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Monday, June 18, 2012 | 5:45 p.m.
While the state retirement system appeals a court order to release individual pension data, a privately funded nonprofit group has taken it upon itself to estimate pensions for hundreds of public employees throughout local and state government.
And though many of the group's results are fairly astronomical, they are not completely accurate — a fact that even Taxpayers United of America, the report's author, concedes.
The data, released Monday by Taxpayers United, assumes employees reach their fully vested retirement potential (which earns them an annual pension equal to 75 percent of their three highest salary years) retire at 55, then live another 30 years and get an average of 3 percent in annual cost-of-living boosts.
State retirement actuarial tables say life expectancy is 82 years, most public employees quit or retire after about 20 years, and around age 64. After 20 years of employment, they are eligible for a pension equal to about 50 percent of their three highest salary years.
Here’s one example of how those small changes can account for huge differences in estimated retirement pay:
Former Rebels basketball coach Lon Kruger is at the top of Taxpayers United’s list of pension payouts to UNLV employees. Kruger earned $606,000 in gross annual wages during his tenure at UNLV. By the Taxpayers United spreadsheet, his estimated annual retirement payment would be $466,000, earning him $17 million over the life of his retirement.
But if you put Kruger’s numbers into the “benefit calculator” on the state Public Employees Retirement System website, you get a different number. It estimates his annual payment around $113,000, if he retires at 65. Then if he lives to 95 and gets a 3 percent bump each year, his total earnings would be about $5.5 million. If he lives to 82, the amount is $2.7 million.
Kruger, who turns 60 in August, now is head coach of the Oklahoma Sooners.
Dana Bilyeu, executive officer of the Nevada Public Employees’ Retirement System, noted that the average annual payment to public employees in the system is $29,000. That compares to about $22,000 for those who receive Social Security retirement benefits. Public employees do not contribute to or earn Social Security.
“This is extreme in every single scenario,” Bilyeu said of the Taxpayers United estimates. She added that the PERS actuarial tables — which take into account life expectancy, retirement age and other factors — would have been readily available to the group.
Rae Ann McNeilly, outreach director for Taxpayers United of America, said the point of making the estimates was to show “how the system allows for outrageous pensions that the taxpayers just can’t sustain.”
“And the reason for them is to keep the union bosses and elected officials in power,” she added. “That’s the game that they play. They make it sound like it’s for the employees and the children. It’s not.”
She would like to see Nevada enact a law to put new hires in 401(k) retirement plans.
McNeilly has some support. A push for more austerity by Clark County commissioners in recent years has bolstered county staff to take tougher stands in union contract negotiations. A new contract with county firefighters, for instance, has for the first time language that obligates firefighters to pick up their portion of state-mandated increases in retirement contributions.
County Commissioner Steve Sisolak said McNeilly’s point was one being recognized in other states and cities.
“With life expectancy increases and earlier retirements, there’s not enough money to sustain those benefits over time,” he said. “That’s what these jurisdictions are running into.”
He recalled years when Lake Mead was so full, spillways were opened to release the water into the Colorado River below the dam. “Now look at the downturn,” he said. “You have to look ahead.”
He thinks the system should be “tweaked.” One area would be to base retirement payouts on all of an employee’s public work history, not just the three highest salary years.
McNeilly said the state retirement board could do more to make policy decisions like that easier. They could drop their appeal and release personal retirement information.
“That’s the big story here is, give us the information,” she said.
Comment removed by moderator. Personal Attack
Attention Gov. Sandoval: From the new Pew study, Nevada consistently failed to pay its full annual pension contribution from 2005 to 2010. The system was 70
percent funded in fiscal year 2010and faced a $10 billion funding gap.Nevada's management of its long-term liabilities for pensions was causefor serious concern and the state needed to improve how it managed its bill for retiree health care.
In addition, if those with PERS contributions have contributed to social security, their SS benefits are reduced by as much as 75% due to their PERS collection. So, I paid into social security with enough credits to get a decent amount each month. however, due to my 20+ years with PERS (so far) I will receive only 25% of what I paid out of my salary into social security.
Plus, if Ms. McNeilly, or the authors of the article did their research on PERS they would have found the following...
NVPERS' cost structure is exceedingly efficient for delivery of retirement benefits. On an individual basis, fully 80% of the benefits paid to our members are paid from the investments of the System.
The System's fees are more than 70% below the industry average. Nevada's all inclusive investment costs are 0.12% while the average large public fund pays 0.39% (for comparison, the average individual investor typically pays between
0.50% to 2.0% for investment management).
