Shining a light on pension benefits

Last week, pension reform died in the Nevada Legislature.

This week, the cause gets new life in Carson City — not before lawmakers, but in front of the Nevada Supreme Court in the state’s most important public records case in years.

Assemblyman Randy Kirner, R-Reno, announced Monday that his pension reform plan wouldn’t get a hearing. It wasn’t a terrible surprise. Democrats control the Legislature, and public employees are a core constituency of the Democratic Party. Heck, several Democratic lawmakers are public employees. They’re very happy with their pensions, thank you very much.

Nevada’s retired and soon-to-retire public employees have been promised billions of dollars in generous pension benefits that are guaranteed but aren’t funded. Depending on which set of accounting rules is used to estimate the liability, the taxpaying public is on the hook for a long-term bailout of between $10 billion and $40 billion — a burden that will only get bigger the longer lawmakers wait to overhaul the system. The bigger the bill, the less tax money available for schools and public safety.

The certainty that future government services will be squeezed to pay retirees should scare Democrats. The brutal new tax bill that will hit individuals and businesses frightens Republicans. So why isn’t the public outraged by the lack of movement on pension reform?

One of the most important policy challenges confronting the state is also one of the least understood issues. And taxpayers are in the dark by design.

Pension benefits in Nevada are kept secret in defiance of the state’s public records law. You can find out how much current public employees are paid in salary and benefits, but once those workers retire, they effectively vanish from the ledgers. The moment they start collecting their tax-funded pensions, their identities and income become confidential.

On Tuesday, the full Supreme Court will hear oral arguments on whether to keep retirees’ pension benefits secret or whether to bring them into the sunshine — and change the state’s political debate in the process.

You can explain the pension issue in broad terms to the public, but voters won’t get angry enough to demand major changes until they see hard numbers attached to names and job titles. Public employee unions and their proxies insist that government retirees get by with a middle-class lifestyle, and there’s no concrete way to dispute them — only educated guesses, based on the formula used to calculate benefits, that large numbers of former public workers are raking in six-figure pensions before they turn 50.

The Reno Gazette-Journal has challenged the Public Employees’ Retirement System’s decades-long practice of keeping its records secret. In 2011, the newspaper sued PERS when the agency denied a request for the names of every Nevada government retiree, their dates of hire and retirement, their government employer, their final salary and their pension benefit. A District Court judge sided with the Gazette-Journal, blasting PERS’ arguments in favor of confidentiality and ordering the agency to fulfill the request.

But the PERS board refused to comply, and in 2012 it appealed the ruling to the state Supreme Court. The board’s seven members — six current public employees and one former government worker — were well aware of the political ramifications of releasing pension data in an election year, just before the 2013 Legislature. PERS succeeded in pushing arguments past November’s elections and the 2013 Legislature’s key bill deadlines.

The delay did nothing to strengthen PERS’ case. The agency claims state law prohibits the inspection of “the files of individual members or retired employees.” In granting the Gazette-Journal’s request, Carson City District Judge James Russell pointed out the vague nature of the law’s language — it does not specifically declare benefits confidential — and that the state’s public records law requires limits on disclosure to be “construed narrowly.”

PERS argues that the Gazette-Journal’s entire request was invalid because the newspaper failed to “request specific records as to be produced for inspection and copying.” Reno attorney Scott Glogovac, who represents the Gazette-Journal in the case, points out that the vast majority of government records — including those maintained by PERS — are digital. He says if this absurd claim is upheld — that only paper documents are public records — then any government entity can keep records secret just by storing them on a computer.

“In terms of what’s at stake in this case, the information that will be revealed, this case is substantially more important,” Glogovac said. “It isn’t going to change public records jurisprudence. But the public interest in this information is very high.”

Pension reform movements have gained momentum in other states — California, New York, Illinois and Massachusetts among them — because their pension payouts are public information. Journalists have worked backward from especially outrageous figures and uncovered systemic abuses by specific government entities, such as pension “spiking” through overtime rules and schedule manipulations.

Taxpayers’ heads exploded once they learned they were being robbed, that they were on the hook for even more, and that their elected officials were doing nothing to stop it.

Kirner’s plan was a good start. It would have tied the retirement age of future government hires to Social Security eligibility and banned the longtime scam known as buying “air time” — when government workers submit a cash payment to buy years of service they haven’t worked. This allows public employees to retire early, and in many cases collect hundreds of thousands of dollars in pension benefits they otherwise wouldn’t be entitled to. Kirner’s Assembly Bill 342 also would have created a pension hybrid with a reduced defined benefit and a 401(k)-style component.

It’s insane that public-sector workers can retire in their 40s and begin collecting a pension, with no penalty taxes assessed, then get another job to boost their standard of living when Social Security recipients lose benefits if they go back to work.

But none of this madness, which comes at the expense of better funded government services and lower tax bills, will ever change until we can see the maddening numbers from PERS.

Remember, District Court sided with the Gazette-Journal. The Supreme Court will have to hear compelling arguments to overturn that ruling — or simply make stuff up, which it certainly has done before.

Tuesday’s arguments should put pension records one step closer, finally, to the bright light of public scrutiny.

Glenn Cook (gcook@reviewjournal.com) is a Review-Journal editorial writer. Follow him on Twitter: @Glenn_CookNV. Listen to him Mondays at 4 p.m. on “Live and Local with Kevin Wall” on KXNT News Radio, 100.5 FM, 840 AM.