Editorial: Government retiree costs must be reined in

The PERS cost creep continues.

According to TransparentNevada, a website maintained by the Nevada Policy Research Institute, the number of former Nevada government employees drawing pensions in excess of $100,000 a year from the Nevada Public Employees’ Retirement System now exceeds 2,150. In 2013, when pension data were first made available the number was 1,000.

To pay for these lucrative pensions, starting in July the regular PERS members — teachers and other government workers — saw the amount of each paycheck that must be paid into the pension account increase from 28 percent to 29.25 percent. Half of that amount comes from the worker and half from the taxpayers. It is all taxpayer money to begin with.

Police and firefighters, who tend to have shorter careers, now must chip in 42.5 percent of their salaries, up from 40.5 percent. Again, half from the employer.

Despite these increases in contributions, PERS still will have a huge unfunded liability — more than $40 billion if you use generally accepted accounting principles.

According to Robert Fellner, NPRI’s policy director, all of the contribution hikes that have occurred over the past decade have gone towards paying down PERS’ debt rather than covering the pension checks for future retirees. “The debt component is now so large that 45 percent of what Nevada teachers will pay to PERS next year will go towards funding other people’s retirement, rather than their own, future benefit,” Fellner wrote earlier this year.

Fellner calculates the cost of funding other people’s retirement checks will cost the average teacher $7,680 this year.

Efforts to reform PERS over the years have gone nowhere. Perhaps because lawmakers themselves are members of the PERS racket.

The Nevada government worker retirement system, unlike anything found in the private sector, is based on a defined-benefit plan, meaning pensions are calculated as a percentage of the highest pay the worker receives at the end of his or her career times the number of years worked.

PERS benefits have ratcheted up over the decades by virtue of incremental benefit increases, collective bargaining gains, earlier retirement age, allowing the purchase of years of service, padding base pay with add-ons such as callback, standby, holiday, shift differential, extra duty, hazard and longevity pay, and simple compound interest.

According to the American Enterprise Institute, the average Nevada public employee pension is $64,000 a year or $1.3 million in average lifetime benefits, the highest in the nation. Meanwhile, the average Social Security annual benefit is $16,000.

It is long past time that the state change this ever more costly pension program from the defined-benefit plan to a defined-contribution plan, similar to the 401(k) plans used by corporations. The worker and the employer each contribute a set amount of the salary and the money is invested until the worker cashes out.

A bill to do this was introduced in the 2013 legislative session. Though it would have applied to future retirees only, the bill garnered no discussion and no vote was ever taken. It died without a whimper.

A version of this editorial appeared this week in some of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.

Editorial: Public employee pensions now shrouded in secrecy

Gov. Steve Sisolak has signed into law a bill that will make it impossible for the public and even elected officials to act as a watchdogs and catch abuses in the taxpayer-funded Public Employees’ Retirement System (PERS).

Senate Bill 224, sponsored by Democratic Sen. Julia Ratti, declares much of the information about state and local government retirees confidential. Only the names of pensioners and pension amounts would be public records. Such vital information as the last employer, years of service credit, the retirement date and whether the benefit is a disability or retirement benefit are all confidential.

The bill passed both the state Senate and Assembly largely along party lines, with only a handful of Democrats voting in opposition.

Ironically, when Democratic Gov. Sisolak was a Clark County commissioner, he used public records to expose abuse of county firefighter overtime pay and sick leave. According to the Las Vegas newspaper, Sisolak spearheaded reforms that resulted in an 80 percent drop in sick leave among fire department battalion chiefs.

Without the ability to analyze the information made secret by SB224 the public will not be able to tell whether government retirees are drawing excessive pensions.

PERS costs $2 billion a year and the taxpayers are on the hook for $40 billion in unfunded liabilities.

According to an analysis by American Enterprise Institute, the average Nevada public employee pension is $64,000 a year, the highest in the nation, while the average Social Security annual benefit is $16,000. Currently more than 1,500 Nevada public employee pensioners are drawing more than $100,000 a year.

The law that set up PERS states: “It is the policy of this State to provide, through the Public Employees’ Retirement System: A reasonable base income to qualified employees who have been employed by a public employer and whose earning capacity has been removed or has been substantially reduced by age or disability.”

