Nevada Supreme Court rules against judge on retirement benefits

CARSON CITY - Clark County District Judge Doug Smith cannot receive public employee retirement benefits until he retires from the judiciary, the Supreme Court decided Thursday.

In a 4-3 decision, the court reversed a lower court decision that found Smith could collect retirement on the 23 years he worked in other public jobs before he became a district judge in 2009.

The Public Employees Retirement System had challenged the decision that Smith would earn $160,000 a year judge salary and at the same time collect a pension for the years he worked as a public defender, prosecutor and justice of peace.

Employees pay a share of their salaries into the PERS system for the latter jobs. District judges, however, pay into the Judicial Retirement System, administered by PERS.

After being elected a judge in November 2008, Smith waited until three days after taking the oath of office the following January to file papers to retire from PERS. PERS ruled he could not retire from his regular public employee job after he was already employed in another PERS-eligible position.

During a hearing before the PERS board, Smith argued the denial over being three days late in his retirement paper work was unduly harsh. PERS ruled that paying him early retirement benefits without him taking a break in his public employee service violated Internal Revenue Service rules. PERS’ potential liability to him at the time was estimated at more the $1 million. Those funds were transmitted to his Judicial Retirement System account.

In a complicated decision written by Chief Justice Kris Pickering, the majority of the court found PERS was correct in denying him the right to collect retirement benefits now. They also said Smith had wanted PERS to change his retirement date from his earlier job so he could collect retirement benefits and still work as a judge. They said he is not losing any benefits by PERS’s decision.

In a dissent, Justice Mark Gibbons said that PERS has power under state law to grant equitable relief to PERS members who make “inadvertent mistakes.” Gibbons said Smith should have submitted his retirement letter from his earlier jobs before Jan. 5, 2009, but could not do that quickly because his retirement application needed a notarized signature from his wife agreeing to the change.

“There was a delay in obtaining this notarization,” Gibbons wrote.

Justice James Hardesty, who voted against Smith, had chastised a PERS lawyer in the oral argument hearing for the case in 2011 for suggesting Smith was trying to double dip.

He said there was “nothing sinister” about Smith’s actions, and he would have collected retirement if he had correctly filed out paperwork.