The PERS cost creep continues.
According to TransparentNevada, a website maintained by the Nevada Policy Research Institute, the number of former Nevada government employees drawing pensions in excess of $100,000 a year from the Nevada Public Employees’ Retirement System now exceeds 2,150. In 2013, when pension data were first made available the number was 1,000.
To pay for these lucrative pensions, starting in July the regular PERS members — teachers and other government workers — saw the amount of each paycheck that must be paid into the pension account increase from 28 percent to 29.25 percent. Half of that amount comes from the worker and half from the taxpayers. It is all taxpayer money to begin with.
Police and firefighters, who tend to have shorter careers, now must chip in 42.5 percent of their salaries, up from 40.5 percent. Again, half from the employer.
Despite these increases in contributions, PERS still will have a huge unfunded liability — more than $40 billion if you use generally accepted accounting principles.
According to Robert Fellner, NPRI’s policy director, all of the contribution hikes that have occurred over the past decade have gone towards paying down PERS’ debt rather than covering the pension checks for future retirees. “The debt component is now so large that 45 percent of what Nevada teachers will pay to PERS next year will go towards funding other people’s retirement, rather than their own, future benefit,” Fellner wrote earlier this year.
Fellner calculates the cost of funding other people’s retirement checks will cost the average teacher $7,680 this year.
Efforts to reform PERS over the years have gone nowhere. Perhaps because lawmakers themselves are members of the PERS racket.
The Nevada government worker retirement system, unlike anything found in the private sector, is based on a defined-benefit plan, meaning pensions are calculated as a percentage of the highest pay the worker receives at the end of his or her career times the number of years worked.
PERS benefits have ratcheted up over the decades by virtue of incremental benefit increases, collective bargaining gains, earlier retirement age, allowing the purchase of years of service, padding base pay with add-ons such as callback, standby, holiday, shift differential, extra duty, hazard and longevity pay, and simple compound interest.
According to the American Enterprise Institute, the average Nevada public employee pension is $64,000 a year or $1.3 million in average lifetime benefits, the highest in the nation. Meanwhile, the average Social Security annual benefit is $16,000.
It is long past time that the state change this ever more costly pension program from the defined-benefit plan to a defined-contribution plan, similar to the 401(k) plans used by corporations. The worker and the employer each contribute a set amount of the salary and the money is invested until the worker cashes out.
A bill to do this was introduced in the 2013 legislative session. Though it would have applied to future retirees only, the bill garnered no discussion and no vote was ever taken. It died without a whimper. — TM
Retired PERS employee says
Quit bitching about something that you know nothing about. You are nothing but a paid shill for a do nothing fakeass organization. If you have an issue with what you will be making when and if you ever get a real job, bring it up with your employer.
NPRI needs to dissolve into the sewer system……
Name ONE thing of any worth that NPRI has done for the good of Nevada? One thing…..I’ll be waiting with baited breath
Maurice White says
I see you have drunk the NPRI koolaid. Not much in this Fellenr type diatribe is true. Alternative universe formulas and misrepresented “facts” do not make for good commentary. You can do better than this.
Keith Brainard says
This article fails to point out that a) Nevada public employees are paying for one-half of the cost of their retirement benefit; and b) these employees do not participate in Social Security.
Why would you exclude these important facts?
Vegas408 says
You didn’t mention that NV PERS is one of the models of the way a state pension plan should work. Wall Street Journal praised the NV PERS as one of the best public pension plans in the nation, earning 8.5% for fiscal year 2019. I guess those facts don’t fit into your agenda of jealousy and misinformation to all the other jealous haters out there. Here is the link for those that want to educate themselves and not listen to one sided, agenda driven garbage.
https://www.nnbusinessview.com/news/nevada-public-employee-retirement-system-earns-8-5-percent-return/
OST RICH says
So someone as clueless as the author of this article quotes someone even more clueless from NORI. Got it. It’s obvious neither of these looks have done anything to actually research PERS. It is healthy, the best in the country, and as long as looks like the two of you don’t get your paws on it, it will be great. Here’s a news flash. These systems are fine until greedy politicians and clueless lobbyists view the system as a pool of “public money.” It isn’t.