Updated September 3, 2026. Quick answer: New Mexico Educational Retirement Board (NMERB): the COLA is automatic each July 1 (half the CPI change, floored at 2%, capped at 4%), service credit can be purchased, and no DROP was found. Vesting takes five years of earned service credit.
Provisional. This page is published at medium confidence. The specific points that could not be confirmed are listed under What could not be verified below, and are named rather than smoothed over.
The verdicts
| Is the COLA granted? | Automatic |
|---|---|
| Is the COLA compounded? | Not stated |
| Vesting | 5 years of earned service credit |
| Buy service credit? | Yes |
| DROP? | None found |
| State | New Mexico |
Those first two rows are separate questions and are routinely confused. Whether you get an increase at all is one thing; whether it compounds is another. A system can grant an increase automatically every year and still compute it against your original benefit forever, which is a materially worse deal than it sounds.
The COLA
“Thereafter, each July 1, a retiree’s annuity will be adjusted by either one-half the percent change in the Consumer Price Index of the preceding calendar year or four percent, whichever is less. The annual adjustment shall be no less than two percent unless the CPI is less than two percent. In this case, the COLA will be the same as the percent change in the CPI.” Disability retirees instead get their first COLA “on July 1 of the third year following retirement.” No compounding language was found in the materials reviewed.
Buying service credit
ERB purchasable service includes withdrawn/refunded contributions (repayable up to the amount withdrawn plus interest), up to 5 years of military or Public Health Service Commissioned Corps service, and up to 5 years of out-of-state or private-school teaching service (combined military plus other categories capped at 10 years total). “The cost to purchase service credit is based on an actuarial cost that reflects your length of service and current earnings.” It is payable by lump sum or rollover/transfer.
Run your own numbers before deciding: some purchases never recover their cost, and the calculator shows which.
Coordinate this with your overall retirement plan
An adviser can help weigh a COLA that may not compound, a service-credit purchase that may never pay for itself, or a DROP election against the rest of your retirement plan, but that does not replace the numbers in your own member statement.
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Vesting
“To become vested in the ERB plan, the member must complete five years of earned service credit… Allowed service credit does not count towards becoming vested in the ERB plan.” COLA start-age eligibility (separate from vesting) differs by tier: Tier 1/2 members (joined before 7/1/2013) can start receiving a COLA at 65; Tier 3/4 members (joined on/after 7/1/2013) at 67.
DROP
No DROP program appears in ERB’s COLA or service-credit pages reviewed this session.
DROP is rarer than it appears across the systems on this site: most have none.
What could not be verified
REFUND TERMS: this page does not state what happens to your contributions if you take a refund instead of leaving your account with the system: that comparison was not independently researched for this system this session, and is left as an open gap rather than guessed from another system’s rule. Consult your own plan’s refund/forfeiture terms before deciding. Any additional field marked “not stated” in the verdicts table above was genuinely absent from the official materials read, not omitted for space.
Sources
Read September 3, 2026.
Related public pension systems: Oklahoma TRS · Oklahoma OPERS.
General information drawn from each system’s own official published materials, not legal, tax or financial advice. Vesting, COLA and buyback rules are set by state statute and plan tier, differ materially by hire date, and can change by future legislation. This page cannot see your own member statement, which governs. We are not a law firm, a tax adviser, or a fiduciary, and this is not personalized advice.