Senate Bill No. 349–Committee on Finance

 

(On Behalf of Public Employees’ Retirement System)

 

March 14, 2001

____________

 

Referred to Committee on Finance

 

SUMMARY—Makes various changes regarding public employees’ retirement system. (BDR 23‑752)

 

FISCAL NOTE:                     Effect on Local Government: Yes.

                                    Effect on the State: Yes.

 

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to the public employees’ retirement system; decreasing the number of years of service required for vesting; revising the formula for calculating retirement allowances; providing for benefits for a survivor beneficiary in 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. Chapter 286 of NRS is hereby amended by adding thereto a

1-2  new section to read as follows:

1-3    An unmarried member may designate, in writing, a survivor

1-4  beneficiary to receive the payments provided pursuant to NRS 286.674,

1-5  286.676 or 286.6765 if the member is unmarried on the date of his death.

1-6  A designation pursuant to this section must be made on a form approved

1-7  by the executive officer.

1-8    Sec. 2.  NRS 286.510 is hereby amended to read as follows:

1-9    286.510  1.  Except as otherwise provided in subsections 2 and 3, a

1-10  member of the system is eligible to retire at age 65 if he has at least [5] 3

1-11  years of service, at age 60 if he has at least 10 years of service[,] and at

1-12  any age if he has at least 30 years of service.

1-13    2.  A police officer or fireman is eligible to retire at age 65 if he has at

1-14  least [5] 3 years of service, at age 55 if he has at least 10 years of service,

1-15  at age 50 if he has at least 20 years of service[,] and at any age if he has at

1-16  least [30] 25 years of service. Only service performed in a position as a

1-17  police officer or fireman, established as such by statute or regulation,

1-18  service performed pursuant to subsection 3 and credit for military service,

2-1  may be counted toward eligibility for retirement pursuant to this

2-2  subsection.

2-3    3.  Except as otherwise provided in subsection 4, a police officer or

2-4  fireman who has at least [5] 3 years of service as a police officer or fireman

2-5  and is otherwise eligible to apply for disability retirement pursuant to NRS

2-6  286.620 because of an injury arising out of and in the course of his

2-7  employment remains eligible for retirement pursuant to subsection 2 if:

2-8    (a) He applies to the board for disability retirement and the board

2-9  approves his application;

2-10    (b) In lieu of a disability retirement allowance, he accepts another

2-11  position with the public employer with which he was employed when he

2-12  became disabled as soon as practicable but not later than 90 days after the

2-13  board approves his application for disability retirement;

2-14    (c) He remains continuously employed by that public employer until he

2-15  becomes eligible for retirement pursuant to subsection 2; and

2-16    (d) After he accepts a position pursuant to paragraph (b), his

2-17  contributions are paid at the rate that is actuarially determined for police

2-18  officers and firemen until he becomes eligible for retirement pursuant to

2-19  subsection 2.

2-20    4.  If a police officer or fireman who accepted another position with the

2-21  public employer with which he was employed when he became disabled

2-22  pursuant to subsection 3 ceases to work for that public employer before

2-23  becoming eligible to retire pursuant to subsection 2, he may begin to

2-24  receive a disability retirement allowance without further approval by the

2-25  board by notifying the board on a form prescribed by the board.

2-26    5.  Eligibility for retirement, as provided in this section, does not

2-27  require the member to have been a participant in the system at the

2-28  beginning of his credited service.

2-29    6.  Any member who has the years of creditable service necessary to

2-30  retire but has not attained the required age, if any, may retire at any age

2-31  with a benefit actuarially reduced to the required retirement age. Except as

2-32  otherwise required as a result of NRS 286.537, a retirement benefit under

2-33  this subsection must be reduced by 4 percent of the unmodified benefit for

2-34  each full year that the member is under the appropriate retirement age, and

2-35  an additional 0.33 percent for each additional month that the member is

2-36  under the appropriate retirement age. Any option selected under this

2-37  subsection must be reduced by an amount proportionate to the reduction

2-38  provided in this subsection for the unmodified benefit. The board may

2-39  adjust the actuarial reduction based upon an experience study of the system

2-40  and recommendation by the actuary.

