Posts Tagged ‘retirement’

Purchase Of ‘Air Time’ Not Frequent But Some Nevada Lawmakers Want to Review

By Sean Whaley | 2:00 am April 16th, 2012

CARSON CITY – A little-known benefit of Nevada’s public employee pension plan is the right to purchase up to five years of service towards retirement.

Referred to by some as “air time,” or the ability to add years of retirement without actually putting in the time in a public sector job, the benefit can allow state and local government workers to retire early, collecting annual pensions years before they would be eligible otherwise.

A 60-year old state worker with five years in the Public Employees’ Retirement System, could, for example, buy five years of retirement credit and retire right away with a pension worth about 25 percent of salary.

Teachers and many other public employees are in the state pension plan. / Photo by DanielbdaDirector via Wikimedia Commons.

A 50-year-old teacher with 25 years of service could buy five years and retire right away with about 75 percent of salary. Regular public sector workers in Nevada can retire at any age with 30 years of service.

Former Clark County D.A. David Roger a case in point

An example of the use of air timewas reported recently by the Las Vegas Review-Journal concerning former Clark County District Attorney David Roger, who purchased five years of service and retired at age 50 to take another job. According to the newspaper, Roger paid about $330,000 to purchase the five years. He is now eligible for an annual pension of about $150,000 five years before he would be eligible otherwise.

But the cost of purchasing a year of retirement credit is not cheap, and a review of such purchases in Nevada suggests it is not used all that frequently by public employees.

Even so, some state lawmakers say the benefit, along with other aspects of the public pension program in Nevada, are worthy of review in the 2013 legislative session.

The 2011 Legislature approved a study of the public employee retirement system, but a $250,000 private sector donation was required before the review could get under way. The contribution has yet to materialize.

The primary interest for many policy makers, including Gov. Brian Sandoval, is whether Nevada’s public employee pension plan should be changed from a defined benefit plan to a defined contribution plan, similar to a private sector worker’s 401(k), for new public workers going forward.

Air time purchases are offered in many states

Some states make it much less costly for public workers to purchase retirement credits. The ability to buy “air time” was recently highlighted in a news report in USA Today, which found 21 states that allow for such purchases.

Numbers provided by PERS to the Nevada News Bureau shed some light on the use of the benefit.

About $17.2 million was spent on purchase of service in fiscal year 2011, not counting a special program created by the Legislature for teachers who work in at-risk schools. This represents about 1.2 percent of the $1.4 billion in total contributions made to PERS that year from both public employers and employees.

In fiscal year 2010, the number was $13.5 million out of $1.4 billion in total contributions or just under 1 percent.

These amounts may include some purchases of service by a local government in order to encourage workers to retire as a way to save money in the budget.

The Washoe County School District last week, for example, approved 68 early retirement applications to help resolve a $40 million budget shortfall.

The PERS website has a calculator to show what it would cost to buy a year of service. Based on the average salary for all active regular employees of $49,000, it would cost a worker nearly $20,000 to buy one year of service at age 55.

For a police officer or firefighter with an average salary in 2011 of about $74,000, the cost to buy one year of service at age 55 would be nearly $30,000. Public safety employees can retire at any age with 25 years of service.

So dividing these amounts into the $17.2 million in purchase of service in 2011 would equal 860 years of service purchased if all the purchases were by regular employees. For police and fire, the number of years purchased would be about 573 years.

With nearly 100,000 active employees in 2011 and each earning a year of retirement credit for working, the number of purchases appears to be a small piece of the public employee retirement puzzle. The PERS system covers state workers, local government employees and school district personnel across the state.

Air time purchases not that common in Nevada

Dana Bilyeu, executive officer of PERS, said the agency does not collect data by individual on the purchase of service. Even if it did so, pension information about individual retirees has long been considered confidential, although this issue is now before the Nevada Supreme Court.

The Reno Gazette-Journal is seeking individual retirement information and won a court ruling in Carson City District Court in its favor. That ruling has been appealed to the Supreme Court by the PERS board.

