Unions support PERS overhaul bill they call ‘reasonable’

By Michelle Rindels, Associated Press

Monday, May 11, 2015 | 1:46 p.m.

CARSON CITY — Unions that fought against an overhaul of the Nevada Public Employees Retirement System earlier in the legislative session are getting behind another bill they say is more moderate and doesn't "blow up" the system.

The Nevada State Education Association teacher's union joined police, firefighters and business groups in supporting SB406 on Monday. Republican Senate Majority Leader Michael Roberson, the bill's sponsor, said it will save the retirement system $1 billion every 10 years by paying out slightly less to employees hired on or after July 1, 2015.

"The point is to try to balance the competing concerns ... regarding PERS reform, and to bend the cost curve down over time to increase the solvency of the system," Roberson said.

The bill changes the way benefits are calculated to pay out less to new hires, and only considers income up to $200,000 a year when determining an employee's payout. Those measures are meant to reduce a multibillion-dollar unfunded liability in the pension system.

"It is a black eye to the system when (members) are allowed to retire at hundreds of thousands of dollars," said Warren Wish of the teacher's union, who testified in favor of the measure.

Another provision in the bill prevents public workers from collecting benefits after being convicted of certain felonies stemming from their public work, including bribery, embezzlement or stealing public money. Upon conviction, the system would have to return contributions paid by employee without interest, but wouldn't have to pay out state matching funds.

The teacher's union and others sharply opposed another PERS overhaul bill, AB190. That measure was sponsored by Republican Assemblyman Randy Kirner and sought to create a hybrid pension system with elements similar to a private 401(k) plan.

Officials with the PERS system said they believed there were constitutionality issues with that bill, and said it could pay out so little that state employees would need to use Social Security. By contrast, PERS officials said SB406 was in line with the pension system's mission.

Priscilla Maloney of the American Federation of State, County and Municipal Employees union had technical concerns about the bill, and other union representatives said they worried that the lower pension payouts would make it harder to attract new employees.

But overall, witnesses that cried foul on other Republican-backed PERS bills were supportive of this one.

"We believe that it's a reasonable approach to reform," said Rusty McAllister of the Professional Fire Fighters of Nevada.