Pension plan could save money

Monday, April 30, 2001 | 10:38 a.m.

CARSON CITY -- Gov. Kenny Guinn and the Legislature have a chance to save taxpayers more than $250 million over the next 40 years.

It would seem like a simple decision, but it's not -- given Nevada's sluggish economy.

The savings would come in converting the pension plan for Nevada Supreme Court justices and District Court judges to a fully-funded plan.

To make that change requires an up-front investment of nearly $14 million. Gov. Kenny Guinn has included the amount in his executive budget, but finance experts now believe that more than $160 million will have to be sliced this fiscal year.

One of the casualties would be the retirement switch. Decisions concerning which programs will be shelved will be made in the next two weeks.

Currently, the Legislature pumps money every year into the pension plan to pay for the benefits and premiums of judges. An 18-month study by a legislative committee recommended the system be switched to a fully-funded pension plan.

An actuarial analysis by The Segal Co. showed that by 2041 the state would have spent $269.8 million continuing the present system. But by changing and investing an initial $14 million, the state would save $104 million in 40 years and, in addition, would have a fund balance of $150 million.