Nevada PERS takes neutral stance on many legislative bills
April 10, 2015
The Public Employees Retirement System board on Wednesday voted to take a neutral stance on most of the legislative bills aimed at changing the rules for state and other public workers.
Executive Director Tina Leiss said the board's concern is whether any of the legislation would impact PERS funding or its mission to provide retirement benefits to public employees. Policy, she said, is up to the Legislature and governor.
Primarily Republican members of the Legislature have proposed numerous changes to PERS rules but Leiss said most of those on Wednesday's list don't pose significant financial problems for the system.
The six measures are just some of the bills being reviewed this session.
Leiss said the system would need some time to sort things out if all or most of them are approved because of the impact some measures will have on other measures on the list.
"If all these bill were to all pass together, we would start to have an issue that might change our position," she said.
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Probably the most sweeping pieces of legislation is SB406 by Senate Majority Leader Michael Roberson, R-Las Vegas.
That bill includes a provision that would forfeit all benefits for a public worker convicted of a felony. Leiss said the problem in analyzing the impact of that provision is it doesn't say what types of felonies it would apply to or whether it applies to felonies committed while in public service or anything even if committed 10 years earlier. Board member Rusty McAllister, representing unions on the board, said other states with similar laws apply it only to felonies committed while in public service, not crimes committed outside of public employment.
He also pointed out "all felonies are not created equal," saying in certain circumstances, marijuana possession is a felony.
"Does that warrant taking away benefits?" he asked.
Board Chairman Mark Vincent said it seems to him the rule should apply only to people whose crime results in terminatation.
SB406 would reduce the annual credit toward retirement from 2.5 percent to 2.25 percent of final salary. Police and fire would remain at 2.5 percent per year of service.
The change would mean regular public employees must work 33 1/3 years instead of 30 years to get the maximum 75 percent of salary as a retirement benefit. Leiss said that appears to be designed to extend worker service.
It also would require judges to pay half their premiums, which are currently 100 percent covered.
The board took a neutral position on the bill.
The board took a position in support of Sen. Debbie Smith's SB356, which would wipe out a court ruling making records that include what individual retirees get each month public.
Leiss said the files of individual retirees still were confidential but the compiled reports containing some of that information including the monthly amount were ruled public by Carson City District Court and the Nevada Supreme Court.
Leiss pointed out PERS did not request the bill. Marty Bibb of the Retired Public Employees of Nevada said his group did.
She said the bill would "put us back to what we thought were the rules for 40 years."
SB387 would change the rules when public workers purchase credits to increase the total time they have in public service for calculating retirement benefits. Public employees are currently allowed to buy up to five years of added credit. The bill doesn't change the fact that added credit is still used to increase retirement benefits. But it does prevent workers form using those added credits to retire early. PERS board members voted to stand neutral on that bill.
The board voted to oppose AB378 because of one section that allows paying "master teachers" a stipend which would increase a specific year of salary from as low as $50,000 to up to $200,000.
Since retirement checks are based on the highest three years of compensation, Leiss said that would "have an extreme impact" on the retirement such a teacher would get.
"It could more than triple their take home benefits," she said. "Even for a couple of people, this would greatly increase our liability."
She said PERS already has rules in other areas to prevent that sort of "spiking" of benefits. The key would be to declare that added one-time cash is not part of defined compensation for calculating PERS benefits.
The board was also neutral on AB312, which would set retirement pay at the average of the highest five years pay instead of three years. Leiss said that would make for a minimal savings to PERS. SB312 would also raise the retirement age to the Social Security retirement age of 67 instead of allowing everyone to retire after 30 years with full benefits. Police and Fire members could retire at 10 years less than that — 57 years old.
Finally, the board was neutral on AB363, which would provide a new survivor benefit for public workers who are killed in the line of duty. Leiss said there are a number of things unclear about how that would be applied. If applied only to police and fire members, she said the impact would be minimal — two-tenths of a percent of payroll. If expanded to all workers, she said it could be bigger.
Members balked, however, at the provision that would end the benefit if the surviving spouse remarried.
The board voted to stand neutral on the bill with the potential to oppose it if the remarriage provision isn't changed.
The meeting was held at the request of Legislative leadership who said they needed to know the system's stance on those measures before acting.