2-41    Sec. 3.  NRS 286.551 is hereby amended to read as follows:

2-42    286.551  Except as otherwise required as a result of NRS 286.535 or

2-43  286.537:

2-44    1.  Except as otherwise provided in this subsection[,] and subsection

2-45  5, a monthly service retirement allowance must be determined by

2-46  multiplying a member’s average compensation by 2.5 percent for each year

2-47  of service[,] earned before July 1, 2001, and 2.6 percent for each year of

2-48  service earned on or after July 1, 2001, except that a member:

3-1    (a) Who has an effective date of membership on or after July 1, 1985, is

3-2  entitled to a benefit of not more than 75 percent of his average

3-3  compensation with his eligibility for service credit ceasing at 30 years of

3-4  service.

3-5    (b) Who has an effective date of membership before July 1, 1985, and

3-6  retires on or after July 1, 1977, is entitled to a benefit of not more than 90

3-7  percent of his average compensation with his eligibility for service credit

3-8  ceasing at 36 years of service.

3-9  In no case may the service retirement allowance determined pursuant to

3-10  this section be less than the allowance to which the retired employee would

3-11  have been entitled under the provisions of this section which were in effect

3-12  on the day before July 3, 1991.

3-13    2.  For the purposes of this section, except as otherwise provided in

3-14  subsection 3, “average compensation” means the average of a member’s 36

3-15  consecutive months of highest compensation as certified by the public

3-16  employer.

3-17    3.  The average compensation of a member who has a break in service

3-18  or partial months of compensation, or both, as a result of service as a

3-19  legislator during a regular or special session of the Nevada legislature must

3-20  be calculated on the basis of the average of his 36 consecutive months of

3-21  highest compensation as certified by his public employer excluding each

3-22  month during any part of which the legislature was in session. This

3-23  subsection does not affect the computation of years of service.

3-24    4.  The retirement allowance for a regular part-time employee must be

3-25  computed from the salary which he would have received as a full-time

3-26  employee if it results in greater benefits for the employee. A regular part-

3-27  time employee is a person who works half time or more, but less than full

3-28  time:

3-29    (a) According to the regular schedule established by the employer for

3-30  his position; and

3-31    (b) Pursuant to an established agreement between the employer and the

3-32  employee.

3-33    5.  The monthly service retirement allowance calculated pursuant to

3-34  this section of a member who was not employed by a participating public

3-35  employer during the period immediately preceding his retirement must be

3-36  increased by an amount that is equal to the amount calculated by

3-37  multiplying the unmodified benefit of the member by 1 percent

3-38  compounded annually for each year, prorated for fractions of a year,

3-39  between the date on which the member ceased his last employment with a

3-40  participating public employer and the date of his retirement.

3-41    Sec. 4.  NRS 286.620 is hereby amended to read as follows:

3-42    286.620  1.  A member of the system who has [5] 3 years or more of

3-43  service credit and who becomes totally unable to perform his current job or

3-44  any comparable job for which he is qualified by his training and

3-45  experience, because of injury or mental or physical illness of a permanent

3-46  nature is eligible to apply for disability retirement if:

3-47    (a) Except as otherwise provided in subsection 5, his employment will

3-48  be terminated because of the disability;

4-1    (b) He is in the employ of a participating public employer at the time of

4-2  application for disability retirement;

4-3    (c) He proves that his disability renders him unable to perform the

4-4  duties of his present position and of any other position he has held within

4-5  the past year;

4-6    (d) He files a notarized application for disability retirement with the

4-7  system which indicates a selection of option and to which is attached a

4-8  personal statement by the member, describing the disability, the duties

4-9  which he can and cannot perform, and any benefits he is entitled to receive

4-10  for disability from any other public source;

4-11    (e) The public employer files an official statement certifying the

4-12  member’s employment record, job description, work evaluations, record of

4-13  disability and absences that have occurred because of the disability; and

4-14    (f) The immediate supervisor of the member files an official statement

4-15  regarding the effect upon the work of the member after the disability, job

4-16  functions that can and cannot be performed because of the disability, and

4-17  whether or not there are alternative jobs that can be performed by the

4-18  member.

