SANTA FE, N.M., APRIL 11, 2025

Understanding Recent Market Changes and Your Benefits

We understand that you may be seeing news about recent ups and downs in the stock market. We want to assure you that these market changes will not affect your current pension benefit payments.

Why Your Benefits Are Secure:

Our pension plan is a defined benefit plan. This means the amount of your future benefit is set by a formula in state law. It would take an act of the legislature to change these laws, and any such change would most likely only affect benefits that haven’t been earned yet (meaning benefits for future work). We are not facing any situation that requires these kinds of changes today.

Even in a very serious and long-lasting downturn in the markets, your vested benefits are legally protected under the New Mexico Constitution. While the state might need to provide more funding in such an extreme case, your earned benefits are secure.

What’s Happening in the Markets?

You might be wondering about the news you’re seeing. Recently, the markets have been more unpredictable than usual. This is mainly because of uncertainty around tariffs, which are like taxes on goods coming into the country. These tariffs have been higher than expected, and this has caused some bumps in the market.

For example, a key measure of U.S. stock performance, the S&P 500, had reached a high point in February but has since gone down by almost 18% in just a few weeks.

How This Affects Different Investments:

  • Stocks: The drop in stock prices has impacted many investors.
  • Bonds: Investments in bonds have also seen some movement, with interest rates changing.
  • Company Borrowing: It’s become more expensive for companies to borrow money, which is common when the market is uncertain.

Our Approach to Protect Your Future Benefits:

Here at the pension fund, we saw some signs in February that the stock market might become more risky. Because of this, we carefully decided to slightly reduce the amount of our investments in stocks. Right now, about 25% of our total investments portfolio is in stocks, which is a little less than our target of 28%.

Looking Ahead:

What happens next in the markets will depend heavily on government decisions about tariffs and the economy, as well as actions taken by the Federal Reserve (the central bank of the U.S.). If things become more or less stable in these areas, we expect the markets might recover sooner rather than later.

Our Diversified Strategy:

We have built a well-balanced investment plan that includes a variety of different types of investments. This is specifically designed to help us weather times when the market is unstable. While a big and long-lasting downturn can still be challenging, we believe that over the long run, the markets are likely to stabilize and bounce back.

Your Peace of Mind is Important:

If you have any questions or concerns about your benefits or how these market changes might affect you, please don’t hesitate to reach out to us at 1-800-663-1919. We want to make sure you feel secure and informed.