But based on anecdotal evidence, Bilyeu said the purchase of service benefit is not used to any great degree of frequency by Nevada public employees.

“You can tell from the numbers that it is not a huge thing for us,” Bilyeu said. “We don’t have a lot of five-year purchases. We usually get purchases of 18 months or a year by an employee to get to 10 years to retire at age 60.”

An employee nearing 30 years of service might purchase a year or half a year to retire a bit early, she said.

The USA Today report said air time is coming under scrutiny as states try to curb retirement spending and make their pension systems resemble private-sector plans. Federal law allows air-time purchases only in government pension plans.

Nevada lawmakers may take up the “air time” issue next year

Assemblyman Randy Kirner, R-Reno, said the $17.2 million in air time purchases in 2011 may not seem large in the context of one year revenue for PERS.

“However, if one were to figure the benefit costs over a lifetime to be paid out, I suspect the resulting math would astound normal citizens who can never hope to have such a staggering benefit,” he said. “So it’s not the $17.2 million but the lifetime cost that’s important to consider. Paying $20,000 or $30,000 per year purchased may be insignificant to the lifetime benefit.

“Bottom line, Assembly Republicans have raised this and other related issues to PERS as potential issue for the 2013 session to address,” Kirner said.

Geoffrey Lawrence, deputy director of policy at the conservative think tank Nevada Policy Research Institute, said his concern with the purchase of service is that employees may not be contributing enough money to cover the cost of the additional retirement benefit.

When years are purchased, PERS assumes it will get an 8 percent return on its money, he said. If that target is not met over the long term, taxpayers could be on the hook to make up any shortfalls, Lawrence said.

“So if you’ve got a bunch of employees buying air time early in their career, and PERS doesn’t get the return that they are assuming, then taxpayers in ensuing years are going to have to make larger contributions into the account to pay back the unfunded liability,” he said. “So this is something that is of concern because it can exacerbate the unfunded liability.”

The PERS plan was 70.2 percent funded as of June 30, 2011.

But Lawrence said he isn’t surprised at the small amount of money going to purchases because most employees probably don’t have $20,000 or more to buy a year of service.

-

Audio clips:

Geoffrey Lawrence of NPRI says taxpayers could be on the hook for air time purchases if the pension plan doesn’t hit its investment target:

041212Lawrence1 :28 the unfunded liability.”

Lawrence says the low use of the program is not surprising:

041212Lawrence2 :15 deal, you know.”

 

 

 

Legislature Votes To Cut Pay To State And University Workers

By Andrew Doughman | 3:54 pm May 10th, 2011

CARSON CITY – Legislators on money committees today approved on a party-line vote a 4.8 percent salary cut to state and higher education employees.

The proposal would include a 2.3 percent cut through furloughs – about six days per year – and a 2.5 percent salary reduction.

Gov. Brian Sandoval had proposed in his budget a 5 percent salary cut to state and higher education workers.

Speaker John Oceguera, D-Las Vegas, advanced the 4.8 percent “compromise” cut. Legislative staff said it would create a shortfall between $7.5 and $10 million in the governor’s budget.

The vote passed with all Democrats voting for the idea and all Republicans voting against it. In an earlier vote, Republicans voted to follow the governor’s recommendation while Democrats voted against it.

Republicans characterized the salary reductions and cuts to benefits as similar to reductions in the private sector.

“What we are seeing here is a continuation of that downsizing,” said Assemblyman Pat Hickey, R-Reno.

Democrats contended that government does not operate like private businesses; rather than seeing less business during a recession, more people depend on state services in a recession.

“If we are going to apply true business principles to government, we should be hiring right now … our demand is way up,” said Assemblyman Marcus Conklin, D-Las Vegas.

Union representatives and higher education faculty testified against the cuts, saying that they much preferred furloughs to salary cuts.

Danny Thompson of the AFL-CIO also said that reductions in the governor’s budget have provoked a grassroots movement that could punish Republicans during next year’s elections.