The result is NVPERS saves over $68 million per year in fees compared to the average large pension fund. This savings, compounded over a ten year period, results in over $990 million in added value to NVPERS' members.
(nvpers.org)
Plus, PERS invests in local companies as part of its investment plan.
AND as of Dec. 2011, PERS had 24.4 BILLION in assets. PERS NV is listed as one of the most stable and reliable retirement systems in the nation. It was ranked in the top 32% for returns (a good ranking for NV), and in the bottom 23% for risk (another good ranking for NV) when compared to state pension programs. AND NV PERS ranks in the top 13% for risk/returns efficiency- yet another good ranking for NV.
If it ain't broke, don't fix it.
And maybe, just maybe... if Ms. McNeilly understood exactly how PERS worked, was funded, and contributed to the state of NV, she wouldn't have such a hard time getting retirement info from people. (although I do stand with Dkallas, my salary is already posted online, MYOB about my retirement- especially since you have no idea how much I have self contributed to the fund - thus skewing the results anyway)
I didn't hear any complaints about public pensions when housewives, part timer's, those with no education or experience were making 150k-200k selling houses in their spare time during the LasVegas real estate boom. I didn't hear any complaints then. I didn't her any complaints about the 60,000 Lexus they were driving, the Hawaii vacations, etc..
Why did this pop up in the Rebel basketball section???
so the most glaring example of the unsustainable nature of pers is a guy who only paid into the system for a few years and doesn't even work here anymore?
sure lon kruger could be earning $466k/yr. from pers just as i could play in the nba if i were at all talented at basketball.
sadly, these types of silly hypotheticals are all that's needed to further enrage those who long ago came to the same conclusions of this study.
This story doesn't even mention the biggest howler in this embarrassingly misguided "study": faculty and professional staff of the Nevada System of Higher Education (including Lon Kruger) don't participate in PERS and have precisely the sort of 401-k style defined contribution retirement plan that this group advocates.
Part of their report is a list of 200 faculty and staff from UNR and UNLV who supposedly will receive hundreds of millions of dollars from PER. Only none of them will receive a dime from PERS. Ooops. Nevada News Bureau got this story right a year and a half ago when it wrote about the NSHE retirement plan as a "model"
http://www.nevadanewsbureau.com/2011/03/...
Apparently the GOP and associated groups don't mind class warfare if it's between public and private sector middle class workers. They figure if they can keep us busy fighting amongst ourselves we won't notice anything else.
Who in Hades is Taxpayers United of America? Are these things controlled by the so-called republicans and Corporate Fascists?
These things want to convert PERS over to 401K's that is subject to the stock market bubbles and busts.
After the almost financial market collapse of 2008, 401K's lost 23% of their value. Some are back to where they were but still the 401K holder lost 4 years of income increases.
Will those on 401K"s have to work another 4 years past their planned retirement?
Tell these Fascist republicans and the Corporate Fascists where they can go!
@Vidi and Weber: Do you know for sure that this organization is Republican or are you just spitting out the side of your mouth to stir the pot?
This is an attempt to get your money off the sidelines and into the wallstreet game so they can have a chance at your money with all of their dirivatives. Bottom line they want action in the worlds biggest casino.
Actually, Mr. Brown, some of the faculty and professional staff in NSHE do participate in PERS. Once a person has been in the PERS system, if hired into NSHE they stay in PERS, they cannot leave PERS and use the 401K system. This also applies if someone starts in NSHE as a classified employee and then takes a faculty or professional position, because all state classified employees are in PERS. Whether the report got the number of employees right is debatable, but the fact remains, some will have PERS benefits upon retirement.
It is very disappointing to see the Sun continue to slide into the same slanted reporting as the R-J. I used to read the Sun story on a topic such as teachers, public employee pensions, etc then read the R-J to see how they slanted the story usually by done by omitting certain facts to inflame their reader base.. While I have come to expect the anti-public employee opinion expoused by the R-J it used to be that the Sun would take a more neutral and professional approach. Over the last year this has slowly been eroding away. A few simple fact checking efforts, rather than just running with another story of the evils of public pensions, could have provided some balance and a more neutral presentation. Shame on you Sun, here's hoping you return to neutral reporting and a more professional approach soon.
@casinokid: You nailed it. If the GOP can push everyone into 401Ks, then their cronies (and major donors) on Wall Street stand to make billions in profits while the retirement funds of millions of people are gambled on the stock market.
