Assembly Bill No. 189–Committee on Government Affairs

(On Behalf of Public Employees’ Retirement System)

February 10, 1999

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Referred to Committee on Government Affairs

 

SUMMARY—Makes various changes to public employees’ retirement system. (BDR 23-786)

FISCAL NOTE: Effect on Local Government: Yes.

Effect on the State or on Industrial Insurance: Yes.

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).

 

AN ACT relating to the public employees’ retirement system; requiring certain members of the Nevada gaming commission to participate in the system; authorizing the system to calculate the elective service of certain members as regular service under certain circumstances; amending the benefit formula in certain circumstances; authorizing members to use money from various retirement plans for the purchase of service under certain circumstances; increasing certain survivor benefits; raising the amounts of certain minimum cumulative benefits; eliminating the requirement of marriage to receive benefits under certain circumstances; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

1-1 Section 1. NRS 286.025 is hereby amended to read as follows:

1-2 286.025 1. Except as otherwise provided by specific statute,

1-3 "compensation" is the salary paid to a member by his principal public

1-4 employer.

1-5 2. The term includes:

1-6 (a) Base pay, which is the monthly rate of pay excluding all fringe

1-7 benefits.

1-8 (b) Additional payment for longevity, shift differential, hazardous duty,

1-9 work performed on a holiday if it does not exceed the working hours of the

1-10 normal work week or pay period for that employee, holding oneself ready

1-11 for duty while off duty and returning to duty after one’s regular working

1-12 hours.

2-1 (c) Payment for extra duty assignments if it is the standard practice of

2-2 the public employer to include such pay in the employment contract or

2-3 official job description for the calendar or academic year in which it is paid

2-4 and such pay is specifically included in the member’s employment contract

2-5 or official job description.

2-6 (d) The aggregate compensation paid by two separate public employers

2-7 [,] if one member is employed half time or more by one, and half time or

2-8 less by the other, if the total does not exceed full-time employment [and] ,

2-9 if the duties of both positions are similar and if the employment is pursuant

2-10 to a continuing relationship between the employers.

2-11 3. The term does not include [:

2-12 (a) Payment for overtime, terminal leave or secondary employment.

2-13 (b) Payment for employment which is not eligible service.

2-14 (c) Except as provided in NRS 286.477, any bonus or additional salary

2-15 which is paid to an employee on account of his promise, express or

2-16 implied, to retire on a specified date or within a specified period, or any

2-17 bonus or additional salary paid to an employee predicated upon his

2-18 eligibility to retire whether promised or not. Failure to pay a like bonus or

2-19 additional salary to another employee in like circumstances who has not

2-20 promised so to retire creates a rebuttable presumption that payment to the

2-21 first employee was on account of his promise.] any type of payment not

2-22 specifically described in subsection 2.

2-23 Sec. 2. NRS 286.293 is hereby amended to read as follows:

2-24 286.293 1. The following employees of public employers shall

2-25 participate in the system:

2-26 [1.] (a) Those employed on or after July 1, 1977, in positions

2-27 considered to be half time or more according to the full-time work

2-28 schedule established for that public employer.

2-29 [2.] (b) Elected officials or persons appointed to elective positions who

2-30 are elected or appointed after July 1, 1975, except where excluded by NRS

2-31 286.297.

2-32 [3.] (c) A member whose allowance is vested or who is contributing

2-33 immediately before a legislative session who is employed on or after

2-34 January 1, 1981, by either house of the legislature or by the legislative

2-35 counsel bureau.

2-36 (d) A member of the Nevada gaming commission.

2-37 2. The board shall establish standards for determining what

2-38 constitutes a full-time work schedule pursuant to paragraph (a) of

2-39 subsection 1.

2-40 Sec. 3. NRS 286.300 is hereby amended to read as follows:

2-41 286.300 Except as otherwise required as a result of NRS 286.537:

2-42 1. Any member of the system may purchase all previous creditable

2-43 service performed with his present employing agency if that service was

3-1 performed before the enrollment of his agency in the system, even if the

3-2 service is still creditable in some other system where it cannot be canceled.

3-3 The public employer must certify the inclusive dates of employment and

3-4 number of hours regularly worked by the member to validate the service.

3-5 The member must pay the full actuarial cost as determined by the actuary.

3-6 2. In addition to the purchase authorized pursuant to the provisions of

3-7 subsection 1, any member who has 5 years of creditable service may

3-8 purchase up to 5 years of service. The member must pay the full actuarial

3-9 cost of the service as determined by an actuary of the system.

