Retirement fund ruling reversed

A decision this week by the Nevada Supreme Court will cost the Metropolitan Police Department about $500,000 a year, a department official said Friday.

The estimate came a day after the court issued a decision affecting the health insurance policies of many local government retirees. In its decision, the court reversed a lower court ruling and said the Police Department must pay a subsidy to a state plan for its retirees.

Liesl Freedman, the department's general counsel, and Chris Collins, executive director of the Las Vegas Police Protective Association, both expressed disappointment Friday with the outcome of the case.

"We brought this lawsuit because we didn't feel we had any authority to spend the taxpayers' money in this manner," Freedman said.

The high court's 31-page decision overturned a decision by District Judge Mark Denton, who had sided with the Police Department in holding that it did not have to pay the subsidy.

Had Denton's decision been upheld, about 150 Las Vegas police retirees could have been forced out of the state's Public Employees Benefit Program. Also, upholding Denton's decision would have affected organizations not involved in the lawsuit, including the Clark County School District, which has about 1,900 teacher retirees enrolled in the state plan.

Leslie Johnstone, chief of the state program, had said that without the high court's reversal, more than 3,000 local government retirees would be forced to seek more costly alternatives for health care coverage.

The Police Department now owes about $1.2 million through March 31 for 150 retired participants, based on a subsidy cost of about $35,000 a month for the group.

Freedman said department officials probably will meet in the next week or two to figure out how to come up with the money. "It's an unbudgeted liability," she said.

Freedman said the decision is expected to cost the department about $500,000 a year and eventually could cost as much as $650,000 annually.

"We have heard they're going to increase the subsidy up to 30 percent," she said.

Freedman said something will have to be cut from the department's $500 million budget.

"It's unlikely it would be officers," she said.

But Collins said the subsidy money would be better spent on equipment or the hiring of more officers.

"That's five police officers every year that aren't being hired," he said.

Collins noted that the police union established a post-retirement trust in 2002. Officers pay $75 a month into the trust and receive a $350 tax-free benefit each month after retirement for use on medical expenses.

"In essence, the Supreme Court told Metro that they have to pay for something that has already been established," he said.

The Associated Press contributed to this report. Contact reporter Carri Geer Thevenot at cgeer@reviewjournal.com or (702) 383-0264.