Yet, in a court case seeking PERS records, Nevada Policy Research Institute’s (NPRI) attorney Joseph Becker observed that there are retirees in their 40’s collecting six-figure disbursements from PERS, while still earning income from other sources. “Only through the publication of name, pension payout and related data can the public better understand how the system works and the legislative purpose be effectuated,” Becker wrote.

During hearings on SB224, NPRI’s policy director, Robert Fellner, noted that a tip to California’s fraud hotline resulted in the system recovering more than $200,000, causing CalPERS to release a statement praising “the great value of the public’s assistance in CalPERS’ efforts to protect the state pension system from fraud, waste, and abuse.”

Fellner also noted the importance of disclosing whether PERS payments are for disability or retirement. A Los Angeles television station, using public records, discovered that a police officer who was drawing a disability pension from one city was working full-time as a police officer for another agency.

SB224’s backers argue revealing the names of pensioners might expose them to identity theft and fraud. The Nevada Supreme Court dismissed that claim in a 2013 ruling, saying, “Because PERS failed to present evidence to support its position that disclosure of the requested information would actually cause harm to retired employees or even increase the risk of harm, the record indicates that their concerns were merely hypothetical and speculative. Therefore, because the government’s interests in nondisclosure in this instance do not clearly outweigh the public’s presumed right to access, we conclude that the district court did not err in balancing the interests involved in favor of disclosure.”

Now, the secrecy is embedded in law and the public is blindered.

A version of this editorial appeared this week in some of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.

 

Editorial: Public records bills still pending

As the Legislature grinds its way down to sine die in a couple of weeks, there are still some pending bills that could affect your ability and that of the press to see just what our elected and appointed officials are up to by being able to access public records.

Senate Bill 287 would put some teeth in the current Nevada public records law, which requires that all public records and books, except those specifically exempted as confidential by law, must be open for inspection and copying. Despite the clear language saying the law should be liberally interpreted various agencies have manufactured excuses for not complying or simply flouted the law and basically said: If you want it, sue us.

Meanwhile in North Carolina

Should SB287 become law, if a court determines a governmental entity or the person making the decision on behalf of the governmental entity wrongly denies a records request, the requester may be awarded a civil penalty of not less than $1,000 or more than $250,000 per offense from the agency or the responsible party or both.

Some lawmakers and public officials, of course, are blanching at the $250,000 threat, but there should be room for compromise.

Richard Karpel, executive director of the Nevada Press Association, recently commented, “SB287 represents a real opportunity to enact public-records reform in Nevada. Among many other helpful provisions, SB287 would establish civil penalties for government officials who fail to comply with the Public Records Act … limit the ability of local governments and state agencies to charge excessive fees for records requests; and require government workers to help requesters focus their requests to get the information they are seeking.”

Karpel noted the press association and other members of the newly formed Right to Know Nevada testified in support of the bill in early April during a Senate Government Affairs Committee meeting.

“An army of government lobbyists lined up to testify against it,” Karpel said but the bill remains extant and is being shepherded by lawmakers sympathetic to the cause.

He said the press association is participating in a working group, which includes both supporters and opponents of the bill, which is trying to address concerns raised during the hearing.

Though opponents have attempted to gut the bill and add sweeping exemptions to the public records law, Karpel said, “Fortunately, there is a real desire among many lawmakers to pass a public records bill this session. That includes Gov. (Steve) Sisolak, who commented on his support for government transparency and the need to ensure there are ‘repercussions’ for foot-dragging state agencies in (a) recent interview with the (Las Vegas) Review Journal. So we’re hopeful we can get SB287 to the finish line before the session ends in June.”

On the obverse side of the coin is Senate Bill 224, which would exempt from the public records law the names of those who are drawing taxpayer funded pensions from the Public Employees’ Retirement System.

SB224 narrowly passed in the state Senate a couple of weeks ago on a vote of 11-10 with two Democrats joining all eight Republicans in opposing it.

State Sen. Pete Goicoechea, a Eureka Republican, said he opposed the bill because the pensions are taxpayer funded. “The people who are paying those funds have the right to know the name and the amount,” he was quoted as saying at the time. “I believe the public does have the right to know who it is and how much they are benefiting.”

Proponents of the bill have argued pensioners could be affected by identity theft, though they’ve not sighted a single instance of this occurring. Opponents argue the release of the names can help detect abuse of the system.