3-10 3. Any member of the system may use:

3-11 (a) All or any portion of the balance of the member’s interest in a

3-12 qualified trust pursuant to section 401(a) of the Internal Revenue Code,

3-13 26 U.S.C. § 401(a); or

3-14 (b) The money contained in an individual retirement account or an

3-15 individual retirement annuity of a member, the entire amount of which

3-16 is:

3-17 (1) Attributable to a qualified distribution from a qualified trust

3-18 pursuant to section 401(a) of the Internal Revenue Code, 26 U.S.C. §

3-19 401(a); and

3-20 (2) Qualified as an eligible rollover distribution pursuant to section

3-21 402 of the Internal Revenue Code, 26 U.S.C. § 402,

3-22 to purchase creditable service pursuant to subsection 1 or 2.

3-23 Sec. 4. NRS 286.470 is hereby amended to read as follows:

3-24 286.470 1. Except as otherwise required as a result of NRS 286.535

3-25 or 286.537, or as otherwise provided in subsection 3, average

3-26 compensation for service performed as a county commissioner,

3-27 councilman or mayor must be calculated as follows for those members

3-28 whose effective date of retirement is after May 19, 1975:

3-29 (a) Service retirement allowance for elective service must be computed

3-30 on the basis of the highest 36 consecutive months of elective service

3-31 multiplied by the percentage of average compensation earned during such

3-32 service.

3-33 (b) Service retirement allowance for regular service must be computed

3-34 on the basis of the highest 36 consecutive months of regular service

3-35 multiplied by the percentage of average compensation earned during such

3-36 service.

3-37 (c) The service retirement allowances for elective service and for

3-38 regular service are added together to provide the total unmodified service

3-39 retirement allowance earned by the member.

3-40 (d) Average compensation for service before July 1, 1977, is computed

3-41 from the sum of both salaries when a member is employed simultaneously

3-42 as a regular member and as a county commissioner, councilman or mayor.

4-1 2. A member who has service as a county commissioner, councilman

4-2 or mayor may, upon retirement, waive such service and have his

4-3 allowances computed as a regular member.

4-4 3. If a member who has service as a county commissioner,

4-5 councilman or mayor has an average salary for the entire period of

4-6 elective service that is equal to or greater than the average salary of a

4-7 member for regular service for the same period, the calculations required

4-8 pursuant to subsection 1 do not apply and the member must receive credit

4-9 for regular service.

4-10 Sec. 5. NRS 286.501 is hereby amended to read as follows:

4-11 286.501 Each member who is employed by a school district for less

4-12 than 12 months per school year and each member of the professional staff

4-13 of the University and Community College System of Nevada employed for

4-14 the academic year who is employed for less than 12 months per fiscal year

4-15 is credited with service as follows:

4-16 1. Service is credited on the basis of a full year if the member works

4-17 full time for the full school year.

4-18 2. Employment for a part of a school year is credited on a ratio of one

4-19 and one-third days for each day worked, but credit may not be given in

4-20 advance or until the appropriate period has expired.

4-21 3. A full year of service is not credited until the full 12-month period

4-22 has expired. If the employee begins work under a new contract before the

4-23 expiration of the 12-month period for the old contract, credit must be

4-24 granted for the period of overlap, as certified by the school district, at the

4-25 first period in which there is a lapse in service.

4-26 4. Service credit under this section must be computed according to:

4-27 (a) The school year [extending from September 1 to August 31] for

4-28 school district employees.

4-29 (b) The fiscal year for members of the professional staff of the

4-30 University and Community College System of Nevada.

4-31 5. A member receives full credit while on sabbatical leave if the public

4-32 employer certifies that the compensation and contributions reported for the

4-33 member are the same as if he were employed full time. If the employer

4-34 does not so certify, the member receives credit in the proportion that his

4-35 actual compensation bears to his previous compensation.

4-36 No member may receive less credit under this section than was provided

4-37 under the law in force when the credit was earned.

4-38 Sec. 6. NRS 286.525 is hereby amended to read as follows:

4-39 286.525 1. A retired employee who accepts employment in a

4-40 position eligible for membership may enroll in the system as of the

4-41 effective date of that employment. [If he so enrolls:] As of the date of

4-42 enrollment:

5-1 (a) He forfeits all retirement allowances for the duration of that

5-2 employment.

5-3 (b) [Upon termination of the employment, he] He is entitled to receive,

5-4 after the termination of the employment and upon written request, a

5-5 refund of all contributions made by him during the employment. Except as

5-6 otherwise required as a result of NRS 286.535 or 286.537, if he does not

5-7 request the refund and the duration of the employment was at least 6

5-8 months, he gains additional service credit for that employment and is

5-9 entitled to have a separate service retirement allowance calculated based on

5-10 his compensation and service, effective upon the termination of that

5-11 employment. If the duration of the employment was:

5-12 (1) Less than 5 years, the additional allowance must be added to his

5-13 original allowance and must be under the same option and designate the

5-14 same beneficiary as the original allowance.