4-19    2.  Except as otherwise required as a result of NRS 286.537, the

4-20  amount of the disability retirement allowance must be calculated in the

4-21  same manner as provided for service retirement calculations in NRS

4-22  286.551, except that no reduction for the member’s age may be made and

4-23  that the allowance must be reduced by the amount of any other benefit

4-24  received from any source on account of the same disability:

4-25    (a) If the benefit is provided or was purchased by the expenditure of

4-26  money by a Nevada public employer; and

4-27    (b) To the extent that the total of the unmodified benefit and the other

4-28  benefit would otherwise exceed his average compensation.

4-29    3.  A member may apply for disability retirement even if he is eligible

4-30  for service retirement.

4-31    4.  Each child of a deceased recipient of a disability retirement

4-32  allowance is entitled to receive the benefits provided by NRS 286.673 only

4-33  if the decedent had not reached the age and completed the service required

4-34  to be eligible for a service retirement allowance, except that these benefits

4-35  must not be paid to anyone who is named as a beneficiary under one of the

4-36  options to an unmodified allowance.

4-37    5.  If a member whose application for disability retirement has been:

4-38    (a) Approved, dies before his employment is terminated, but within 60

4-39  days after his application was approved; or

4-40    (b) Mailed before his death as indicated by the date of the postmark

4-41  dated by the post office on the envelope in which it was mailed, dies before

4-42  the board has acted upon his application and the board approves thereafter

4-43  his application,

4-44  his beneficiary is entitled to receive an allowance under the option selected

4-45  rather than the benefit otherwise provided for a survivor.

4-46    6.  The termination or adjustment of a disability retirement allowance

4-47  resulting from the death of a recipient of an allowance pursuant to this

4-48  section must not become effective until the first day of the month

4-49  immediately following the death of the recipient.

5-1    Sec. 5.  NRS 286.671 is hereby amended to read as follows:

5-2    286.671  As used in NRS 286.671 to 286.679, inclusive[:] and section

5-3  1 of this act:

5-4    1.  “Child” means an unmarried person under 18 years of age who is

5-5  the issue or legally adopted child of a deceased member. As used in this

5-6  subsection, “issue” means the progeny or biological offspring of the

5-7  deceased member.

5-8    2.  “Dependent parent” means the surviving parent of a deceased

5-9  member who was dependent upon the deceased member for at least 50

5-10  percent of his support for at least 6 months immediately preceding the

5-11  death of the deceased member.

5-12    3.  “Spouse” means the surviving husband or wife of a deceased

5-13  member.

5-14    4.  “Survivor beneficiary” means a person designated pursuant to

5-15  section 1 of this act.

5-16    Sec. 6.  NRS 286.672 is hereby amended to read as follows:

5-17    286.672  1.  Except as otherwise provided in subsection 3, if a

5-18  deceased member had 2 years of accredited contributing service in the
2 1/2 years immediately preceding his death or was a regular, part-time

5-19  employee who had 2 or more years of creditable contributing service

5-20  before and at least 1 day of contributing service within 6 months

5-21  immediately preceding his death, or if the employee had 10 or more years

5-22  of accredited contributing service, certain of his dependents , including,

5-23  without limitation, his survivor beneficiary, are eligible for payments as

5-24  provided in NRS 286.671 to 286.679, inclusive[.] , and section 1 of this

5-25  act. If the death of the member resulted from a mental or physical

5-26  condition which required him to leave the employ of a participating public

5-27  employer or go on leave without pay, eligibility pursuant to the provisions

5-28  of this section extends for 18 months after his termination or

5-29  commencement of leave without pay.

5-30    2.  If the death of a member occurs while he is on leave of absence

5-31  granted by his employer for further training and if he met the requirements

5-32  of subsection 1 at the time his leave began, certain of his dependents ,

5-33  including, without limitation, his survivor beneficiary, are eligible for

5-34  payments as provided in subsection 1.

5-35    3.  If the death of a member is caused by an occupational disease or an

5-36  accident arising out of and in the course of his employment, no prior

5-37  contributing service is required to make his dependents , including,

5-38  without limitation, his survivor beneficiary, eligible for payments under

5-39  NRS 286.671 to 286.679, inclusive, and section 1 of this act, except that

5-40  this subsection does not apply to an accident occurring while the member is

5-41  traveling between his home and his principal place of employment or to an

5-42  accident or occupational disease arising out of employment for which no

5-43  contribution is made.