IF PERS retirees average $29K while SS retirees average $22K, that's terrible. When we average in firefighters, teachers, and cops that would mean other workers are getting LESS THAN SS???? And, hey JOE SCHOENMANN what about the reduction in benefits when the retiree is under age 60?
So forget 401(k) and participate in Social Security. That would mean local government employees have to PARTICIPATE in paying for their retirements instead of the City (County, SD, US) paying for all of it. Would also encourage career changes from, to, within private to public sector--so better candidates would be available for those government jobs instead of constant preference for "experienced" public servants.
Roberta, public employees already contribute to the cost of their own retirements, along with the employer's contribution. In addition to also being taxpayers, it's not as if local government is going to be relocating to Plano, TX anytime soon. The money they make in the community stays in the community. (Unless they go and spend it at Wal-Mart or Home Depot. Then it stops briefly in Arkansas or Atlanta before heading to China.)
Now, if you work for the Venetian, the money you helped Sheldon Adelson make goes into Newt Gingrich's pocket, and last I checked he doesn't plan to live anywhere near here.
One thing that we have to note here is that there is not necessarily a direct relationship between the average PERS retirement payment and the average SS retirement payment. The story said that most employees quit or retire after 20 years and around age 64. I guess if you were saying the same thing about SS, which I have been paying into for nearly four decades, and am still about a decade and a half from being able to get full benefits, it might be different. By the time I could get full benefits from SS, I will have been paying into it for over 50 years. If the average SS recipient paid in for 40 years versus 20 for PERS, that is a significant fact. (I am not sure what the actual numbers are there, but they likely differ substantially.)
KY: State employees pay in, (some) local gov. employees pay in all of 1% or so. FLOOZY: There are also a bunch collecting both SS and PERS--you can vest in PERS with just 5 years and leave it there until you're 60, then collect.
It would probably be best for all NV public employee new hires to be placed into 401K plans vice the underfunded pensions currently in existence. Those with less than 10 years employment would be converted. Those with more than 10 years could retain their existing pension plan, albeit with knowledge that it's underfunded and politically vulnerable (and likely to be capped at some amount).
@NLV-Indep13: I am a state employee. I would love to know that if I were mere months from retirement, one big drop in the stock market could leave me with nothing to retire on. No thank you.
Melissa, casinokid--you guys say keep retirement funds out of the hands of 401k's and Wall Street. Melissa, you make it sound like PERS is some kind of big savings bank where you send your pension contributions and then after you retire you get your money back. It doesn't work that way. Your pension contributions are invested in stocks and bonds and hedge funds and derivatives and hopefully the return from those assets will cover your generous retirement benefits. Those benefits are actually based on projected returns and most states are EXTREMELY optimistic about the future returns of their pension fund investments--they assume the return will be 7 or 8%--which is ridiculous. A very good dividend stock like AT&T has a dividend yield of 5%, and Exxon Mobil pays only 3%. The 10-yr. Treasury bond has a yield of only 1.5%--go to cnnfn.com and check it out. German bonds only pay 1.1%. Mayor Bloomberg is trying to lower the projected return of his city's pension fund but he can't because that would meen a reduction in pension benefits to retirees.
So Melissa--can you find out what PERS officially states as it's projected future return on its pension fund? If they say it's around 7% then ASK them where the ##%%$$!! they got that number because it's impossible to get that kind of return in the stock market.
http://paloalto.patch.com/articles/palo-...
Melissa, I just brought up the PERS investment program sheet on the PERS website--it states that it assumes an 8% overall return on its pension fund investments. If PERS assumes that it can achieve a Bernie Madoff 8% return on its investments then that's the biggest lie in the world. JP Morgan just lost 5 billion in hedge fund trading and it's listed as one of the Wall Street banks in your little prospectus. The pie chart shows 30% investments in US bonds (they currently pay 1.5%) and 40% exposure to stocks (the DOW JONES hasn't budged since 2008). So where does the 8% projected yield come from? The website cheerfully states an average 9% growth since 1984. Well since the Dow Jones hovered under 1000 in that decade, anybody invested in the stock market since 1984 could have achieved those returns. I'd like to know how PERS intends to achieve 8% growth on its pension fund from now on, with half of Europe going bankrupt. Perhaps you and your fellow teachers should ask them.
Where are the details of the pensions of the governors, and state representatives.
If you want to see some real extreme rip off of the tax payers, check how little these people pay in and what they get out.
There is the really rip off of the pension system.
