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.

How to wipe away the crocodile tears of state workers complaining of being underpaid

The next time someone you know who works for state or local government starts whining about how poorly compensated they are, pull out your smart phone and head straight for TransparentNevada.com. The site is maintained by the Nevada Policy Research Institute and was updated with the newest data today.

There you will find the base pay, overtime and benefits for more than 132,000 government employees statewide for the 2012 calendar year. You may look up data by name, job title and by jurisdiction — from the state of Nevada to all the counties and many cities and specialty agencies. The data goes back a few years for many agencies.

Since the state Legislature is in session and state workers are engaged in their biennial weeping of buckets full of crocodile tears, I scanned the data across various pay grades for random individuals to see their tales of woe hold water.

Recently a Jennifer Knight, identifying herself as a state employee, penned a letter to the Reno newspaper detailing how downtrodden and underpaid state workers are. She claimed many are on food stamps and qualify for Medicaid. She stated:

“When the economy bottomed out, we rose to Nevada’s call. We spent less time with our families so that fellow Nevadans could clothe and feed their children and maintain their dignity and independence. We sacrificed so that Nevada may recover because we believe in its recovery, and it is recovering. The average weekly wage just hit a record high! It is now time for Nevada to make its state employees whole, for our sacrifices have become untenable.”

It’s a familiar story.

Checking TransparentNevada I found a Jennifer A. Knight, who is an unemployment insurance representative 3, and sure enough this Ms. Knight has seen a pay cut of 4.7 percent since 2009, when she got a hefty pay raise while the private sector was tanking.

According to the Census Bureau, the median household income in Nevada has fallen 14 percent since 2008. Of course, many of these households had a wage earner’s pay fall 100 percent.

When I checked those couple dozen names of state workers across salary ranges from $10,000 to more than $100,000, almost universally, the workers got decent pay hikes between 2008 and 2009 but have taken — due to unpaid furlough days imposed by the governor (Spent less time with their families?) — modest pay cuts between 2011 and 2012. Most cuts from the 2009 highs appear to range from about 3 percent to 6 percent. There were a few larger cuts, some of which could be explained by individual circumstances such as leave of absence or resignation sometime during 2012.

Don’t let them tell you how much worse off they are than the private sector. A check of a different database, this one at the Department of Employment, Training and Rehabilitation reveals 2012 Nevada average weekly wages of: private sector, $815; state government, $898; local government, $996; federal government, $1,251.

By the way, the governor said in April that as of July 2014 state workers will no longer have to take unpaid furlough days. Problem solved? I suspect state workers will still be whining.