“I would caution you that if you don’t solve this problem, that organic uprising that has already happened is going to spread and the people are going to solve this problem,” Thompson said.

Legislators also voted to continue suspending merit and longevity pay as well as eliminating holiday premium pay for higher education and state workers. Legislative staff said that these decisions should save the state $71.5 million.

Yesterday, legislators voted to curtail health care benefits for public sector employees.

Public sector employee union representatives said they have already endured these reductions in pay and benefits for several years as Nevada has struggled through the recession.

“It is so totally unfair what we are doing to our state government,” said Jan Gilbert of the Progressive Leadership Alliance of Nevada.

The governor has earlier argued that furlough days resulted in less productivity from employees, causing longer lines at places such as the DMV.

None of the votes are binding, and the Legislature may decide to alter the proposals as they finalize the budget.

Legislative committees last week voted not to reduce pay for school district employees nor did they choose to suspend merit pay for school district employees.

Those decisions could cost the state $402 million during the next two years.

Democrats last week proposed a revenue package totaling about $1.2 billion comprising a continuation of taxes approved by the 2009 Legislature and scheduled to end this year as well as a tax on businesses’ gross revenue and a sales tax on some services.

If passed, these tax increases could pay for that $402 million cost.

Senate Majority Leader Steven Horsford, D-Las Vegas, also noted a potential budget consequence in cutting salaries. He said that the sustained compensation cuts could lead some state workers to favor retirement over working for less.

Dana Bilyeu of the Public Employees’ Retirement System estimated that 2,000 current state employees are eligible to collect full retirement benefits.

Should they choose to retire, the state would have an unfunded obligation to cash out those retiring employees for accrued sick leave, she said.

Bilyeu and others in the committee room could not estimate a cost, but she said about 1,000 more teachers than usual retired due to changes in benefits following the 2007 legislative session, causing the state to lose millions of dollars.

 

 

 

Assembly Panel Hears Bill Seeking Modest Reforms To Public Employee Retirement Plan

By Sean Whaley | 11:50 am April 13th, 2011

CARSON CITY – The Nevada Legislature finally took up the issue of reforms to the state’s public employee retirement system today, but the proposed changes from Democratic Assembly Speaker John Oceguera are modest.

Oceguera spoke in support of Assembly Bill 405, which would eliminate call-back pay as a form of compensation used to compute retirement benefits for new government workers hired starting Jan. 1, 2012. Call-back pay is used when certain police officers or fire fighters are called back to work in an emergency.

It also proposes that the Legislature make no changes in benefits to the Public Employees’ Retirement System (PERS) for 10 years unless necessary to maintain the financial integrity of the plan. After 10 years, the Legislature would not enact any benefit increases unless the system’s long-term unfunded liability was at least 85 percent funded.

The plan is currently 70.5 percent funded.

Oceguera said his changes would bring down the liabilities of the plan while increasing the predictability of the system, which covers virtually all state and local government employees in Nevada.

Oceguera said the Legislature made major changes to the PERS plan in 2009, and those changes need time to take effect. The 10-year moratorium on any changes would allow the system to assess how those reforms are affecting the long-term liability, which stood at $10 billion on June 30, 2010.

Local government and business representatives supported the proposed changes, while some public employee labor groups spoke in opposition. The panel did not take immediate action on the bill, which faces a Friday deadline for passage.

Gov. Brian Sandoval has advocated for a major change to the retirement system to begin work on reducing the unfunded liability of the plan, but he did not introduce a bill this session addressing the issue.

Heidi Gansert, chief of staff to Sandoval, said the administration would participate in a debate on reforms to the retirement plan as bills dealing with the system came up for hearing, but no one from the governor’s office testified on AB405.

Supporting the bill were Ted Olivas, representing the city of Las Vegas, and Tray Abney, with the Reno-Sparks Chamber of Commerce.

Ron Cuzze, representing the Nevada State Law Enforcement Officers’ Association and the Nevada Association of Public Safety Officers, spoke in opposition to the measure, saying the proposed change to call-back pay is a “knee-jerk reaction” to a “group of individuals” in the public employee system that defrauded the taxpayers.