5-15 (2) Five years or more, the additional allowance may be under any

5-16 option and designate any beneficiary in accordance with NRS 286.545.

5-17 2. The original service retirement allowance of such a retired

5-18 employee must not be recalculated based upon the additional service

5-19 credit, nor is he entitled to any of the rights of membership that were not in

5-20 effect at the time of his original retirement. The accrual of service credit

5-21 pursuant to this section is subject to the limits imposed by:

5-22 (a) NRS 286.551; and

5-23 (b) Section 415 of the Internal Revenue Code , [(] 26 U.S.C. § 415 , [),]

5-24 if the member’s effective date of membership is on or after January 1,

5-25 1990.

5-26 3. Except as otherwise required as a result of NRS 286.535 or

5-27 286.537, a retired employee who has been receiving a retirement

5-28 allowance and who is reemployed and [enrolls] is enrolled in the system

5-29 for at least 5 years may [elect to return all retirement allowances plus

5-30 interest from the date of return to employment to the date of repayment

5-31 and] have his additional credit for service added to his previous credit for

5-32 service. [If he chooses to do so, he shall be deemed a continuing employee

5-33 with a break in service. This election] This additional credit for service

5-34 must not apply to more than one period of employment after the original

5-35 retirement.

5-36 4. The survivor of a deceased member who had previously retired and

5-37 was rehired and enrolled in the system, who qualifies for benefits pursuant

5-38 to NRS 286.671 to 286.6793, inclusive, is eligible for the benefits based on

5-39 the service accrued through the second period of employment . [if the

5-40 member elected to receive his service retirement allowance without

5-41 modification.]

5-42 Sec. 7. NRS 286.667 is hereby amended to read as follows:

6-1 286.667 1. A retired employee whose service or disability retirement

6-2 allowance is payable from the police and firemen’s retirement fund is

6-3 entitled to receive his allowance without modification.

6-4 2. Upon the death of such a person, a person who was his spouse

6-5 [both] at the time of his retirement [and the time of his death] is entitled,

6-6 upon attaining the age of 50 years, to receive a benefit equal to 50 percent

6-7 of the allowance to which the retired employee was entitled.

6-8 3. This section does not apply to a person who:

6-9 (a) Begins receiving a service or disability retirement allowance or a

6-10 benefit from the police and firemen’s retirement fund before July 1, 1981.

6-11 (b) At the time of his retirement, elects one of the alternatives to an

6-12 unmodified retirement allowance.

6-13 4. Service performed after July 1, 1981, in positions other than as a

6-14 police officer or fireman, except military service, may not be credited

6-15 toward the benefit conferred by this section. A police officer or fireman

6-16 who has performed service which is not creditable toward this benefit may

6-17 elect to:

6-18 (a) Select a retirement option other than one permitted by this section;

6-19 (b) Receive the benefit conferred by this section [,] with a spouse’s

6-20 benefit reduced by a proportion equal to that which the service which is

6-21 not creditable bears to his total service; or

6-22 (c) Purchase the additional spouse’s benefit at the time he retires by

6-23 paying the full actuarial cost as computed for his situation by the actuary of

6-24 the system.

6-25 5. The entire cost of the benefit conferred by this section must be paid

6-26 by the employee. Each employer must adjust the salaries of its employees

6-27 who are eligible for the benefit to offset its cost to the employer.

6-28 Employers who adjust salaries pursuant to this subsection do not by doing

6-29 so violate any collective bargaining agreement or other contract.

6-30 Sec. 8. NRS 286.673 is hereby amended to read as follows:

6-31 286.673 1. Except as limited by NRS 286.6775, each child of a

6-32 deceased member is entitled to receive a cumulative benefit of at least

6-33 [$350] $400 per month, beginning on the first day of the month following

6-34 the member’s death.

6-35 2. Except as otherwise provided in subsections 3 and 4, payments to

6-36 any child cease on the last day of the month of:

6-37 (a) His adoption;

6-38 (b) His death;

6-39 (c) His marriage; or

6-40 (d) His attaining the age of 18 years.

6-41 3. These benefits may be paid to the child of a deceased member until

6-42 the last day of the month of his 23rd birthday if he was, at the time of the

7-1 member’s death, and continues thereafter to be, a full-time student in any

7-2 accredited:

7-3 (a) High school;

7-4 (b) Vocational or technical school; or

7-5 (c) College or university.

