Nevada public employee pensions are the richest in the nation

We knew Nevada’s public employees had generous pension benefits, but now a researcher at the American Enterprise Institute has done the calculations and found Nevada’s public pensions are the richest in the nation — $64,000 a year or more than $1.3 million in lifetime benefits. That doesn’t include public-safety workers, such firefighters and police, who can retire earlier and generally have higher salaries, especially in Nevada.

Compare this to the average annual Social Security benefit of $14,220.

Andrew Biggs, a resident scholar at the AEI, calculated what those retiring in 2011 and 2012 from public employment would be paid as pensions based on the pay and benefits in each state. TransparentNevada has posted what current retirees in Nevada are being paid in benefits.

Andrew Biggs

“Just as annual public pension benefits vary by state, so do lifetime benefits,” Biggs writes. “The most-generous benefits are paid in Nevada, where the average full-career employee will receive more than $1.3 million in pension benefits over the course of his retirement. In the four next most-generous states — Alaska, California, Colorado, and Oregon — lifetime benefits exceed $1.2 million. A wealthy, high-cost state such as Connecticut offers a typical full-career employee more than $1 million in lifetime benefits, but so does a relatively low-cost state such as West Virginia.”

Biggs recommends that states switch 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 rather than final wages. “Social Security already does this, using adjustments to account for inflation and the growth of wages over time,” Biggs says.

Biggs fails to mention that some public employees can get a spike in salary in their final years to boost their pension payouts, as A.D. Hopkins reported in 2009 about Clark County firefighters.

Biggs concludes:

“Public employees are likely more risk averse than private-sector workers and so may desire a different and less risky type of pension. Likewise, governments may find that different pension structures better suit their needs in attracting and retaining employees. But different pensions for public employees need not imply public pensions that are many times more generous than those paid to the private-sector workers whose taxes keep public plans running.

“Many public plans have already instituted lower benefits for new hires, and more are considering such reforms. But it would be rare to find any full-career public employee who would receive a more generous pension in a private-sector job. Public employees should be willing to accept—and private-sector workers to demand—more equity in the generosity of their pension plans.”

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10 comments on “Nevada public employee pensions are the richest in the nation

  1. January Jones says:

    It would be nice to know what jobs these people had. The average state worker who is working now will never see this kind of retirement money.

    Take this person for example, he is a disgraced Elko County District Judge who was a county career attorney prior to that:

    http://transparentnevada.com/nvpers/2014/joseph-michael-memeo/

  2. That’s a lot salve to soothe the disgrace, Mr. Jones.

  3. A.D. Hopkins says:

    I believe the system he is talking about includes all public employees in Nevada, not just state employees. Of all the agencies in the state, I believe the state itself has been best about keeping actual salaries in line with reality, so PERS payments to the former state employees are not so ridiculously high as for other public employees covered by the same system.
    And thanks, Mitch, for remembering I was trying to pry loose some of these facts a few years ago. Glad somebody finally was able to do something comprehensive.

  4. Steve says:

    Mr. Hopkins, were it not for people like you there would be no ground on which to build.

    Don’t sell yourself short.

  5. Athos says:

    Finally! We lead the Nation in something!

    How is this tied to test scores for our high school children?

  6. […] This week’s newspaper column, available online at The Ely Times and the Elko Daily Free Press, expands on an item posted here earlier. […]

  7. Girish says:

    Are you jealous? Or, are you a cry baby? We in Nevada pay always higher for any basic service through out our life here. You idiot are trying to focus in such a way it looks like you belonged to one of the worst sucker state and making a huge cry baby of yourself !!!

  8. Athos says:

    Wha chu talkin’ bout, Willis?

  9. […] for those workers in the Nevada Public Employees’ Retirement System known as PERS, are the richest in the nation, according to research conducted by the American Enterprise […]

  10. […] has been substantially reduced,” NVPERS has gradually, and almost imperceptibly, grown into the richest public employee pension program in the nation, according to the American Enterprise […]

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