AB 190 introduced by Randy Kirner is still alive.Though it seems unlikely it will be heard anymore there is ALWAYS a chance it could make it all the way through the legislature ready for Sandoval’s signature. I have seen this happen .. a lot especially near the end of Session
I found the NV PERS document about the cost to implement Kirner’s ALEC bill. Here it is: AB 190 Fiscal impact for NV PERS.
NV PERS Fiscal cost summary:
FY 2015/2016: $808,804,566
FY 2016/2017: $790,173,006
All fiscal years after 2016/2017: $751,929,898
This seems like a lot of money to me. I don’t know how Assembyman Kirner can ignore this.
All fiscal notes for AB 190:
City of Reno (As Introduced)
Department of Administration (As Introduced)
Local Government (As Introduced)
Public Employees’ Retirement System (As Introduced)
White Pine County School District (As Introduced)
The NV PEBP Board called an emergency meeting after the IFC (Interim Finance Committee) refused to release funds for the state employee Wellness Program. The program would have saved each employee $50 a month if they complied with the program requirements.
Yesterday, April 15th, the NV Legislature’s Assembly Way and Means Committee, took up AB 190 submitted by Assemblyman Randy Kirner, (R-Reno). The bill would create a new hybrid retirement system for new state and public employees. Kirner said many things at the hearing and most if not all were from the ALEC playbook on how to attack then destroy public employees retirement systems. He is trying to solve a problem that does not exist.
At the meeting Kirner lied, or he is totally clueless about retirement systems and revels in ignorance and relies on ALEC for language. Both are bad. Here are some Kirner vs. Truth examples:
Kirner: He said the unfunded liability of NVPERS was five times what is was 15 years ago,$12.5 billion.
Truth: The unfunded liability has been lowered and will be eliminated by 2034. The unfunded liability has been reduced by about $13 billion to $10 billion now. Under Kirner’s plan, the unfunded liability would grow tremendously.
Kirner: He said NVPERS assumptions of an eith percent average return on investments is “Nuts”.
Truth: NVPERS average return was 9.5 percent for the past 30 years, and this was even accounting for the “Great Recession.”
Kirner: He said his new hybrid plan would not cost very much implying NVPERS is just exaggerating the fiscal impact.
Truth: Those in the old NVPERS would still get their retirement but to do that, there have to be contributions tokeep it solvent. The cost would be $700 million annually or 15 percent of the payroll during a two-year budget cycle. $700 million seens like a lot ofmoney to me.
Kirner: He said the hybrid system would somehow eliminate the costs of the current plan.
Truth: The unfunded liability would go up if Kirner’s plan becomes law. The plan would rely on fewer active employees in the old system to pay the bill, this would drastically increase retirement costs for them.
Kirner: He said the unfunded liability would be paid down by a six percent contribution from existing employers.
Truth: Currently NVPERS collects 11 percent toward the unfunded liability which is an amount needed to retire that debt. Kirner has his math wrong.
Kirner: He says his math is correct.
Truth: The NV PERS liability is over a five year average and on paper, shows it is about $12 billion when the actual dollar amount is $10 billion.
Kirner: His plan would cap the employer’s contribution at six percent, and that should be enough for plan solvency.
Truth: Solvency means that few and fewer active public employees in the “old” system would be required to make up the difference. The hybrid plan will result in significant contributions increases to retire the debt.
Kirner: He says the NVPERS is a financial mess.
Truth: NVPERS is funded for a total of 76 percent of its future obligations and assets have grown from $16.6 billion in 2005 to abouit $34 billion in 2015. NVPERS is one of the best retirement systems in the country. It is well run and quite solvent.
Kirner: He says his proposed hybrid retirement plan would meet Federal requirements.
Truth: His plan does not. The Federal government would take over the new hybrid retirement system.
Kirner: He says his witness experts are right, and their testimony that the new plan would be like Utah’s is correct.
Truth: His experts have little or no knowledge of retirement plans. Their comparisons to Utah are misleading. (lies) Utah has a much lower contribution rate and uses Social Security as its base. Nevada state employees have no Social Security and Kirner’s plan continues to leave them out of Social Security.
