Legislators approve PERS reform

CARSON CITY — A bill that saves the state millions of dollars by cutting public employee retirement and health care benefits won approval tonight on votes of 19-2 in the Senate and 41-0 in the Assembly.

Both houses moved quickly to pass amended Senate Bill 427. Republican leaders insisted it pass before any members of their party vote to override Gov. Jim Gibbons’ vetoes of bills increasing taxes by $781 million, which were issued earlier today.

During hearings on SB427, both Republican and Democrats said benefit reductions were necessary to guarantee the continued solvency of the Public Employees Retirement System and the Public Employees Benefits Program.

The spending reforms will not affect benefits to existing public employees — only those hired after next Jan. 1.

Gov. Jim Gibbons is not expected to veto the bill, which contains reforms similar to those advocated by his Spending and Government Efficiency (SAGE) Commission.

While backing the bill, Senate Majority Leader Steven Horsford, D-Las Vegas, expressed concern that the benefit reductions will cause younger people to avoid choosing careers in public service.

“The processes in this bill are a major shift for new employees going forward,” Horsford said.

But Sen. Warren Hardy, R-Las Vegas, said the reductions are necessary to ensure the solvency of the programs.

“We are helping to ensure these program will be here for a long time,” added Hardy. Dana Bilyeu, the Public Employees Retirement System executive officer, said she has no figures yet on the savings her agency will receive from the change.

The passed bill as it affects PERS is varies only slightly from one discussed last week in a Senate committee.

Bilyeu estimated then that the bill would save PERS about $142 million a year in coming years.

The biggest changes to the retirement system affects police officers and firefighters. Under the terms of the reform, they would have to work 30 years, the same as other public employees, before they could retire at any age and receive full benefits. Under the current law, they could retire at any age and receive full benefits after working 25 years.

All future public employees who retire early also will be docked 6 percent of their retirement pay for each year they retire early. Current employees are cut only 4 percent a year. The reform plan reduces health care and retirement benefits for future public employees. It also requires local governments to approve or reject any collective bargaining agreements during public meetings.

The chief executive officer of the local government also must report on the fiscal impact of the agreements.

Senate Minority Leader Bill Raggio, R-Reno, insisted on the reforms to collective bargaining, PERS and health care benefits before his party would vote to override Gibbons’ vetoes.

Last week, he also demanded that no public employee should receive any retirement benefits before age 62, the same as in private industry. But that demand was not found in the passed reform bill.

Raggio called the reforms in SB427 “a good step forward” that won’t penalize existing employees.

Without the benefit changes, he said the state of Nevada and its PERS system would be in the same position as the federal government is now in with Social Security — facing insolvency.

Sen. Bob Coffin, D-Las Vegas, voted against the bill. He said he was concerned that the higher education system of Nevada won’t be able to hire star professors because of changes in health care benefits.

Under the reforms, professors and all state employees and teachers would have to work a minimum of 15 years with the state to acquire a monthly subsidy when they retire. This subsidy, from $396 a month to $696 a month, can be used by retirees to purchase health care insurance.

Previously, the law allowed partial subsidies when employees work as little as five years, a feature that Coffin said universities used to attract quality professors. Sen. Maggie Carlton, D-Las Vegas, also voted against the bill.

“I was brought up to raise up the next generation,” said Carlton, explaining she did not want to cut benefits to future employees.

Hardy said Nevada is the only state in the union to offer any subsides to help retirees buy health care polices.

Even with the changes, he said Nevada still offers the most generous retirement package in the nation.

“I feel what we did was in the best interest of the state of Nevada,” added Hardy.

Coffin still refused to support the bill.

“We have cut everybody’s pay,” he said. “We have cut everybody’s benefits. There is nothing to be proud of.”

Contact reporter Ed Vogel at evogel@reviewjournal.com or 775-687-3901.

PREVIOUSLY: Senate passes PERS reform on 19-2 vote

CARSON CITY — The Senate passed proposed reforms to the Nevada Public Employee Retirement System in a 19-2 vote.

The bill will now go to the Assembly.

The proposed changes, which would affect public employees hired after Jan. 1, 2010, include:

— All employees can retire at any age after working 30 years on the job and receive full retirement benefits.

— Regular employees who work 20 years can’t retire and receive 50 percent of full benefits before age 60.

— Police and firefighters who work 20 years can’t retire and receive 50 percent of full benefits before age 55.

— Regular employees can’t retire after working 10 years and receive 25 percent of full benefits before age 62.

— Police and firefighters can’t retire after working 10 years and receive 25 percent of full benefits before age 60.

— Their retirement pay is cut 6 percent for each year they retire early.

— The health care benefit deductible paid by an individual increases to $725.

— The health care benefit deductible paid by a family increases to $1,450.

— To acquire a retirement subsidy, state employees hired after Jan. 1 would have to work as long as 15 years for the state.

— Premiums paid by the state for health care programs for employees would be reduced by 5 percent.

PREVIOUSLY: 7:38 P.M.: Senate committee OKs bill to cut public employee benefits

CARSON CITY — On a 6-1 vote, the Senate Finance Committee approved a bill that reduces retirement and health care benefits for public employees hired after Jan. 1.

Both Republican and Democratic members of the committee said the reductions were necessary to guarantee the continued solvency of the Public Employees Retirement System and the Public Employees Benefits Program.

Senate Majority Leader Steven Horsford, D-Las Vegas, said following the meeting that the entire Senate tonight will vote on Senate Bill 427.

“The processes in this bill are a major shift for new employees going forward,” added Horsford, who expressed concern about whether young people will choose careers in public service with the lower benefits.

Dana Bilyeu, the PERS executive officer, said she has no figures yet on the savings her agency will see from the change.

But the passed bill as it affects PERS is little different than one discussed last week in the committee. Bilyeu had estimated that bill would save PERS about $142 million a year in coming years.

The biggest retirement change affects police officers and firefighters hired after Jan. 1. Now they can retire at any age and receive full benefits after working 25 years. SB427 requires them to work 30 years, the same as other public employees, before they can retire and receive full benefits.

Future employees who retire early also will be docked 6 percent of their retirement pay for each year they retire early. The current cut is 4 percent a year.

Senate Minority Leader Bill Raggio, R-Reno, had insisted last week that no public employee should receive any retirement benefits before age 62, the same as in private industry.

But that demand was not in the passed in the reform bill. Following the Finance Committee meeting, Raggio called the reforms “a good step forward” that do not penalize existing employees.

Without the benefit changes, he said the state of Nevada would be in the same shape with PERS as the federal government is with the Social Security system — facing insolvency.

Sen. Bob Coffin, D-Las Vegas, voted against the bill. He said he was concerned that the higher education system won’t be able to hire star professors because of changes in health care benefits.