Nevada Legislature: Public employees protest bill to change PERS

Public employees lined up in the Assembly Government Affairs Committee on Monday to protest legislation the author conceded is designed to save money by reducing the average employee retirement check.

Assemblyman Glenn Trowbridge, R-Las Vegas, said AB312 would base a state or local government retiree’s check on the highest five years of service instead of the current three. It also would bar public employees from retiring before they reach, 67, the age where private workers receive full Social Security benefits. Police/fire retirees would have to wait until age 57.

Five years instead of three “would make determining average compensation longer and therefore lower,” Trowbridge said. He said the same is true of the higher retirement age.

He said even fiscal experts can’t agree on how much those changes would save but that it could be “up to $41 million.”

Trowbridge said the idea is to “gradually reduce the outflow of PERS revenue and, therefore, gradually reduce the unfunded liability.”

Priscilla Maloney of the American Federation of State County and Municipal Employees said there have been no actuarial studies of the impact of the legislation but that she believes it would make state and other public service less desirable, making it harder to recruit good workers. She also argued that PERS is performing well and doesn’t need changes.

“PERS is a well-funded, sound system on track to reduce the unfunded liability,” she said.

Pointing out there are nearly a dozen PERS bills this session, she said, “all these bills do is chip away at what is already a sound system.”

Ron Dreher of the Peace Officer Research Association said the bill would raise the age when peace officers retire to at least 57, 10 years lower than general employees but still well above where they retire now.

“Why would we change a system that is not broken,” Dreher asked.

Dreher and other witnesses also pointed out that police and fire workers retire younger because of the dangers and physical demands of their jobs

Marty Bibb of the Retired Public Employees of Nevada, said the bill is unnecessary because PERS has a plan to reduce the unfunded liability. He said many state jobs are currently vacant because they can’t find workers to take them.

The measure was supported by both the Las Vegas and Reno/Sparks Chambers of Commerce. Trey Abney of Reno/Sparks, described AB312 as “a reasonable reform.”

He said lawmakers need to “start taking steps to deal with whatever that unfunded liability is.”

Abney also said the money saved could go into such things as schools, infrastructure and other needs.

Committee members were told that unfunded liability is about 30 percent. That means if all public members retired at once, PERS would only be able to pay a bit more than 70 percent of total obligations.

But PERS supporters have repeatedly said that will never happen. And Trowbridge admitted to the committee that, if PERS does as well in the next three or four years as they have in the past two years, that unfunded liability would go away because the system would be totally funded. PERS investments have made double-digit returns in the past few years.

PERS provides retirement benefits for more than 130,000 public workers in the state.

The committee took no action on the bill.