ManUncle,
You talk like you know the stock market, but you don't. Do you even know what a dividend is versus a return? Do you know what a PE ratio is? Do you have a 401k? If so, how much did you lose, because PERS is in the green when you average out the past few years while people like you are down 25%. I feel pretty safe with money in those investors hands. If you say that 8 percent is ridiculous, then you don't have a clue. Can YOU predict the future? That is what your post says, that there is no way to get a 7 percent return. If you know that for fact, you should be typing these posts from your private island. If you think the market is going to tank, then by all means try to short it and see where that gets you. You touched on the fact that some of PERS money is sitting in bonds and not making a high return. Just for your information that is called diversification. If you knew the first thing about investing you would know that. You know, the all your eggs in one basket argument.
And the benefits are not based solely on returns, they are also based on future contributions. That is what keeps PERS solvent.
Could someone at the Las Vegas Sun please explain to me what my "Personal Attck" was that justified my postings removal? Wow!!
ManUncle,
If you were able to acquire PERS's assumed actuarial rate of return of 8% then you should have also been able to acquire the fact that PERS has averaged, over the last 40 plus years, a rate of return on investments of approximately 9%. Proof positive that PERS is a fundamentally and financially sound Defined Benefit Program that other public and private sector programs should model!!
In response to Effective Teacher...if you have 30 years of income from other employment where you DID pay Social Security taxes, you will not have your SS benefit reduced because of PERS. I am currently a public employee in another state - I have 24 years of Social Security working history. I plan to leave public employment early enough to go back to a job in the private sector to earn my other 6 years of social security so I won't be penalized when I collect.
I don't normally post but I will asked all the people that state my tax dollars go for retirement. Now I don't know how long most have lived here including the Sun writer but last time I checked in my 42 years year I have never paid state income taxes. Last time I checked casino gaming and sales taxes are the major taxes in this state. You only pay for nonfood items on sales tax and with and influx of visitors a vast majority of sales tax is by non Nevada residents. So where is all the big deal since state workers pay 50% and the state pays the other 50% which equals to police and fire pay 14.5 percent of there salary and state pays other 14.5, other employees pay 9% and the state pays other 9%. What makes politicians mad is that they cannot touch PERS money because it is the states constitution that it is seperate from other funds and cannot be used for anything except retirement funds. PERS cannot loan money to the state or anybody. Since most have not lived her long enough we got that changed in the early 1980's due to state taking funding to build a dog racetrack in Hooterville (Henderson)that went belly up. Now explain to me where your taxes pay for state govt. other than sales tax and you don't have to buy anything to pay that tax nor vehicles reg. fees. Most of you do not want a state job because it is payed lower than private. I always like the appointed jobs included in your stats because they are not classified employees since appointed jobs are overpaid but here again nothing says I have to buy anything to pay sales tax so I am not jealous. As I tell some of my fellow people I know we all make choices of the jobs we work but you must have chose money over security. Now lets bring up a story the Sun does not want to check. Why was all health insurance cancelled for state employees? They have only Health saving plan now. No medications, no blood work, pay the full amount for office visit, and if they go to the hospital after a 4000 dollars deductable and the state will help you pay the bill less another 25%. Now Sun writer check this out you might be shocked PEBP.
19ray66,
Check your facts and the Federal Statue known as the "Government Pension Offset". If you receive a "Public Pension" and are eligible for SS you will get both, but your SS benefit will be reduced because you get a "Public Pension". It could be reduced as much as 66 2/3% depending on the amount of your "Public Pension".
Below is a reposting of a "Comment removed by moderator" in which the perceived "personal attack" has been edited. Thank you LV Sun!!
Wow!! According to Ms.McNeilly shes concerned about "how the system allows for outrageous pensions that the taxpayers just can't sustain." Really?
I'm concerned about Ms. McNeillys obvious lack of understanding of how the retirement "system" works. Though PERS calculates a members retirement benefit, the benefit itself is initially determined by the salary information the members employer supplies. As for the costs, what Ms. McNeilly and other like minded critics choose to ignore is that the "taxpayers" contribution to a members retirement benefit is between 10-12%. In most cases, except for Police and Firefighters, that is less then the costs would be if Public Employees contributed to Social Security, which Public Employees do not unless they have a second job because they dont make enough at their Public job. The other 88-90% of the members benefit comes from their own contributions, which are mandated by law from their own paycheck, and the investment returns of the total PERS Fund. So you know, over the last 40 or more years PERS has averaged approximately a 9% return on investment even through all the economic downturns we have experienced! The article talks about retirees, and in this case Lon Kruger, getting a 3% bump (Raise) each year. Again if Ms. McNeilly and her group dealt in facts and not hyperbole she'd know that retirees get NO BUMP for the 1st 3 years after they retire and then a 2% "bump" starting in their 4th year of retirement.
