System sees threat in judge’s bid for pension

By Jeff German

Tuesday, April 21, 2009 | 2 a.m.

District Judge Doug Smith is suing the Nevada Public Employees Retirement System because he wants to collect retirement pay while drawing his $160,000 salary.

Smith is asking that one of his fellow judges order the system to start paying him his pension. Smith has contributed to the retirement system for nearly 24 years, the past 15 as a Las Vegas justice of the peace.

The system’s executive director, Dana Bilyeu, said Smith’s legal challenge “is of great concern to us” because it has potential to disrupt the way the entire $19 billion state retirement system operates.

In the five-page suit he filed last week in District Court, Smith said the seven-member retirement system board, after a hearing on March 19, denied his request to collect his pension. Smith has sought to retire from public employees system and start contributing to the separate Judicial Retirement System for district judges.

The basis for denial, he wrote, was that the board had no authority to grant his request because on the date the system received his application, he had already started his new job as an elected member of District Court.

Bilyeu said that what Smith wants to do is permissible as long there is a break of at least one day between the two jobs — but that didn’t occur in his case.

“His last day of service in Justice Court was one day, and the next day he was in District Court,” Bilyeu said. “The rules don’t allow for that.”

If Smith prevails, she said, it could force the system to operate outside of its strict statutory provisions and jeopardize its standing with the IRS. And that could have a profound effect on how it oversees benefits for about 106,000 state employees, she added.

Smith, however, said in his suit that he is unaware of any statute that disqualifies him from receiving retirement benefits while he is on the District Court bench.

He contends the retirement system board incorrectly interpreted the law, that it does not hinge on the timing of his last day of work.

Before his retirement from Justice Court, he noted, he had informed the retirement system both verbally and in writing that he intended to collect his public employment retirement benefits while a district judge.

“At no time was Judge Smith informed that there was a deadline or time element involved in his filing of his application for retirement,” he wrote.

Smith said that on Jan. 5, the day he became a district judge, he asked about his retirement papers and was told to fax them to, which he did. He said he faxed the papers a second time on Jan. 7 after an official told him the system had not received them.

Then, on Jan. 20, Smith wrote, he was “shocked” to learn that his application was being denied because he had missed a deadline for submitting his application. The retirement system board.

“There exists a justifiable controversy between Judge Smith and the board regarding the correct interpretation of the PERS statutes and other laws and regulations binding on the board,” Smith wrote.

Whether a visiting judge will be needed to hear the case remained unclear Monday afternoon.

The case was initially assigned to District Judge Valorie Vega, but she indicated through a spokeswoman Monday that she planned to recuse herself.