Legislators to receive pension increase
Retired legislators Bob Craddock of Las Vegas and Dave Nicholas of Reno will be the only two who receive the controversial 1989 legislative pension increase.
That’s the effect of a Nevada Supreme Court opinion that wraps up a decade of legal and political wrangling created when lawmakers voted themselves a 300 percent pension increase in 1989.
For Craddock, 68, the decision means his monthly check will rise to $1,344 a month from $325. For Nicholas, 69, the monthly check will be $1,147 a month instead of $284.
Since the decision is retroactive to November 1989, both Craddock and Nicholas will each also receive checks of more than $150,000 in back benefits plus interest.
The opinion was signed by just four of the seven Nevada Supreme Court justices: Myron Leavitt, Bob Rose, Miriam Shearing and Nancy Becker.
Justice Deborah Agosti disqualified herself because she presided over Nicholas’s original suit as a Washoe District Judge. Justices Cliff Young and Bill Maupin disagreed with the decision.
The pension increase was vetoed by then-governor Bob Miller, but the Legislature voted to override and pass it anyway. Then the bill’s prime-mover, Sen. Don Mello, D-Sparks, retired and claimed the higher retirement benefits.
But public outrage forced the Legislature to return and repeal the increase in November 1989, and the Public Employees Retirement System pulled back the higher benefits.
Mello, Craddock, Nicholas and several others filed a series of lawsuits.
It didn’t take the Supreme Court long to reject Mello’s claim. Most other claims dropped away as well.
But the court ruled this week, fully 10 years later, that Craddock and Nicholas weren’t in the same boat since they were not members of the Legislature when the bill was passed and retired during the five-month period when the new benefits were the law. They had no part in creating the legislation.
“An employee’s rights become absolutely vested when he retires and all conditions for his retirement benefits have been met,” says the opinion written by Leavitt.
It says those pension rights are constitutionally protected once the recipient retires.
“Adopting a rule that would allow the Legislature to alter pension benefits after they have been absolutely vested simply to bar these appellants from taking advantage of the short window of opportunity when AB820 was law would undermine the validity of contractual benefits for all public employees,” says the opinion.
“We are unwilling to create a precedent that would impair thousands of employees’ rights solely to prevent a few individuals from collecting greater benefits as a result of the passage of AB820.”
Retirement system officials have estimated the increased benefits will cost the system some $20,000 a year.
Justice Young dissented, arguing that Craddock and Nicholas didn’t actually vest their rights to the increase. And he argued that they timed their retirement to take advantage of the higher pension rate.
Maupin argued simply that lawmakers intended to void the pension increase in its entirety and that Craddock and Nicholas lost nothing in the process.
Both disagreed with the majority’s position that taking back the increase in this limited case would violate the constitutional rights of the two men.