Las Vegas Sun | Examination of public employee pensions raises eyebrows, questions about accuracy

By on June 20, 2012   /   Nevada Press, Press  

Finding from TUA’s pension project on Las Vegas, Nevada, are featured in this article at the Las Vegas Sun.
While the state retirement system appeals a court order to release individual pension data, a privately funded nonprofit group has taken it upon itself to estimate pensions for hundreds of public employees throughout local and state government.
And though many of the group’s results are fairly astronomical, they are not completely accurate — a fact that even Taxpayers United of America, the report’s author, concedes.
The data, released Monday by Taxpayers United, assumes employees reach their fully vested retirement potential (which earns them an annual pension equal to 75 percent of their three highest salary years) retire at 55, then live another 30 years and get an average of 3 percent in annual cost-of-living boosts.
State retirement actuarial tables say life expectancy is 82 years, most public employees quit or retire after about 20 years, and around age 64. After 20 years of employment, they are eligible for a pension equal to about 50 percent of their three highest salary years.
Here’s one example of how those small changes can account for huge differences in estimated retirement pay:
Former Rebels basketball coach Lon Kruger is at the top of Taxpayers United’s list of pension payouts to UNLV employees. Kruger earned $606,000 in gross annual wages during his tenure at UNLV. By the Taxpayers United spreadsheet, his estimated annual retirement payment would be $466,000, earning him $17 million over the life of his retirement.
But if you put Kruger’s numbers into the “benefit calculator” on the state Public Employees Retirement System website, you get a different number. It estimates his annual payment around $113,000, if he retires at 65. Then if he lives to 95 and gets a 3 percent bump each year, his total earnings would be about $5.5 million. If he lives to 82, the amount is $2.7 million.
Kruger, who turns 60 in August, now is head coach of the Oklahoma Sooners.
Dana Bilyeu, executive officer of the Nevada Public Employees’ Retirement System, noted that the average annual payment to public employees in the system is $29,000. That compares to about $22,000 for those who receive Social Security retirement benefits. Public employees do not contribute to or earn Social Security.
“This is extreme in every single scenario,” Bilyeu said of the Taxpayers United estimates. She added that the PERS actuarial tables — which take into account life expectancy, retirement age and other factors — would have been readily available to the group.
Rae Ann McNeilly, outreach director for Taxpayers United of America, said the point of making the estimates was to show “how the system allows for outrageous pensions that the taxpayers just can’t sustain.”
“And the reason for them is to keep the union bosses and elected officials in power,” she added. “That’s the game that they play. They make it sound like it’s for the employees and the children. It’s not.”
She would like to see Nevada enact a law to put new hires in 401(k) retirement plans.
McNeilly has some support. A push for more austerity by Clark County commissioners in recent years has bolstered county staff to take tougher stands in union contract negotiations. A new contract with county firefighters, for instance, has for the first time language that obligates firefighters to pick up their portion of state-mandated increases in retirement contributions.
County Commissioner Steve Sisolak said McNeilly’s point was one being recognized in other states and cities.
“With life expectancy increases and earlier retirements, there’s not enough money to sustain those benefits over time,” he said. “That’s what these jurisdictions are running into.”
He recalled years when Lake Mead was so full, spillways were opened to release the water into the Colorado River below the dam. “Now look at the downturn,” he said. “You have to look ahead.”
He thinks the system should be “tweaked.” One area would be to base retirement payouts on all of an employee’s public work history, not just the three highest salary years.
McNeilly said the state retirement board could do more to make policy decisions like that easier. They could drop their appeal and release personal retirement information.
“That’s the big story here is, give us the information,” she said.

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Nevada’s Staggering Government Pension System Revealed!

By on June 19, 2012   /   Latest, Nevada, Pension Reform  

View release as a PDF
CARSON CITY—Taxpayers United of America (TUA) today released estimated pension payouts for Carson City area and Nevada government employees. Nevada refuses to release actual government pensions, ignoring citizens’ right to review all payments funded by taxes. TUA calculated estimated pensions for government employees based on actual salaries of current government employees to shed light on the largess of the tightly guarded secret payouts.
“Nevada lawmakers and administrators are complicit in the corrupt system that allows money to be forced from the rank and file and given to politicians in the form of campaign contributions,” stated Rae Ann McNeilly, Director of Outreach for TUA.
“But it seems that some government officials are willing to protect the system by keeping it hidden from review. The costs of shielding the system from review, and ultimately, reform, are devastatingly high as cities around the country are buckling under the weight of their unfunded liabilities. Pension funds are the number one budgetary problem in the country.”
“While residents across Nevada face crushing taxes, falling home values, and double digit unemployment, and, at least according to some, another recession, government employees continue to receive lavish pensions funded by taxpayers who will never collect more than about $22,000 a year from Social Security.”
“Nevada has the highest pensions of the 14 states in which we have completed our pension studies, and yet it also suffers the highest unemployment rates and has been hardest hit by the housing crisis which is now facing a second round of foreclosures.”
“Heath Morrison, a Washoe County government school district superintendent, has an estimated annual pension of $199,548*, based on his actual annual gross of $259,153, with an estimated lifetime payout of $9,494,494.* ”
“Washoe County Medical Examiner, Ellen G. I. Clark, has a lifetime estimated payout of $8,368,037* with an estimated annual pension of $175,873*, based on her actual annual gross of $228,406.”
View pension amounts below:

“Nevada’s government pension systems are crushing middle class Nevadans. Replacing defined benefit pensions for all new government hires with social security and 401(k)s would eventually eliminate unfunded government pensions. Current government employees must increase their pension contributions to preserve their pension benefits and the retirement age needs to be raised to at least 67. Additionally, all members should pay for 50% of their healthcare premiums. We need a stable system that is fair to both taxpayers and beneficiaries or pension checks will stop coming,” added McNeilly.
*TUA submits FOIA requests for current employee salaries and estimates pensions based on the current pension laws. COLA 2.5% per year worked, after 2001 2.67%. New employees after 2010 only 2.5%. Assumptions: 30 years age 55 (age 60 for University Employees), 77% payout, COLA avg 3%. COLA is officially none for 3 years, 2% 4,5,6 then3% 7,8,9 then 3.5% 10,11,12 then 4% 13,14 then 5% after. However there is an adjustment made if the retirement at any given year exceeds what the accumulated CPI would be for the years retired so 3% as an average has been used. Maximum 90% if they started before 1985, 75% after 1985.

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Las Vegas Hides Staggering Government Pension Payments From Taxpayers

By on June 18, 2012   /   Latest, Nevada, Pension Reform  

View release as a PDF
LAS VEGAS—Taxpayers United of America (TUA) released estimated pension payouts for Las Vegas, North Las Vegas, Henderson and Clark County government employees. Nevada refuses to release actual government pensions, ignoring citizens’ right to review all payments funded by taxes. TUA calculated estimated pensions for government employees based on actual salaries of current government employees to shed light on the largess of the tightly guarded secret payouts.
“Nevada lawmakers and administrators are complicit in the corrupt system that allows money to be forced from the rank and file and given to politicians in the form of campaign contributions,” stated Rae Ann McNeilly, Director of Outreach for TUA.
“But it seems that some government officials are willing to protect the system by keeping it hidden from review. The costs of shielding the system from review, and ultimately, reform, are devastatingly high as cities around the country are buckling under the weight of their unfunded liabilities. Pension funds are the number one budgetary problem in the country.”
“While residents across Nevada face crushing taxes, falling home values, and double digit unemployment, and, at least according to some, another recession, government employees continue to receive lavish pensions funded by taxpayers who will never collect more than about $22,000 a year from Social Security.”
“Nevada has the highest pensions of the 14 states in which we have completed our pension studies, and yet it also suffers the highest unemployment rates and has been hardest hit by the housing crisis which is now facing a second round of foreclosures.”
McNeilly continued, “For example, Ricardo A. Bonvicin, North Las Vegas Corrections Lieutenant, will collect an estimated annual pension of $335,456* based on his actual annual gross of $435,658. His estimated lifetime pension payout is a staggering $15,961,017*.”
“Dwight D. Jones, a Clark County government school superintendent, has an estimated annual pension of $247,574*, based on his actual annual gross of $321,525, with an estimated lifetime payout of $11,779,583*. ”
View pension amounts below:

“Nevada’s government pension systems are crushing middle class Nevadans. Replacing defined benefit pensions for all new government hires with social security and 401(k)s would eventually eliminate unfunded government pensions. Current government employees must increase their pension contributions to preserve their pension benefits. Additionally, all members should pay for 50% of their healthcare premiums. We need a stable system that is fair to both taxpayers and beneficiaries or pension checks will stop coming,” added McNeilly.
*TUA submits FOIA requests for current employee salaries and estimates pensions based on the current pension laws. COLA 2.5% per year worked, after 2001 2.67%. New employees after 2010 only 2.5%. Assumptions: 30 years age 55 (age 60 for University Employees), 77% payout, COLA avg 3%. COLA is officially none for 3 years, 2% 4,5,6 then3% 7,8,9 then 3.5% 10,11,12 then 4% 13,14 then 5% after. However there is an adjustment made if the retirement at any given year exceeds what the accumulated CPI would be for the years retired so 3% as an average has been used. Maximum 90% if they started before 1985, 75% after 1985.

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