More benefits proposed for state retirement

Monday, Nov. 20, 2000 | 12:01 p.m.

CARSON CITY -- The $13.4 billion fund of the Public Employees Retirement System of Nevada is solvent, and increased benefits are being recommended for some of the 80,000 members.

The retirement board received an evaluation from the Segal Co. that noted that the present premiums are slightly higher than needed to keep the system sound, but not high enough to trigger a rate reduction.

George Pyne, executive officer of the system, said the board decided to enhance the benefits without raising premiums.

State and local government employees and schoolteachers are enrolled in the system, which now has an estimated 23,000 members drawing pensions.

An employee who works five years is vested, or is guaranteed a retirement check after that time. The board suggested that be reduced to three years, meaning an employee who leaves the system after that period is entitled to pension money. This would become effective July 1.

The board is suggesting that single members in the system be able to designate a beneficiary to receive benefits if the individual dies before drawing retirement. Pyne explained that benefits for a married person automatically go to the spouse or minor children.

If the Legislature agrees to the plan, a single individual could select anybody to get the benefits, such as a friend.

The third recommendation calls for preserving the purchasing power of some individuals who leave the system early. Pyne gives the example of employees who enrolled in the system for 10 years but then left for a job outside the plan, leaving money in the retirement fund.

Under the current system, the pension amount is frozen at the level in effect when the employee left. The retirement board is recommending a 2 percent a year increase in those benefits to help offset inflation.

Pyne said the board could consider other changes in the benefit schedule before the plan is presented to the 2001 Legislature, which meets in February.

Even if these benefits are approved, the system will be able to continue on its goal to have a fully funded plan by 2024. That means there will be enough assets to cover all of the liabilities. At present it is 84.7 percent funded.

Public employers now pay 18.75 percent of a worker's salary as the monthly premium. About 20 percent of the employees are in a plan in which they contribute half of the monthly premium. In that system, the employee is paying 9.75 percent that is matched by the employer.

In the police-firefighters' fund, the employer pays 28.5 percent a month to cover the full premium.