Randy Kirner is an ALEC shill and a liar. He needs to just to go away and take his witnesses with him. Fortunately, the committee did not act on his bill. This inaction means it is probably dead, but even hucksters get a fair hearing and sometimes a re-hearing in Nevada. Backroom shenanigans might see the bill revived especially during that waning days of the session. Watch for it!
Harry Reid, one of our senators has announced he will not run for re-election next year. I will miss his mean spirit and pragmatism. Exit Harry,enter Brian.
Like I said years ago, Brian Sandoval our current governor will quit like he always does for something better and this better will be a senate seat. He is always more interested in himself than the needs of those who re-elected him. He has always been this way, he will always be this way.
I wonder what kind of governor Mark Hutchison will be?
I just read an article that is very well written and logical. Please read it and send it to your legislator as well:
“Nevada PERS a model for nation; don’t change it,” by Teresa Ghilarducci, Las Vegas Review Journal, April 16,2015
I thought about including a paragraph in the article but thought better of it. In the past, the newspaper has sued bloggers for using a properly sourced paragraph of one of their articles. Given they are so litigious, I will only include the article title. Seriously, even that makes me nervous.
Finally, I must say that I am very surprised the article was published. Historically they have attacked state employees at every turn as being lazy, over-indulged and worthless. Something must be going on “over there” for them to publish an article like this one. I wonder what is up?
AB 190 is advancing through committees this session. It is a bill to change Nevada PERS from a defined benefit to a hybrid plan that is mostly a defined contribution plan.
Assemblyman Randy Kirner who proposed the legislation thinks the bill would save taxpayers a lot of money. He is wrong and 35 states have already visited this and concluded changing their plans in this manner would cost their taxpayers too much.
Kirner’s plan will cost Nevadans an extra $750 million a year after two years. He thinks this money will “just appear” to help Nevada taxpayers pay the bill like pennies from heaven.
NV PERS executive director Tina Leiss said the annual costs for the first two years starting July 1,2016 would be $790 million. Plus there would be an extra $18 million setup costs in the first year. Then the annual cost would be $750 million. NV PERS says these figures are from an independent actuary they use.
Further, state employees would be expected to pay about 7.5 percent more for their retirement that is already 14 percent of their annual salary. In contrast, Social Security participants pay just 6.2 percent of their income for their retirement.
Still, Kirner does not believe his plan will cost as much as NV PERS says it will though he admits that two years ago additional annual costs for a hybrid plan were about $700 million.
No matter, the costs will be enormous, and no pennies from anywhere will be palatable to anyone, except Kirner who was obviously absent from basic math while in elementary school.
Kirner is simply an ALEC drone. His proposal is from their playbook that seeks to punish and destroy public employees with this and other proposals.
I am confident that this bill will die as it should. Though Kirner has been a legislator for many years and he still does not understand the real problems in Nevada. Incredibly, he he uses language from a conservative think tank and presents it as his own. This proves his ignorance and underscores his hatred of public service employees, especially state employees.
If he is unwilling or unable to understand the issues then what he does is not a mistake but premeditated assault on all public employees.
The costs are much too high for his hybrid retirement system. Hopefully, Kirner will understand that pennies from heaven is a fairy tale. He also needs to stop being an ALEC drone.
I encourage you to read the following post from Desert Beacon, ALEC assault on Nevada PERS: AB 190. Here is part of what it says:
“Translation, if I were to total up the liability for every public employee, working and retired, and treat it as if it were all going to be paid out tomorrow morning, the number would be really big – and really misleading and inaccurate.
What we need to focus on is how well the program deals with liabilities over time. So, when AonHewitt did an independent review of the NV PERS system what did it find?
“AonHewitt found that NV PERS “funding levels and the discount rates were not uncommon, where NV PERS differs from others is in its Funding Policy and contribution rules which provide much better than average protection, when compared to similar systems. Continued review and comparisons of costs and benefits with other large plans, actuarial audits, and consistent updating of the Funding Policy facilitates NVPERS ability to remain among the best run large public systems.” [AonHewitt pdf]
Changing the current PERS system is unnecessary. NV PERS is well run and properly financed. Changing NV PERS to a hybrid system is simply an attempt to transfer the billions of dollars to private investment companies at the public’s expense. A dual system will be more expensive and less transparent. This is not what we want.
ALEC, American Legislative Exchange Council