Cuzze was referring to allegations of sick leave abuse by some Clark County fire fighters.

Rusty McAllister, representing the Professional Fire Fighters of Nevada, said the proposed changes in the bill are modest, but that no reforms should be advanced without a discussion of Nevada’s revenue system.

The changes to PERS agreed to in 2009 were made in exchange for the temporary tax increase approved by lawmakers to help fund the current two-year budget, he said.

“We traded, if you will, permanent changes to the PERS and the collective bargaining system for temporary changes in the revenue structure in the state,” McAllister said. “And certainly, we would hope that if this is going to move forward, that this could again be part of a discussion, but part of a discussion as a permanent fix to the revenue stream and not just continuing to pile permanent fixes on the public employees while we have temporary fixes to our problems.”

Sandoval has repeatedly rejected any call for new taxes or fees to balance his $5.8 billion general fund budget.

Dana Bilyeu, executive officer for the retirement system, said her board has not yet taken a position on the bill. Staff will recommend a neutral position on the benefit change, and an endorsement of the legislative pledge for no benefit modifications for 10 years. The proposal mirrors the system board’s funding policy in effect now, she said.

Audio clips:

Assembly Speaker John Oceguera says major reforms to the public employee retirement system were approved in 2009:

041311Oceguera1 :11 is significant change.”

Ron Cuzze, representing Nevada law enforcement, says the change in call-back pay is a knee-jerk reaction:

041311Cuzze :25 doesn’t make sense.”

Rusty McAllister, representing Nevada fire fighters, says further PERS reforms should only be made in exchange for dealing with the state’s revenue problems:

041311McAllister :29 to our problems.”

 

Sen. Raggio Announces Retirement From Senate

By Andrew Doughman | 11:24 am January 5th, 2011

State Sen. Bill Raggio, R-Reno, announced his retirement today, ending a 38-year career in the state Senate.

The abrupt announcement came this morning when Raggio released a statement making his resignation effective Jan. 15, 2011, citing mobility problems as the chief reason for his retirement. He said the time has come for him to “step aside” and make way for someone “who can give the position a 100 percent effort.”

I am extremely honored and privileged to have been allowed to serve in public office for more than 56 years,” he said. “To the citizens of Washoe County, I extend my sincere gratitude for your support for so many years.”

Since the longest-serving state senator in Nevada history is in the middle of his 10th term, the Board of Commissioners of Washoe County will now have to appoint a successor to fill his position.

In a phone interview, Raggio said he is very comfortable with his decision to retire.

It’s the right decision,” he said. “I tried to make it as low-key and uneventful as possible. I didn’t want to interfere with the governor’s inauguration.”

Raggio said he has a severed Achilles tendon that has limited his ability to be 100 percent functional.

I spent 18 years (in the Washoe County District Attorney’s Office) and 38 years in the Senate,” he said. “That’s a long ride.”

Raggio said he would not presume to dictate who should be picked for his replacement, only that it not be someone with a “radical” political agenda.

I would like it to be someone who shares my political ideas and who will work across party lines,” he said.

After Raggio made his announcement, other prominent Nevada politicians were quick to deliver appreciative words. Some even Tweeted their thanks to the senator for his service.

Assembly Speaker-elect John Oceguera, D-Las Vegas, praised the senator’s commitment to “do the right thing for our state,” but also mentioned the split Northern and Southern Nevada politics in a statement released earlier today.

Certainly he was an advocate for Northern Nevada, but his mastery of the budget and the legislative process was a steadying influence which served Southern Nevada as well,” Oceguera said.

As the politicians in D.C. enter their session, U.S. Congressman Dean Heller, R-NV, took the time to release the following: “Bill Raggio has served Nevada with distinction and honor. I have known Bill for many years and have seen firsthand his dedication to our great state. His sudden departure is unfortunate and I wish him well. Senator Raggio’s presence in the State Legislature will be sorely missed.”