A tip to California’s fraud hotline once resulted in its pension system recovering more than $200,000. In a statement the California public employee pension system praised “the great value of the public’s assistance in CalPERS’ efforts to protect the state pension system from fraud, waste, and abuse.”

In another case a Los Angeles television station discovered that a police officer who was drawing a disability pension from one city was working full-time as a police officer for another agency.

These abuses will be impossible to detect should SB224 pass and become law.

A version of this editorial appeared this week in some of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.

Newspaper column: Do not shroud public employee pensions in secrecy

Some lawmakers in Carson City are pushing a bill that basically declares that it is none of your business how your tax money is spent. Senate Bill 224 would make the names of recipients of pensions through the Public Employees’ Retirement System secret.

The first glimpse at the kinds of duplicity this bill invites is the fact that two of the three chief sponsors of the bill — state Sens. David Parks and Joyce Woodhouse — are currently drawing six-figure pensions from PERS, a fact that would not be known if this bill were already in law.

At a recent hearing on the bill, the third sponsor, state Sen. Julia Ratti, argued that PERS benefits are set aside for the public employees’ future use and asked, “At what point is public servant no longer a public person?”

The answer is: When that person no longer obliges the public to guarantee that pension. Right now the taxpayers are on the hook for $40 billion in unfunded liabilities, when standard accounting practices are used to make the calculation. Never mind that the taxpayers paid half of the pension contributions for that government worker retiree and all of the rather princely salary that public employee used for their half of the contribution.

Perhaps the most egregious argument made in the hearing is that the bill would cut the cost of litigation. It was PERS itself that created that cost by trying to skirt court rulings that stated the names of public pensioners and their pension amounts are public records under the Nevada public records law, which states that its purpose is to foster democratic principles by providing taxpayers with access to public records.

After the state Supreme Court ruled the records were public, PERS changed the way it kept the records, prompting Chief Justice Michael Douglas to suggest PERS had “gone out of its way to violate the spirit of the law.”

The bill’s backers are still arguing that revealing the names of pensioners might expose them to identity theft and fraud. The state Supreme Court dismissed that claim in its 2013 ruling by saying, “Because PERS failed to present evidence to support its position that disclosure of the requested information would actually cause harm to retired employees or even increase the risk of harm, the record indicates that their concerns were merely hypothetical and speculative. Therefore, because the government’s interests in nondisclosure in this instance do not clearly outweigh the public’s presumed right to access, we conclude that the district court did not err in balancing the interests involved in favor of disclosure.”

During a hearing on SB224, Robert Fellner, policy director for the Nevada Policy Research Institute, countered that the publication of public pension information has enabled the public to correct abuses of such systems. A tip to California’s fraud hotline resulted in the system recovering more than $200,000, Fellner noted, causing CalPERS to release a statement praising “the great value of the public’s assistance in CalPERS’ efforts to protect the state pension system from fraud, waste, and abuse.”

In another example, Fellner noted that the importance of disclosing names was highlighted when a Los Angeles television station discovered that a police officer who was drawing a disability pension from one city was working full-time as a police officer for another agency.

“This type of abuse will be impossible to detect if SB224 becomes law and makes secret the names of those drawing tax-funded public pensions,” he testified, adding that 20 states maintain online public pension databases.

The law that set up PERS states: “It is the policy of this State to provide, through the Public Employees’ Retirement System: A reasonable base income to qualified employees who have been employed by a public employer and whose earning capacity has been removed or has been substantially reduced by age or disability.”

Yet in a previous court case NPRI’s attorney Joseph Becker observed that there are retirees in their 40’s collecting six-figure disbursements from PERS, while still earning income from other sources. “Only through the publication of name, pension payout and related data can the public better understand how the system works and the legislative purpose be effectuated,” he wrote.

Lawmakers should reject SB224’s effort to blinder the public. If not, Gov. Steve Sisolak — who once told a newspaper columnist, this one, that public employee contracting should be transparent and that the public employee pension system was overdue for reform — should veto it.

A version of this column appeared this week in many of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel and the Lincoln County Record — and the Elko Daily Free Press.

Editorial: PERS reform needed to curb ever higher costs

The PERS cost creep continues.

