Lawmakers consider making local governments provide for their retirees
April 8, 2003
Lawmakers were urged Monday to support legislation requiring state and local government worker benefit plans to give retirees the same rates as active workers and mandate that local governments take care of their retirees.
But members of the Senate Finance and Assembly Ways and Means committees were asked not to approve AB286 without putting in enough money to make sure state workers don’t have to subsidize non-state retirees.
With a few exceptions, most non-state workers who joined the state benefits program upon retirement must pay their entire premium costs. For Carson City and Clark County school district retirees who receive no help from their former employers, that means $711 a month for an individual and more than $1,400 a month for a family.
Assemblywoman Ellen Koivisto, D-Las Vegas, prime sponsor of the legislation, said only the Eureka and Mineral county school districts, Carson City and Washoe County contribute toward retiree benefits.
She said most of those contributions are in the range of $100 a month; only the Mineral school district makes a significant contribution, covering about $650 a month for retirees.
Many local governments and school districts provide no benefits program for retirees.
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In addition, retirees are rated separately for insurance premiums, not as part of the much larger state employee pool. That means higher premiums than active workers pay.
Koivisto was joined by 19 Assembly members, including Carson City’s Ron Knecht, in sponsoring the legislation. It would require state and local governments to “commingle” their retirees and active employees so all pay the same premium rate. That would lower premium rates for retirees, while forcing small increases for active members.
But according to employee representatives, that would also force active state workers to subsidize retirees.
Jim Richardson of the Nevada Faculty Alliance said the cost is $4.5 million a year.
“I beg you not to pass this bill without the accompanying $4.5 million from somewhere,” he said. “Otherwise, the existing members would subsidize the bailout of 1,400 individuals (in the retiree group).”
The bill also would require local governments to pay a portion of the costs of covering their retirees — whether they stay with the local government or join the state-operated benefits program. Each local entity would be required to allow its workers who joined the state upon retirement to come back to the local plan.
Lawmakers took no action on the bill, saying they also want to consider several other measures that would change the Public Employee Benefits Program, especially one which would order a study of the entire system and develop recommendations to change it.