Governor Brian Sandoval, a fellow Republican who called Raggio “a mentor” and “the father figure in the Legislature,” said he called Raggio immediately after the announcement.

“If the state of Nevada had a Mt. Rushmore for public servants, Bill Raggio’s image would be etched on its face,” Sandoval said.

Raggio made his announcement Jan. 5 in hopes that the board will have adequate time to make an appointment before the legislative session starts Feb. 7.

The senator’s retirement marks the end of an era for Nevada state politics. For decades, Raggio led the state Senate as majority leader or minority leader until this past year, when the 10-member GOP Senate caucus unanimously supported Sen. Mike McGinness, R-Fallon, as minority leader.

This leadership shake-up came a month after Raggio endorsed U.S. Sen. Harry Reid in his re-election campaign against GOP challenger Sharron Angle. Despite the upset, Raggio finishes his career with a long list of accomplishments. While most state senators can brag of a few accomplishments, Raggio’s biography on Nevada’s legislative website has several pages of achievements.

Although he is retiring from the Senate, Raggio intends to stay active in his law firm, Jones Vargas.

  • Read Raggio’s letter to the Board of Commissioners of Washoe County here.
  • Read Raggio’s letter of resignation here.

Nevada Public Employee Retirement Contributions To Increase, Unfunded Liability Climbs To $10 Billion

By Sean Whaley | 12:57 pm November 10th, 2010

CARSON CITY – Nevada’s public employee retirement system will require increased contributions from the state and local governments next year to maintain the long-term financial health of the defined benefit plan, the board overseeing the program was told today.

The contribution rate for regular employees will have to increase by 2.25 percentage points to 23.75 percent in the coming two years. The retirement system covers 103,000 active public employees, including state workers, teachers and local government employees.

Police and fire fighters will also see an increased contribution rate of 2.75 percentage points to 39.75 percent. This group of workers is evaluated separately.

The increases, recommended by an independent consulting actuary, were adopted by the Public Employees Retirement System Board and forwarded to the state budget director and Legislature.

The 2011 Legislature will be asked to fund the increased retirement costs. Lawmakers in past sessions have fully funded the contribution rates recommended by the actuary and the retirement board.

The increases will be shared by employees and employers. Regular state employees who pay half of the total contribution will see 11.875 percent of their salary go to their retirement starting July 1, 2011, up from the 10.75 percent now.

The increase will mean a slight salary reduction for state workers at a time when cost-of-living increases have been eliminated and unpaid furloughs implemented because of the state’s dire budget situation. These cost-cutting measures are expected to continue in the next two-year budget.

The amounts paid by school district and government employers and their employees depend on the results of collective bargaining negotiations. A 50-50 employee-employer match is required, but local governments have in the past paid a bigger share of the contributions in lieu of salary increases. State employees do not have the right to collective bargaining.

Dana Bilyeu, executive officer of PERS, said the actual cost of the increase to the state and state employees will be $8.7 million each in fiscal year 2012 and 2013 based on estimates by her agency. This compares to an annual $9.3 billion state budget in 2010 when all funds are included, she said.

For the entire system statewide, the cost of funding the program equates to 2.4 percent for public employers and another 2.4 percent for public employees based on total public government budgets of $27 billion, Bilyeu said.

Claims that public employee pension costs are going to sink government budgets are exaggerated, she said.

The PERS board was also told, however, that the long-term unfunded liability of the state public pension plan grew in the fiscal year that ended June 30, to $10 billion from $9.1 billion as of June 30, 2009.

The plan was 70.5 percent fully funded on June 30, 2010, down from 72.5 percent in the previous year. At its high point in 2000 the plan was 85 percent funded.

These long-term unfunded liabilities of the PERS plan and for public employee pension plans nationwide are generating concern from policy makers.

Nevada Gov.-elect Brian Sandoval said today he remains convinced the PERS system needs to change from a “defined benefit” plan where retirement payments are guaranteed based on salary and years worked, to a “defined contribution plan” where public employers contribute to employee retirement without any guarantees of pension amounts upon retirement.