5-44    Sec. 7.  NRS 286.674 is hereby amended to read as follows:

5-45    286.674  1.  The spouse or survivor beneficiary of a deceased

5-46  member is entitled to receive a cumulative benefit of at least $450 per

5-47  month. The payments must begin on the first day of the month immediately

5-48  following the death of the member and must cease on the last day of the

6-1  month in which the spouse or survivor beneficiary dies. If payments cease

6-2  before the total amount of contributions made by the deceased member

6-3  have been received by the spouse[,] or survivor beneficiary, the surplus of

6-4  contributions over payments received must be paid to the spouse[.] or

6-5  survivor beneficiary.

6-6    2.  The benefits paid pursuant to this section are in addition to any

6-7  benefits paid pursuant to NRS 286.673.

6-8    Sec. 8.  NRS 286.676 is hereby amended to read as follows:

6-9    286.676  1.  Except as limited by subsections 3 and 4, the spouse or

6-10  survivor beneficiary of a deceased member who had 10 or more years of

6-11  accredited contributing service is entitled to receive a monthly allowance

6-12  equivalent to that provided by:

6-13    (a) Option 3 in NRS 286.590, if the deceased member had less than 15

6-14  years of service on the date of his death; or

6-15    (b) Option 2 in NRS 286.590, if the deceased member had more than 15

6-16  years of service on the date of his death.

6-17  To apply the provisions of Options 2 and 3, the deceased member shall be

6-18  deemed to have retired on the date of his death immediately after having

6-19  named the spouse or survivor beneficiary as beneficiary under the

6-20  applicable option. This benefit must be computed without any reduction for

6-21  age for the deceased member. The benefits provided by this subsection

6-22  must be paid to the spouse or survivor beneficiary for the remainder of the

6-23  [spouse’s life.] life of the spouse or survivor beneficiary.

6-24    2.  The spouse or survivor beneficiary may elect to receive the benefits

6-25  provided by any one of the following only:

6-26    (a) This section;

6-27    (b) NRS 286.674; or

6-28    (c) NRS 286.678.

6-29    3.  The benefit payable to the spouse of a member who died before

6-30  May 19, 1975, is limited to a spouse who received at least 50 percent of his

6-31  support from the member during the 6 months immediately preceding the

6-32  member’s death and to the amounts provided in this subsection. If, at the

6-33  time of his death, the member had 15 or more years of service and did not

6-34  elect an optional retirement plan as offered in this chapter, his spouse, upon

6-35  attaining the age of 60 years, may receive a cumulative benefit of at least

6-36  $450 per month or 50 percent of the average salary received by the

6-37  member for the 3 consecutive highest salaried years of his last 10 years of

6-38  service, whichever is less. Payments, or the right to receive payments, must

6-39  cease upon the death of the spouse. Benefits under this section are not

6-40  renewable following termination.

6-41    4.  The benefits provided by paragraph (a) of subsection 1 may only be

6-42  paid to [the spouses of members] :

6-43    (a) The spouse of a member who died on or after May 19, 1975.

6-44    (b) The survivor beneficiary of a member who died on or after

6-45  January 1, 2002.

6-46    Sec. 9.  NRS 286.6765 is hereby amended to read as follows:

6-47    286.6765  1.  Except as limited by subsection 2, the spouse or

6-48  survivor beneficiary of a deceased member who was fully eligible to retire,

6-49  both as to service and age, is entitled to receive a monthly allowance

7-1  equivalent to that provided by option 2 in NRS 286.590. This section does

7-2  not apply to the spouse or survivor beneficiary of a member who was

7-3  eligible to retire only under subsection 6 of NRS 286.510. For the purposes

7-4  of applying the provisions of option 2, the deceased member shall be

7-5  deemed to have retired on the date of his death immediately after having

7-6  named the spouse or survivor beneficiary as beneficiary under option 2.

7-7  The benefits provided by this section must be paid to the spouse or

7-8  survivor beneficiary for the remainder of the [spouse’s life.] life of the

7-9  spouse or survivor beneficiary. The spouse or survivor beneficiary may

7-10  elect to receive the benefits provided by any one of the following only:

7-11    (a) This section;

7-12    (b) NRS 286.674;

7-13    (c) NRS 286.676; or

7-14    (d) NRS 286.678.

7-15    2.  The benefits provided by this section may only be paid to [the

7-16  spouses of members] :

7-17    (a) The spouse of a member who died on or after May 19, 1975.

