No fingerprints on the late, unlamented bill to reform public employee pensions

A year ago I wrote about how actuarially unsound the Nevada public employees pension system is and rhetorically asked whether anyone would have the courage to file a bill draft and weather the firestorm of the public unions.

Randy Kirner

Well, Republican Reno Assemblyman Randy Kirner introduced just such a bill, but there was no firestorm, not even a discussion and certainly not a vote. Assembly Bill 342 died without a whimper in the Assembly Ways and Means Committee.

Though the Review-Journal account of the demise of the bill failed to offer the Clue-like dénouement: “It was Ms. Carlton in the Ways and Means Committee room with an axe,” all the circumstantial evidence points this way.

In the Nevada Legislature all lawmakers are equal, except some are more equal than others, namely committee chairs such as Maggie Carlton, D-Unions, chair of Ways and Means, who can send a bill to Fiddler’s Green without having to answer to anyone.

You see:

But you gotta play by Nevada rules
Forget about da tings you learned in school
We use a different box of tools
And you gotta play by Nevada rules

And the No. 1 Rule is The House always wins, and in this case The House is a wholly-owned subsidiary of the public employee unions.

Maggie Carlton

Kirner’s bill would have created a hybrid retirement program for new employees hired after July 1, 2014. It would be a half defined-benefit and half defined-contribution plan. It included a cap on annual benefits and a prohibition against workers buying years of service credit. This little scam allows some public employees to work for 25 years, purchase five years of service credits, and retire at the age of 45 with 75 percent of their top pay adjusted for inflation for life.

The unfunded liability for the Public Employees’ Retirement System (PERS), for which the taxpayers are eventually on the hook, is officially $11.2 billion.

A study a year ago by Andrew Biggs, an American Enterprise Institute resident scholar, found that by using economist-preferred fair-market evaluations the number is closer to $41 billion. Annual contributions to cover costs and amortization, Biggs says, would be $5.8 billion. The state’s annual general fund is only $3 billion.

Though this unfunded liability has grown by $1.2 billion over the past two years, and that’s the “official” figure, Gov. Brian Sandoval has said he would not seek to fix the problem this year but support still another independent study, which, of course, will not be completed by the end of the session.

Here is how Clark County’s former county manager, Thom Reilly, explains the problem:

10 comments on “No fingerprints on the late, unlamented bill to reform public employee pensions

  1. Vernon Clayson says:

    The beast feeds itself. The legislators at all levels likely earn theirs with less years of “service”, Mr. Reilly likely gets a pension, if not the full time at least a vested period. I don’t recall whether the horse threw him off or he retired of his own volition but why doesn’t he get back on that horse and approach this from the inside? As if, that would be a mountain to climb, national politicians and unions would add their voices and money to those here, they might even declare him worthy of the one way ride out of state normally reserved for the unbalanced and unaware

  2. He’s in academia now. I’m pretty sure exited of his own volition.

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  3. Vernon Clayson says:

    I’ll have to check that text out, just the title alone flies in the face of everything that public employment stands for, I repeat that the beast feeds itself, I wonder if he describes the difference between public servant and public officer which would be edifying for a lot of people, that would be those that think the cop on the beat is the same category as the politician on his throne. The politician only claims to be a public servant when he’s looking for votes, high ranking police officers can also be public officers but serve at the pleasure of the politicians; the beat cop is a public servant all of the time, but it’s wise not to tell one of them he’s a servant. I’ve been both a beat cop and a chief, there’s damned little pleasure in dealing with politicians as a chief but there is a certain amount of satisfaction in being a beat cop, in my case in the New York State Police, I earned my pension, albeit paltry in comparison to present day retirees. Thom Reilly, as a county manager was a public officer, it’s doubtful he ever considered himself a publlc servant. I’ll check his text out.

  4. I have a copy of the book around here somewhere. It is worth the read, especially if you are a policy wonk and numbers cruncher.

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  5. Vernon Clayson says:

    I read from books every day and have for most of my life, there’s an old quotation, “Something new is learned every time a book is opened”. It’s true, will get to Reilly’s book but right now I’m reading White Cargo by Dan Jordan and Michael Walsh about the white indentured servants sent from England to the colonies in America, preceding the enslaving of Africans by decades. It’s difficult to put down.

  6. […] from defined-benefit plans to defined contribution plans, similar to 401(k) plans, which has been called for but ignored in Nevada for years. He also suggests that government pensions should be calculated based on career earnings […]

  7. […] from defined-benefit plans to defined contribution plans, similar to 401(k) plans, which has been called for but ignored in Nevada for years. He also suggests that government pensions should be calculated based on career […]

  8. […] plans to defined contribution plans, similar to 401(k) plans, which has been called for but ignored in Nevada for […]

  9. […] modestly reformed public employee pensions. The bill garnered no discussion and no vote was taken. Assembly Bill 342 died without a whimper in the Assembly Ways and Means […]

  10. […] Reno Assemblyman Randy Kirner introduced a bill to begin the transition to such a pension system. Assembly Bill 342 died without a whimper in the Assembly Ways and Means Committee, axed by the Democratic committee […]

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