Such a change would eliminate the unfunded liability for future hires. There is a current legal prohibition for changing the plan for workers currently in the system.

A report on a shift to a defined contribution plan for future hires will be presented to the PERS board in December.

Bilyeu is not advocating such a change to the board or to the Legislature but recommended the analysis to provide the information to lawmakers and the governor.

Not all elected officials are convinced Nevada’s public pension plan needs such a change.

Lawmakers in 2009 did make some changes to the PERS system to control costs, including raising the retirement age for new employees to 62 from 60.

But there is a growing chorus of critics who say more drastic changes are needed to reign in pension costs or government entities will soon face bills they cannot pay.

A study of state and local government pension funds by the Pew Center on the States released in February identified Nevada as one of 19 states where “serious concerns” exist about the long-term health of the retirement plan.

Geoffrey Lawrence, a fiscal policy analyst with the Nevada Policy Research Institute, said in an article this week that PERS officials are understating the implications of the unfunded liability.

“In the event that PERS’ assets become insufficient to make the promised benefits payments to retirees, the shortfall would almost certainly be filled using tax dollars,” he said.

Lawrence noted that between fiscal year 2000 and fiscal year 2009, PERS’ unfunded liability nearly quadrupled, growing from $2.3 billion to $9.1 billion.

“Moreover, as NPRI has noted, even this amount is dramatically understated because PERS accounting methods fail to consider the price of risk or instability in the marketplace,” he said. “PERS administrators assume that, like clockwork, they will be able to realize an 8 percent annual return with zero risk in the portfolio.”

Bilyeu said the PERS investments do assume an annual rate of return over time of 8 percent. The plan has averaged a 9.3 percent rate of return over the past 25 years, she said. The 8 percent rate of return on investments assumption will be evaluated in 2012.

Bilyeu acknowledged the concerns over the solvency of public employee retirement plans nationwide, but said Nevada’s plan has been regularly funded based on the independent actuarial valuation performed every two years.

Pension funding concerns are legitimate for those plans that are not fully funded every year based on actuarial analyses, such as those in Illinois, New Jersey and some other states, she said.

Nevada Public Employee Pension Investment Return Exceeds Short Term Target But Unfunded Liability Still Growing

By Sean Whaley | 1:13 pm September 2nd, 2010

(Corrected at 2:34 p.m. on Sept. 2, 1010 to reflect average monthly benefit paid to retirees.)

CARSON CITY – Nevada’s public employee pension system earned a rate of return above its 8 percent target last fiscal year, but the long-term unfunded liability is still expected to see an increase when an analysis is presented this fall.

Dana Bilyeu, executive officer of the Public Employees’ Retirement System (PERS), said the retirement board was pleased to learn earlier this month that the return on the plan’s investment hit 10.8 percent for the fiscal year 2010 that ended June 30. This is above the plan’s assumption of an 8 percent return over time, which the PERS plan has achieved.

But the PERS portfolio, a mix of stocks, bonds and other investments worth $22 billion as of June 30, is still accounting for the 15.8 percent loss in the 2009 fiscal year, she said.

The plan, which covers more than 105,000 active state and local employees, including teachers, was 72.5 percent fully funded as of the end of the 2009 fiscal year, down from a high of 85 percent in 2000. The unfunded liability totaled $9.1 billion last year.

Bilyeu said she expects to see that unfunded liability increase a bit when the system’s actuary provides the 2010 data this fall because of the 2009 loss.

The long-term liabilities of public pension plans have become a concern nationwide, with some states doing a much worse job of funding their plans than others. One national study identified Nevada as one of 21 states struggling with funded liabilities of less than 80 percent in 2008.

Some national studies using a different method of calculation suggest the pension plans, including Nevada’s, are unfunded to a much greater degree than what is being officially reported.

Bilyeu said Nevada’s plan is funded based on projections by an independent actuary that must be used by the retirement board. There is a likelihood that the contribution rates will have to go up by 1 or 2 percentage points in the next biennium to ensure the continued solvency of the plan over a 30-year time frame, she said.