Earlier this month the board of directors of the Nevada Public Employees’ Retirement System authorized an increase in the amount state and local public employees and their employers — read: taxpayers — must contribute to cover pension costs.

That means, starting next July 1, for regular PERS members — teachers and other government workers — the amount of each paycheck that must be paid into the pension account will increase from 28 percent to 29.25 percent. Half of that amount comes from the worker and half from the taxpayers. Since the average public employee salary should be almost $53,000 a year by then, each worker would need to kick in on average another $330 or so a year to be matched from tax funds. (November 2018-Board Book)

Police and firefighters, who tend to have shorter careers, are assessed a higher amount. Their contributions will increase from 40.5 percent to 42.5 percent. Since the average pay should be more than $79,000 that means an almost $800 increase to be chipped in by each cop and firefighter, also matched with tax money. 

Expect those government workers to bemoan the pay check cut — even though their benefits contributions are being increased — and run crying to the Legislature to demand more money. 

The Nevada government worker retirement system, unlike anything found in the private sector, is based on a defined benefit plan, meaning pensions are calculated as a percentage of the highest pay the worker receives at the end of his or her career times the number of years worked. 

According to the American Enterprise Institute, the average Nevada public employee pension is $64,000 a year, while the average Social Security annual benefit is $16,000. Nevada Policy Research Institute has posted at its TransparentNevada.com website a list of pensions paid in 2015. This includes more than 1,500 public employee pensioners drawing more than $100,000 a year.

The cost of these pensions have skyrocketed over the years.

Victor Joecks, a columnist for the Las Vegas newspaper, points out, “Nevada has been increasing contribution rates for decades to pay off unfunded pension liabilities. When PERS started in 1948, the contribution rate was 10 percent for all employees on their first $400 in earnings. In 2003, it was 18.75 percent for regular employees and 28.5 percent for police and fire. Next year’s rates are 56 percent higher for regular employees and a 49 percent increase for police and fire compared to 2003.”

Joecks calculates that if teachers contributed at the same rate they did in 2003 their take-home pay would be $2,800 more a year.

The system has an unfunded liability of more than $40 billion when one uses generally accepted accounting principles. That’s more than $53,000 per Nevada household.

It is long past time that the state change its ever more costly pension program from the defined-benefit plan to a defined-contribution plan, similar to the 401(k) plans used by corporations. The worker and the employer each contribute a set amount of the salary and the money is invested until the worker cashes out.

There actually was a bill introduced in the 2013 legislative session that would have done this. The bill garnered no discussion and no vote was ever taken. It died without a whimper in the Assembly Ways and Means Committee.

One day the PERS balloon will burst. We call on lawmakers to act now.

A version of this editorial appeared this week in some of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.

Nevada high court strengthens access to public records

In a narrow 4-3 decision Thursday the Nevada Supreme Court strengthened the public’s access to records held by government agencies, ruling that the Public Employees’ Retirement System must provide the names and pension amounts of retired public workers.

In 2013 the court ruled that PERS had to provide those records to the Reno Gazette-Journal and it did so, but the following year PERS altered its record keeping process so that names were deleted from the pension data and each record was linked only to confidential Social Security numbers. When the Nevada Policy Research Institute sought the same records in 2014 as was given to the newspaper in 2013, it was denied. PERS cited the court ruling that said it did not have to “create” a record on request.

The majority opinion was penned by Chief Justice Michael Douglas and joined by Justices Michael Cherry, Mark Gibbons and Kristina Pickering. The dissent was penned by Justice Lidia Stiglich and joined by Justices Ron Parraguirre and James Hardesty. Stiglich, who was appointed in 2016, is up for re-election on the November ballot and faces conservative District Court Judge Mathew Harter.

The majority notes that PERS’ contention would contravene the very purpose of the public records law, which is to allow the public to keep an eye on how its government officials behave and spend their money.

The opinion cited a court ruling that found “sorting a pre-existing database of information to make information intelligible does not involve the creation of a new record because … computer records found in a database rather than a file cabinet may require the application of codes or some form of programming to retrieve the information. Sorting a database by a particular data field (e.g., date, category, title) is essentially the application of codes or some form of programming, and thus does not involve creating new records or conducting research — it is just another form of searching that is within the scope of an agency’s duties …”

The majority also cited its own decision in a case called Blackjack Bonding that found “when an agency has a computer program that can readily compile the requested information, the agency is not excused from its duty to produce and disclose that information.”