"McNeilly said the state retirement board could do more to make policy decisions like that easier. They could drop their appeal and release personal retirement information." Don't know about anyone else but not sure who Ms. McNeilly thinks she or her group is but as far as I'm concerned you have NO RIGHT to my "personal retirement information". According to Ms. McNeilly "That's the big story here is, give us the information,". Why would we and, more importantly, who died and left her in charge??
Have a nice day!
KDallas, 9% ROI over the last 40 years isn't too impressive, since that's the same as the Dow Jones Industrial average. Johnman, if PERS has actually found risk-free investments that will make the pension fund money grow 8% a year (at a time when the 10-yr. govt. Treasury bond pays only 1.5% interest), then a lot of people would like to know how to do that with their state's pension monies--people like Jerry Brown, Mayor Bloomberg, and just about every other governor.
manfromuncle1,
Wew I'll be more explicit.
The critic said that the assumed ROI of 8% PER YEAR was too high to realize (my words) and my reponse was to show that PERS has actually returned approx. 9% PER YEAR, ROI, for over 40 years.
Maybe the others do know but want to turn their heads so as not to recognize that our PERS system is an example of how you can have a Defined benefit plan and it work well!!
It goes against what they may believe in and doesn't fit their political philosophies??
DKallas: Unfortunately, the extremes are edging out other considerations. When a person can work for 20 years in a somewhat cushy "job" and receive six-figure retirement AND health care forever and ever after, it's difficult for many people to not assume that all of PERS is out of whack. We must move quickly to fair and reasonable compensation and retirement. If we could immediately do that we still "owe" the current employees endless benefits unless we have a means of changing ACCRUING BENEFITS.
Roslenda:
If one could work for 20 years at a cushy job and then retire at 6 figures with free health care, it would be out of whack. But none of that happens. First, to get full retirement you have to work for 30 years, second, you get 75% of your average pay, you get subsidized (not free) health coverage in a plan that sucks (currently there is a $2000 annual deducitible). Add to all of that, your contribution to your retirement has gone up over 15% in the past 3 years, and is now almost double what others pay in Social Security tax, any social security you might have earned in other employment gets whacked by the "Windfall Elimination", your earnings have been going down since 2008, 25% of your co-workers have been laid off, (or left to get a job that pays better) so your work load is higher, and the public doesn't appreciate how hard you work for what litte you get and want to take even more of it away. And even though the sales tax rate has gone up, that increase is more than offset by the dramatically lower property taxes on their house.
You were partially right, something is definitely out of whack.
Hank: Think City and County employees. Firefighters. LEOs. And if you would read what I wrote, that all the other government employees are hit with blame for those who have it so financially wonderful....
Roslenda,
Unless 1 of those employees is in upper management or the boss, no one can work for just 20 years and make a 6 figure retirement.
Using the provided (not sure accurate)Kruger figures, Coach Kruger worked at UNLV for 7 years which means he accrued 2.67% of his salary each year for 7 years. That equals a 18.69% benefit for him when he is eligible to retire. If it is accurate that he made $606,000 per year then he would only be entitled to 18.69% of that figure as his retirement benefit, which equals approx $113,241.00 per year. A far cry from the $400,000 something Ms. McNeilly would like you to believe he is eligible to receive.
Some people just don't want the facts getting in the way of their story, regardles of how inacurate they are.
I worked as an LEO for 30 years and I neither make 6 figures nor do I receive Health Care "forever and ever after" unless I continue to pay for it just like I do now and like everyone else does.
People really need to start dealing in facts.
There is always going to be an exception to the standard but the fact is the majority of us are the standard and we only wish we had it as good as some of you believe we do.
Have a nice day!
Try working in a state like Texas where benefits are much lower and there are NO COLA's. Add to this getting the curse of Social Security's Windfall Elimination! If I did the exact same job in Nevada, i would be making more money than I made working, wouldn't have had to pay for six years of college and would be getting raises each and every year! I would take Nevada's retirement in a heartbeat...but wait, look at the education system. Could it be that everything goes to the retirees and Nothing for the kids! Wow! How on earth did this happen? I can't believe that no one seems to notice or care!!!
Shame on YOU, Nevada!