EDITORIAL: Nevada’s PERS clock strikes midnight

Las Vegas police officers are considering an illegal strike over a compensation increase. Such is the result of union opposition to reforming Nevada’s broken Public Employees’ Retirement System.

This month, the Las Vegas Police Protective Association sent an email to its members about their pension plan. The Metropolitan Police Department participates in the PERS program. It provides retirees with a guaranteed yearly income for life once they retire. Those benefits can be extremely lucrative.

According to Controller Andy Matthews’ Nevada Open Finance Portal, more than 100 retirees collected at least $200,000 last fiscal year. More than 5,000 received more than $100,000. That number has grown substantially. In 2013, slightly more than 1,000 individuals cashed in a yearly pension worth more than $100,000.

In 2019, Democrats in Carson City passed a bill that shielded information about the work history of those retirees. It’s still possible, however, to identify some retired police officers receiving six-figure payouts. That group includes Gov. Joe Lombardo, whose pension was more than $192,000. Current Sheriff Kevin McMahill’s pension topped $217,000.

Pointing out the obvious doesn’t denigrate the service of police officers, who have thankless jobs and put their lives in jeopardy on a daily basis to protect and serve. But those pensions cost a lot of money. In theory, PERS contributions and investment earnings would cover the cost of each cohort’s pension payouts. But they don’t — and haven’t for decades. At the end of fiscal 2024, the system’s unfunded liability topped $20 billion. Its funded ratio was around 75 percent.

To pay down this debt, PERS is increasing contribution rates. For police and fire employees, the amount is jumping from 50 percent to 58.75 percent. Employers — read: taxpayers — and employees split the contribution rate increases equally.

This isn’t a new plan. In 2023, police and fire contribution rates went from 44 percent to 50 percent. They should have gone even higher, but PERS spread out the rate increases. This was likely done to avoid political fallout.

Now the blowback is here. The police union is furious that its members will see a decrease in take-home pay, even after accounting for a 2.6 cost-of-living increase. But officers’ total compensation is actually increasing. Local governments have to increase their pension contributions, too. As a result, governments have less money to boost take-home pay.

The union email included a poll asking whether police officers wanted to conduct a strike or sickout. Either is illegal under Nevada law. The Clark County Commission should be ready to go to court to stop this scheme if it goes further.

Police officers and other public employees upset about these contribution rate increases should ask hard questions of their union leaders. Watchdogs have long called for a substantial overhaul of PERS to avoid this type of situation and to put the system on more stable financial footing. Aside from modest reforms in 2015, union leaders have successfully made it verboten to give the system the overhaul it desperately needs.

If public employees are upset about reductions in take-home pay, they should strike — against their union representatives.