Assemblyman Randy Kirner, R-Reno, on Monday introduced legislation that would dramatically alter the Public Employees Retirement System’s benefits for employees hired after July 1, 2016.
He said the plan would protect current state and public workers, allowing them to keep their existing defined benefits plan.
But new hires would be put into a hybrid plan made up partially of a defined benefits plan but with a large “defined contribution” portion.
The bill would cap annual benefits and prohibit workers from buying additional service credit. It also would require workers to stay until they reach the full retirement age required by the Social Security Act before they can collect full, un-reduced benefits.
At present, there is no cap on benefits and workers can buy up to five years additional service credit. The state contribution per employee is set to increase to 14 percent this session with workers contributing an equal amount of their pay.
Under Kirner’s plan, employee and employer would each contribute 6 percent of total pay with the public employer adding in another 6 percent to try to reduce and eliminate the unfunded liability of the existing system.
The existing plan is a little over 70 percent funded if everyone in PERS were to retire and demand benefits. Kirner said that number has “quadrupled” since 2000 and will continue to grow unless major changes are made to the retirement plan.
He said his plan would be more attractive to workers who no longer stay in public service for 30 years then retire. He said unlike PERS, workers would be able to take the money they contributed to their retirement account with them if they leave public service for the private sector because their retirement savings would be in an individual trust account.
The bill also opens the door for future changes to the public employee retirement plan, stating that new hires “as a condition of his or her employment shall be deemed to have consented to the revision or termination of the provisions of the hybrid retirement program at any time.”
The bill was referred to Government Affairs for study.