Pension Liability $59.5 million $58.6 million
Plan Net Position $35.2 million $29.1 million
Net Pension Liability (NPL)$24.3 million $29.5 million
NPL Ratio 59.07%49.59%
VOLUNTEER FIREFIGHTERS' FUND (1)
Total Pension Liability $53.1 million $52.0 million
Plan Net Position $84.7 million $68.8 million
Net Pension Liability (NPL)($31.6 million)($16.9 million)
NPL Ratio 159.74%132.62%
(1) Based upon assumed rate of return on investment of 7.25%.
(2) Based upon assumed rate of return on investment of 4.34%.
ACTUARIAL VALUATION - FUNDING
9 New Mexico PERA Popular Annual Financial Report 2021