PERS Director explains history and concerns about double dip law
The head of Nevada’s Public Employees Retirement System says it’s up to the governor and Legislature whether certain employees should be allowed to collect both their salary and pension.
George Pyne said his concern is what financial affect the practice has on PERS.
“The financial concern is that, overall, if you have a lot of members of the system retiring earlier for whatever reason, there could be a cost to the plan,” he said. “That’s the thing we need to monitor and look at.”
That’s why the legislation sunsets in 2005 and directs PERS to study the long-term effects of Assembly Bill 555 and report to the 2005 Legislature.
Pyne will review the issue Tuesday for the Board of Examiners and explain the history of AB 555, which allows public bodies to declare a “critical shortage” in selected jobs and allow retirees to return to work in them without giving up their pensions.
He said he has already made a similar presentation to the Clark County School District, which used the legislation to hire 12-15 specialists out of retirement for this school year.
Pyne said the original bill was sponsored by the University System in 1999 so campus officials could hire some veteran school teachers to expand programs to teach public school teachers.
“In the study, we saw zillions of teaching vacancies coming about over the next decade,” he said
But since then, Pyne said, officials in a variety of different professions have warned of impending shortages including data processing and nursing.
“So we said let’s make this uniform and make this a critical need, that employers should consider these criteria and include any profession that meets the standards,” he said.
That expanded the scope of AB 555 and left the decision over which job classifications fit within the definition of “critical shortage” up to the individual governing bodies – the Board of Examiners, state Board of Education, university board of regents, and local governments.
“Our job is to monitor the experience and assess the funding impact on the plan,” he said.
If the number of “critical” positions is not excessive, Pyne said the impact should be minimal. Individually, he said, those workers are eligible to retire and have paid enough into the plan over the years to cover the cost of their retirement.
So if they retire and then return to work, the cost to the plan would be the same as if they retired and a new employee took the job.
He said, however, the situation changes if large numbers of public workers take advantage of the deal.
“You build a pension plan around assumed dates of retirement,” said Pyne. “If they retire earlier than assumed, there’s a cost. If they retire later, there’s a benefit to the plan.”
He said a large number of workers retiring early and returning to work would mean they would be drawing retirement benefits much longer than the averages used to create the plan and its rates, which could create a large financial impact.
Pyne said the policy issue is still up to the individual public governing boards. His job Tuesday at the meeting with Gov. Kenny Guinn, Attorney General Frankie Sue Del Papa and Secretary of State Dean Heller, will be to explain the history of the legislation and its potential impacts on PERS, the retirement system for more than 45,000 public employees in Nevada.