Nevada State Sen. Bob Coffin says he’s working on a proposal to reduce a $6 billion unfunded liability of Nevada’s public employees retirement system by setting a mandatory minimum retirement age similar to what’s used for Social Security.
Coffin, D-Las Vegas, also wants to require existing public employees who are either 10 or 15 years away from retirement age to work longer to obtain full retirement benefits.
The length of service required of new employees to qualify for full benefits should also be extended, possibly to 35 years, he said Thursday, adding that his idea is a work in progress and details should be firmed up within a month.
Current public employees covered by Coffin’s evolving proposal would have to stay on the job a little longer, possible a few months, before being eligible to retire with full benefits. If they chose to retire earlier, benefits would be slightly reduced, he said.
State employees now can retire at any age with 30 years of service, at age 60 with 10 years of service and at age 65 with five years of service. For each year of service, a state employee’s defined benefit pension is calculated at 2.67 percent. An employee retiring with 10 years would get an annual pension worth about 27 percent of his salary.
Coffin said the generous pension plan, which has even larger calculations for police and firefighters, needs to be reined in. One way to do this would be to require 35 years of service before getting full benefits, which also would not be available until an as yet unspecified minimum retirement age.
Social Security recipients get full benefits depending on when they were born. For most baby boomers, that age is 66. Nevada public employees covered by their own plan don’t contribute to Social Security.
Coffin said Nevada’s public employee pension plan was enhanced in 1989. It was part of a package that also improved the retirement plan for state lawmakers. A public outcry led to the repeal of the infamous “300 percent” pension increase for the lawmakers, but the liberal changes to the public employee retirement system were preserved, Coffin said.
By making the changes being considered by Coffin, the PERS pension plan would see less of a drawdown on benefits and more contributions from public agency employers and employees, helping to ensure its solvency.
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