(On Behalf of the Budget Division of the
Department of Administration)
March 13, 1997
____________
Referred to Committee on Finance
SUMMARY--Revises provisions governing amount of contribution and post-retirement increases for public employees' retirement system. (BDR 23-1450)
FISCAL NOTE: Effect on Local Government: Yes.
Effect on the State or on Industrial Insurance: Executive Budget.
EXPLANATION - Matter in italics is new; matter in brackets [ ] is material to be omitted.
AN ACT relating to the public employees' retirement system; increasing the additional annual percentage of allowances and benefits to which certain retired employees of the system may be entitled; increasing the rate of contribution to the system; and providing other matters properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1 NRS 286.5756 is hereby amended to read as follows:
286.5756 1. A person is entitled to the increase provided in this section if he began receiving an allowance or benefit:
(a) Before September 1, 1983, and has received the allowance or benefit for at least 6 continuous months in the 12 months preceding the effective date of the increase; or
(b) At least 3 years before the increase.
2. Except as otherwise provided in subsection 3, allowances or benefits increase once each year on the first day of the month immediately following the anniversary of the date the person began receiving the allowance or benefit, by the lesser of:
(a) Two percent following the [third] 3rd anniversary of the commencement of benefits, 3 percent following the [sixth] 6th anniversary of the commencement of benefits , [and] 3.5 percent following the [ninth] 9th anniversary of the commencement of benefits [; or] , 4 percent following the 12th anniversary of the commencement of benefits and 5 percent following the 14th anniversary of the commencement of benefits; or
(b) The average percentage of increase in the Consumer Price Index (All Items) for the 3 preceding years, unless a different index is substituted by the board.
3. In any event, the allowance or benefit of a member must be increased by the percentages set forth in paragraph (a) of subsection 2 if the allowance or benefit of a member has not increased at a rate greater than or equal to the average of the Consumer Price Index (All Items), unless a different index is substituted by the board, for the period between the date of his retirement and the date specified in subsection 2.
4. The board may use a different index for the calculation made pursuant to paragraph (b) of subsection 2 if:
(a) The substituted index is compiled and published by the United States Department of Labor; and
(b) The board determines that the substituted index represents a more accurate measurement of the cost of living for retired employees.
5. The base from which the increase provided by this section must be calculated is the allowance or benefit in effect on the day before the increase becomes effective.
Sec. 2 1. Notwithstanding any other law to the contrary, for the fiscal years 1997-98 and 1998-99, the rate of contribution for:
(a) Employees, other than police officers and firemen, whose contributions to the public employees' retirement system are paid pursuant to:
(1) NRS 286.410 is 10 percent for both the contribution paid by the employer and the contribution paid by the employee.
(2) NRS 286.421 is 18.75 percent for the total contribution paid by the employer.
(b) Police officers and firemen whose contributions to the public employees' retirement system are paid pursuant to:
(1) NRS 286.410 is 14.75 percent for both the contribution paid by the employer and the contribution paid by the employee.
(2) NRS 286.421 is 28.50 percent for the total contribution paid by the employer.
2. The public employees' retirement board shall, in determining the rates of contribution actuarially computed to be sufficient to pay for the allowances and benefits provided pursuant to chapter 286 of NRS, including the benefits provided by this act, apply rates of retirement at all ages of eligibility rather than assuming a single average age of retirement.
3. The legislature hereby finds and declares that:
(a) The change required pursuant to subsection 2 in the method of determining actuarially the required rates of contribution was recommended by the independent review of the biennial actuarial valuation of the public employees' retirement system that was made pursuant to chapter 641, Statutes of Nevada 1989.
(b) The independent review indicated that this change would save one-half of 1 percent in the required rates of contribution to the public employees' retirement system.
(c) The rates of contribution specified in subsection 1, in conjunction with the change required pursuant to subsection 2, are sufficient to ensure the actuarial soundness of the public employees' retirement system for the ensuing biennium.
(d) The legislature will review the results of the change required pursuant to subsection 2 to determine the effect of that change on the required rates of contribution and to ensure that the rates of contribution are sufficient to ensure the actuarial soundness of the system.
Sec. 3 This act becomes effective on July 1, 1997.