The plan is currently funded at a 21.5 percent contribution rate for regular employees, with government entities and employees sharing the cost. The contribution rate for police and fire fighters is higher.

Nevada’s plan has always been funded each year by the amounts set by its actuary, a requirement in the state constitution, Bilyeu said. While other states have employed various mechanisms to avoid making contributions to their plans, that has not been the case in Nevada, she said.

The most recent national attention on the public pension issue has come from New Jersey, where the U.S. Securities Exchange Commission accused state officials of fraud for saying they were properly funding the state’s pension plan when they were not. The matter was settled with a cease and desist order and no penalties were imposed.

But Geoffrey Lawrence, a fiscal policy analyst for the Nevada Policy Research Institute, said Nevada policymakers still must address the challenge of the long-term unfunded liability.

In a recent column about the New Jersey situation, he said: “The Nevada Legislature has, to the present, faithfully contributed tax dollars into the Nevada Public Employees’ Retirement System (PERS). However, PERS liabilities over the past decade have well outpaced the system’s assets, given the continued rise in public employee wages and retiree benefits based on those wages.”

Until public employee pay and the retiree benefits based on that pay are brought under control, or until lawmakers move to a rational, defined-contribution retirement plan, the state’s creditworthiness will continue to erode in direct proportion to its growing pension liabilities, Lawrence said.

The PERS popular annual financial report for fiscal year 2009 indicates that the average benefit payment for a regular employee was $2,428 a month, compared to $1,626 in 2000. The average retirement age was 61.

Bilyeu said the state retirement system is doing a cost study of converting to a defined contribution plan, where employees receive a set amount of money to invest each year, versus the current defined benefit plan, where employees are guaranteed a pension amount based on salary and years of service. The information will be presented to the board in the fall and forwarded to the governor and Legislature for their consideration, she said. The PERS board is not advocating for such a change.

Any such change would not apply to current employees vested in the plan, only to future hires.

GOP governor candidate Brian Sandoval has endorsed the idea of switching to a defined contribution plan. Democrat Rory Reid has not offered a position, saying concerns about the plan’s fiscal health must be studied first.

Las Vegas Chamber of Commerce President Matt Crosson said in an interview August 12 the Nevada business community will not accept tax increases in the upcoming 2011 legislative session without “meaningful” reforms in a number of areas including public employee benefits.

Steve Hill, chairman of the chamber’s state policy task force, said there are several options to solving the public pension issue for new employees going forward, among them: moving to a defined contribution plan; making significant changes to the existing plan regarding retirement ages and other factors to reduce benefits; and making social security part of the public employee retirement plan.

Nevada is one of only seven states that does not have its public employees in the social security system, meaning the state is liable for the entire retirement benefit package, he said.

But whatever the solution, it needs to be a long-term, permanent fix in 2011 that is fair to employees but is also rational and sustainable for taxpayers, Hill said. The chamber also believes the state should end the program of subsidizing health care for retired state employees starting with new workers, he said.

Fundamental changes won’t eliminate the current unfunded retirement system liability but they will stop it from getting worse, Hill said.

The good news is that legislative leadership is in discussions on how best to make the necessary reforms to employee benefits, he said.

“All of the leadership, and regardless of party and regardless of which house, are looking at this, these situations, and realize that something really needs to be done,” Hill said.

Audio clips:

Steve Hill of the Las Vegas Chamber says the Legislature needs to fine a fair but permanent fix to the public employee benefits issues next session:

083110Hill1 :21 ourselves into again.”

Hill says the employee benefits issues should be addressed so the solutions are sustainable over the long term:

083110Hill2 :35 a sustainable program.”

Hills says legislative leadership is working on solutions:

083110Hill3 :14 to be done.”

Secretary of State Reaches Agreement With Candidate Who Used Campaign Funds Improperly

By Sean Whaley | 7:06 pm April 16th, 2010

CARSON CITY – Las Vegas Assemblywoman Kathy McClain and Secretary of State Ross Miller reached an agreement today resolving  a complaint that she inappropriately used campaign funds to pay for her Clark County retirement contributions while serving as a lawmaker.

