Pay plan for state workers has limits

Thursday, July 12, 2001 | 11:11 a.m.

CARSON CITY -- The new double-dipping pay plan for government workers in Nevada, which allows them to collect their pensions and still draw a salary, won't be open to everybody.

And the new law will automatically expire in 2005 to permit a review into whether this additional benefit might be a drain on the State Public Employees Retirement Fund.

The 2001 Legislature approved Assembly Bill 555 that allows state and local governments, the Board of Regents, the state Department of Education and the Nevada Supreme Court to designate certain jobs as critical if there is a shortage of personnel to fill them.

The law permits people who fill such designated jobs -- oftentimes people who have retired -- to draw their pensions as well as their salaries.

The first use of the law, effective July 1, came Tuesday when the state Board of Examiners voted to designate 22 positions, including the job of Dick Kirkland, director of the state Department of Motor Vehicles and Public Safety.

Kirkland, who now earns $103,000 in his current position, will be able to draw more than $70,000 from the pension he accrued in his 29 years with the Reno Police Department.

Kirkland and Gov. Kenny Guinn said this law would permit the state to retain highly trained employees.

George Pyne, executive director of the public employees retirement system, said Wednesday that six or seven other states have similar laws but most are tailored to draw schoolteachers back into the classroom.

The law prior to AB555 allowed a government worker who was drawing a pension to return to a job at less than half time. And the individual was restricted to earning less than $16,000. If the pay exceeded that, the pension payments stopped.

The law permitted a retired employee, however, to draw his full pension if he were elected to a state or local government job. That's what happened in the case of Kirkland. He ran for sheriff in Washoe County and was elected. So, he retired from the Reno Police Department with a pension of about $70,000.

His sheriff's pay was $78,000 and he was able to collect his pension for a package of close to $150,000. When he was hired by the state, he lost his pension and drew only the salary then of about $95,000.

Pyne said this new law has limitations. It only applies to workers who are fully eligible to draw retirement.

For instance, a regular government worker, to be eligible to take advantage of the double-dipping law, would have to have five years of service and be 65 years or older, have 10 years of service at 60 or older or have 30 years of service at any age.

The qualifications for double-dipping for police or firemen are five years of service at 65 or older, 10 years of service at 55 or older; 20 years of service at 50 or 25 years of service at any age.

"They must meet those minimum qualifications and the employers must determine there is a critical labor shortage position," said Pyne, whose agency drew up the bill.

In 1999, Assembly Bill 74 was introduced in the Legislature to permit the Colleges of Education at UNLV and UNR to use this double-dipping procedure to recruit retired professors. That bill passed, permitting the schools to use this for two years, said Pyne. In addition, it required the retirement system to do a study on expanding the law.

That resulted in AB555 that will expire in 2005. Pine said nobody knows if this new law will have an impact on the retirement fund. It may encourage people to retire earlier and then get hired back, he said.

But there's no estimate yet on how many people will take advantage of the new law.

"There is a big interest in the Clark County School District," he said. There has been a need for special education and speech teachers and counselors. And he expects quite a few individuals to apply from that school district.

A person, who retires and then goes back on the job has the option to re-enroll in the pension system. If the individual does re-enroll and starts paying the monthly premiums, then he or she would start to earn higher retirement benefits.

At present, a government employee is credited with 2.5 percent of his salary for each year of service, toward his pension. For example, an employee who worked 20 years and retired would earn 50 percent of his highest pay for retirement.

Under the new law, the employee who retired and returned to work could continue to add years to his retirement check. But the new added benefit would not be calculated until he retired a second time. They would not be receiving an additional 2.5 percent increase each year they were on the job.