In a footnote, the majority countered the contention of the dissent, saying, “The dissent argues that the creation of a computer program is not merely drawing information from a database, but rather, improperly requires the agency to conduct research. However, its reasoning ignores the realities of information storage in the digital age. As specifically recognized by the (the aforementioned court ruling), “computer records found in a database rather than a file cabinet may require the application of codes or some form of programming to retrieve the information.”

Another footnote said the majority was not overruling its previous decision about an agency not having to create a record, but clarifying the earlier holding to reflect the realities of the advancements in technology and to further the purpose underlying the public records law.

The court remanded the case to the lower court to determine precisely how the NPRI records request would be handled and what, if any, expenses the agency could charge for the production of the records.

NPRI’s Director Robert Fellner said in a press release about the case: “PERS argued that public records should be defined narrowly to only include existing documents or reports, rather than all forms of recorded information related to governmental affairs. Had the Court accepted this argument, governments across the state could simply hide information they did not wish to be made public by keeping it stored in a computer database. Thankfully, the Court upheld the plain, statutory definition of a public record to include information stored in a computer database.”

 

Editorial: PERS should stop trying to hide public records

The Public Employees’ Retirement System should stop wasting taxpayer money and release the records of Nevada public employee retiree payments as the courts previously ordered them to do.
The Reno Gazette-Journal sued for these records in 2013 and won in the state Supreme Court, which found the records are clearly covered under the state public records law. The records were released, but the very next year PERS changed how their files are maintained in an obvious ruse to dodge the clear meaning of the court ruling. PERS now says their files do not contain names of retirees, but only Social Security numbers, which are confidential. They also say the law does not require them to create a new document from existing computer files, even though a past state Supreme Court in another case required just such a document creation.
Nevada Policy Research Institute sued PERS​ and the Supreme Court heard the case this past week.
​This past summer District Court Judge James Wilson spelled out clearly his rationale for requiring the records to be released: “Considering the purpose of the NPRA (Nevada Public Records Act), to foster democratic principles by providing member of the public with access to public books and records; the legislative mandate that courts construe the NPRA liberally to carry out this important purpose; the legislative mandate that any exemption, exception or balancing of interests which limits or restricts access to public books and records by members of the public must be construed narrowly; the lack of evidence that producing the requested information, retiree name, years of service credit, gross pension benefit amount, year of retirement, and last employer would require unreasonable demands or costs on PERS; the fact that PERS altered its procedure in providing information to its actuary to eliminate the names of retirees in part because of the Reno Newspapers decision, the court concludes that PERS does have a duty to create a document that contains the requested information.​”
​During this past week’s hearing Chief Justice Michael Douglas suggested that PERS had “gone out of its way to violate the spirit of the law.” Indeed it has.
All NPRI is seeking is ​ retiree name, payroll amount, date of retirement, years of service, last employer, retirement type, original retirement amount, and cost of living increases.
PERS argues there is some vague possibility of identity theft or fraud if this information is released, though the courts have ruled such supposition cannot outweigh the public’s right to know how their tax dollars are spent.
In fact, the Supreme Court has all ready addressed and adjudicated this in the Reno newspaper suit in 2013, saying, “Because PERS failed to present evidence to support its position that disclosure of the requested information would actually cause harm to retired employees or even increase the risk of harm, the record indicates that their concerns were merely hypothetical and speculative. Therefore, because the government’s interests in nondisclosure in this instance do not clearly outweigh the public’s presumed right to access, we conclude that the district court did not err in balancing the interests involved in favor of disclosure.”
NPRI’s attorney Joseph Becker argued in a brief filed with the court that the law “states that the purpose of PERS is to, ‘provide a reasonable base income to those whose earning capacity has been removed or substantially reduced,’ previously released records indicate that there are retirees in their 40’s collecting six figure disbursements from PERS while still earning income from other sources. … Only through the publication of name, pension payout and related data can the public better understand how the system works and the legislative purpose be effectuated. … Additionally, because lawmakers can directly profit from decisions they make pertaining to PERS, there is an overwhelming need for the public to have comprehensive access to this information.” Seems persuasive to us.
PERS should stop stalling and release the records.
A version of this editorial appeared this week in some of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.