The total premiums to pay for state worker retirement costs will increase a half percent in the coming biennium.
That puts the total premium for the Public Employee Retirement System up to 29.75 percent of pay.
For state workers, that cost is split 50-50 between state workers and the state while many local government workers get their entire premiums paid by those governments.
Kent Ervin of the Nevada Faculty Alliance told the members of the Senate Finance and Assembly Ways and Means committees Friday that split combined with the fact there is no proposed raise in the governor’s recommended budget this session translates to a quarter percent decrease in take home pay for state workers in PERS.
PERS Executive Director Tina Leiss told lawmakers the increase is mandated by the actuarial study done before every session to keep the program solvent. PERS provides retirement benefits not only for the roughly 25,000 state workers but local governments, school districts and improvement districts throughout Nevada. The program currently has 111,959 members and more than 70,000 beneficiaries.
For police/fire members in PERS, the increase is even greater, she said, coming in at about 1.5 percent to a hair under 44 percent. The police/fire pool is not only much smaller than the regular membership, those workers tend to retire at a much younger age than regular members.
PERS also manages the retirement plans for judicial and legislative members but those programs are tiny by comparison and neither will see a premium increase in the next two years.
Leiss told lawmakers PERS assets grew dramatically in 2020. She said the total value of assets is up 18 percent this fiscal year to $54 billion. PERS has been consistently ranked as one of the best managed public retirement programs in the country.
Because it has become so large, she said the biggest enhancement sought in the proposed budget is to hire a second investment manager.
That got the attention of Ways and Means Chair Maggie Carlton, D-Las Vegas, who questioned the staff additions even as most state agencies are under a hiring freeze because of the pandemic.
“With a $54 billion program, there’s a large risk in having just one investment staff member if something were to happen to Mr. (Steve) Edmondson,” Leiss said.
She pointed out that other public retirement programs have run into trouble when they lost an investment manager and had to hire from outside.
She said a second manager would provide continuity within the investment program.
PERS is also asking for a new chief administrative analyst position. Between the two, the cost comes to just over $400,000 a year for the coming biennium.
The committee took no action on the proposed budget.