Lawmakers take aim at state employee retirement benefits

By Cy Ryan (contact)

Monday, Dec. 15, 2008 | 5:40 p.m.

CARSON CITY – State legislators, looking for ways to save money, are thinking about curtailing the retirement benefits of future government employees.

Sen. Bob Coffin, D-Las Vegas, said the lawmakers are going to ask for new taxes in the 2009 Legislature and there has to be some “give” from the state Public Employees Retirement System.

But Dana Bilyeu, executive officer of the system, told the interim Legislative Interim Retirement and Benefits Committee Monday that the benefits cannot be reduced forthose who are presently in the system. She said the benefit structure could only be changed for new employees joining the system that includes both state and local government workers.

Senate Minority Leader Bill Raggio, R-Reno, asked Bilyeu to submit recommendations to the 2009 session what should be done.

Bilyeu told Raggio the Nevada system had the seventh lowest contribution rate among the governmental units in the nation.

There are 155,846 members and beneficiaries in the system, including local government employees, police and firemen. Benefits are being paid to 38,130 people and there are 117,716 active and inactive members.

The average benefit paid to regular members was $2,306 a month and $3,740 a month for police and firemen who retire. The average government worker earns $46,159 a year and police and firemen make $70,194.

Coffin said the salaries of local government are higher than state pay and that is driving up the average.

Gov. Jim Gibbons’ Committee on Spending and Government Efficiency is also looking at potential reductions in the public employees' retirement system.

The system, like other investors, is suffering from losses in the stock market. It ended the June 30, 2008 fiscal year with $22.1 billion in assets, down 3.4 percent. The fund, since 1984 has generated an average 10.2 percent annual return.

But so far this year, the assets have fallen to $18 billion with a drop of 19 percent.

Ken Lambert, investment officer for the system, said that even with this dismal showing, the Nevada retirement fund has “out performed 80 percent of the other large pension funds.”

Lambert reported the $4.4 million in the legislative retirement fund and the $37.7 million in the judicial fund were both down 4.3 percent for the last fiscal year. Since its start in 1990, the legislative fund has generated a 9 percent return and the judicial fund, since its beginning in 2001, has received a return of 5.6 percent.