7-6 4. These benefits may be commenced or extended indefinitely beyond

7-7 a child’s 18th birthday if and so long as he is determined by the system to

7-8 be:

7-9 (a) Financially dependent; and

7-10 (b) Physically or mentally incompetent.

7-11 5. All benefits under this section may be paid by the system to the

7-12 child’s:

7-13 (a) Surviving parent; or

7-14 (b) Legal guardian.

7-15 6. The board shall establish uniform standards and procedures for

7-16 determining whether a child is:

7-17 (a) A full-time student;

7-18 (b) Financially dependent; and

7-19 (c) Physically or mentally incompetent.

7-20 Sec. 9. NRS 286.674 is hereby amended to read as follows:

7-21 286.674 1. The spouse of a deceased member is entitled to receive a

7-22 cumulative benefit of at least [$400] $450 per month. The payments must

7-23 begin on the first day of the month immediately following the death of the

7-24 member and must cease on the last day of the month in which the spouse

7-25 dies . [or remarries.] If payments cease before the total amount of

7-26 contributions made by the deceased member have been received by the

7-27 spouse, the surplus of contributions over payments received must be paid

7-28 to the spouse.

7-29 2. The benefits paid pursuant to this section are in addition to any

7-30 benefits paid pursuant to NRS 286.673.

7-31 Sec. 10. NRS 286.676 is hereby amended to read as follows:

7-32 286.676 1. Except as limited by subsections 3 and 4, the spouse of a

7-33 deceased member who had 10 or more years of accredited contributing

7-34 service is entitled to receive a monthly allowance equivalent to that

7-35 provided by:

7-36 (a) Option 3 in NRS 286.590, if the deceased member had less than [20]

7-37 15 years of service on the date of his death; or

7-38 (b) Option 2 in NRS 286.590, if the deceased member had more than

7-39 [20] 15 years of service on the date of his death.

7-40 [For purposes of applying] To apply the provisions of Options 2 and 3, the

7-41 deceased member shall be deemed to have retired on the date of his death

7-42 immediately after having named the spouse as beneficiary under the

7-43 applicable option. This benefit must be computed without any reduction

8-1 for age for the deceased member. The benefits provided by this subsection

8-2 must be paid to the spouse for the remainder of the spouse’s life.

8-3 2. The spouse may elect to receive the benefits provided by any one of

8-4 the following only:

8-5 (a) This section;

8-6 (b) NRS 286.674; or

8-7 (c) NRS 286.678.

8-8 3. The benefit payable to the spouse of a member who died before

8-9 May 19, 1975, is limited to a spouse who received at least 50 percent of his

8-10 support from the member during the 6 months immediately preceding the

8-11 member’s death and to the amounts provided in this subsection. [If, at the

8-12 time of his death, the member had 15 or more years of service, his spouse,

8-13 upon attaining the age of 60 years, may receive a cumulative benefit of at

8-14 least $400 per month or 50 percent of the average salary received by the

8-15 deceased member for the 3 consecutive highest salaried years of his last 10

8-16 years of service, whichever is less.] If, at the time of his death, the member

8-17 had [20] 15 or more years of service and did not elect an optional

8-18 retirement plan as offered in this chapter, his spouse, upon attaining the

8-19 age of 60 years, may receive a cumulative benefit of at least [$400] $450

8-20 per month or 50 percent of the average salary received by the member for

8-21 the 3 consecutive highest salaried years of his last 10 years of service,

8-22 whichever is less. Payments, or the right to receive payments, must cease

8-23 upon the death [or remarriage] of the spouse. Benefits under this section

8-24 are not renewable following termination.

8-25 4. The benefits provided by paragraph (a) of subsection 1 may only be

8-26 paid to the spouses of members who died on or after May 19, 1975.

8-27 Sec. 11. Notwithstanding the provisions of NRS 286.293, as amended

8-28 by section 2 of this act, any member of the Nevada gaming commission

8-29 who is appointed to the commission before July 1, 1999, may elect to

8-30 participate in the public employees’ retirement system on or before July

8-31 30, 1999. Such a member may not elect to become a member of the public

8-32 employees’ retirement system after July 30, 1999.

8-33 Sec. 12. The provisions of NRS 286.667, as amended by section 7 of

8-34 this act, apply to any person who is receiving benefits pursuant to that

8-35 section on July 1, 1999.

8-36 Sec. 13. 1. This section and sections 1, 2 and 4 to 12, inclusive, of

8-37 this act become effective on July 1, 1999.

8-38 2. Section 3 of this act becomes effective on July 1, 2000.

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