McClain, D-Las Vegas, agreed to make a $7,276 personal contribution to Safe Nest, a Las Vegas nonprofit supporting abused women, to cover the cost of the contribution she had made in 2009 to the Public Employees Retirement System from her campaign fund.

McClain, who is running for an open state Senate seat, said she believed all along the use of her campaign fund for such a purpose was proper, and she disclosed the payment on her contribution and expense report.

“I’ve always taken full responsibility for my actions” she said. “I have consistently been open and forthright in reporting those actions. I’m pleased that the Secretary of State determined that there is ‘no evidence that . . . payments were made in bad faith.”

McClain disagrees with Miller’s view that the use of her campaign fund to pay retirement contributions is not allowable.

Miller has concluded such payments are a personal obligation and not related to service in the state Legislature. In a press release announcing the agreement, Miller said his view could be sustained at a trial despite her attorney’s views to the contrary.

Miller said the agreement will bring the issue to a close without incurring additional expense to the state.

Other expenses questioned in the review were not directly addressed in the announcement from Miller. McClain said the issues of health insurance and rent were deemed to be allowable. There was no mention in the agreement of a $5,002 payment to the PERS system in August 2005.

McClain, who retired from her Clark County job in January, said the donation will remove any suggestion she personally benefited from her campaign fund. McClain said she would also like to work to clarify the law to provide better guidance to elected officials.

Secretary of State Broadens Inquiry Into Use of Campaign Funds by State Lawmaker

By Sean Whaley | 7:48 am March 12th, 2010

(Updated at 10:52 a.m. on March 15, 2010)

CARSON CITY – An inquiry into the use of campaign funds by Assemblywoman Kathy McClain in 2009 to pay her Clark County retirement contributions while serving as a lawmaker has been expanded to include additional expenditures as well.

In a letter sent Thursday to McClain’s attorney, the Nevada Secretary of State’s Office has expanded the inquiry to include use of campaign funds dating back to 2005.

The letter was sent to Las Vegas attorney Todd Bice seeking an explanation of the use of the campaign funds.

In a statement Friday, McClain said she believes the expenditures that have been called into question are proper but that she is cooperating with the secretary of state’s office to resolve any questions.

“Every expense was fully disclosed and reported and I believe legally proper,” she said. “I always have and will continue to make full disclosure of all expenditures. I am cooperating with the secretary of state. I will follow their direction to resolve this issue and ensure everything is in proper order.”

The initial inquiry focused only on 2009, when McClain used about $7,276 of her campaign fund to pay her Public Employee Retirement System contribution while on leave from her Clark County job to serve in the Legislature. The inquiry was made by the Secretary of State’s office after a complaint was filed by Mary Hines, a resident of Assembly District 18 represented by Assemblyman Mark Manend0, D-Las Vegas. Hines is not a resident of McClain’s district has had been previously reported. Both McClain and Manendo have filed as Democrats in the Senate 7 seat being vacated by Sen. Terry Care, D-Las Vegas, due to term limits. Both McClain and Manendo are termed out in the Assembly as well.

Pam duPré, press secretary for Secretary of State Ross Miller, said the letter is seeking information about several other expenditures from McClain’s campaign fund over the past five years.

They include: a $5,002 payment to the PERS system in August 2005; a $1,900 payment to Clark County Risk Management in February 2007; a $4,436 payment to PERS in May 2007; and a $1,945 payment to Clark County Risk Management in February 2009. The payments were reported on McClain’s contribution and expense reports filed with the office.

These expenditures are in addition to the questions regarding a $7,276 payment to PERS in July 2009, and a $4,250 payment for rent while living in Carson City dating from February 2009, that were cited in the complaint received by the Secretary of State’s office.

The letter asks for an explanation about the use of the funds in each case.

DuPré said a meeting with McClain or her attorney is expected to be conducted this week.