7-18    (b) The survivor beneficiary of a member who died on or after

7-19  January 1, 2002.

7-20    Sec. 10.  NRS 286.678 is hereby amended to read as follows:

7-21    286.678  Any spouse or survivor beneficiary eligible for payments

7-22  under the provisions of NRS 286.674 or 286.676 may elect to waive

7-23  payment of a monthly allowance and to receive instead in a lump sum a

7-24  refund of all contributions to the public employees’ retirement fund or the

7-25  police and firemen’s retirement fund made by a deceased member plus any

7-26  contributions made by a public employer in lieu of the employee’s

7-27  contributions, but if more than one person is eligible for benefits on

7-28  account of the contributions of any one deceased member, no such lump-

7-29  sum payment may be made.

7-30    Sec. 11.  NRS 286.6793 is hereby amended to read as follows:

7-31    286.6793  1.  [Retirement allowances for members who are] The

7-32  retirement allowance for a member who:

7-33    (a) Ceased being an active member before July 1, 1989, vested on the

7-34  date that the employee completed 10 years of accredited contributing

7-35  service;

7-36    (b) Was an active member on or after July 1, 1989, but ceased being

7-37  an active member before July 1, 2001, vested on the date that the

7-38  employee completed 5 years of accredited contributing service; and

7-39    (c) Is active on or after July 1, [1989, become] 2001, becomes vested on

7-40  the date that the employee completes [5] 3 years of accredited contributing

7-41  service.

7-42    2.  Benefits for survivors offered pursuant to this chapter become

7-43  vested on the date that the employee completes 10 years of accredited

7-44  contributing service or becomes entitled to begin receiving benefits or on

7-45  the date of his death, whichever event occurs first.

7-46    3.  Unless otherwise specifically provided by the amendatory act, any

7-47  change in the provisions of this chapter is retroactive for all service of any

7-48  member before the date of vesting, but no change may impair any vested

7-49  allowance or benefit.

8-1    4.  [Any person employed by the state or its political subdivisions who

8-2  is a participating member of the system on or after July 1, 1989, who has

8-3  been employed for a period of 5 or more years, who leaves the employ of

8-4  the state or its political subdivisions before the attainment of the minimum

8-5  service retirement age and who has not received a refund of his employee

8-6  contributions, upon reaching the minimum service retirement age

8-7  applicable to his years of service credit, may receive the same benefits to

8-8  which he would otherwise have been entitled had he continued

8-9  membership in the system.

8-10    5.] Upon the termination or partial termination of the system:

8-11    (a) Except as otherwise provided in paragraph (b), all accrued benefits

8-12  that are funded become 100 percent vested and nonforfeitable.

8-13    (b) A member who receives his vested accrued benefits in a complete

8-14  cash distribution before the termination is not entitled to the vesting of any

8-15  benefits which have been forfeited.

8-16    Sec. 12.  NRS 2.070 is hereby amended to read as follows:

8-17    2.070  1.  If a justice of the supreme court at the time of his death had

8-18  retired and was then receiving a pension under the provisions of NRS

8-19  2.060, or if at the time of his death the justice had not retired but had

8-20  performed sufficient service for retirement under the provisions of NRS

8-21  2.060, the surviving spouse, if the spouse has attained the age of 60 years,

8-22  is entitled, until his death or remarriage, to receive monthly payments of

8-23  $2,500 per month.

8-24    2.  If a surviving spouse of a justice is not eligible to receive benefits

8-25  pursuant to subsection 1, he is entitled, until his death or remarriage or

8-26  until he becomes eligible to receive those benefits, to receive payments

8-27  equal in amount to the payment provided in subsection 1 of NRS 286.674

8-28  for the spouse or survivor beneficiary of a deceased member of the public

8-29  employees’ retirement system.

8-30    3.  To obtain these benefits, the surviving spouse must make

8-31  application to the board, commission or authority entrusted with the

8-32  administration of the judges’ pensions and furnish such information as may

8-33  be required pursuant to reasonable regulations adopted for the purpose of

8-34  carrying out the intent of this section.

8-35    4.  Any person receiving a benefit pursuant to the provisions of this

8-36  section is entitled to receive post-retirement increases equal to those

8-37  provided for persons retired under the public employees’ retirement

8-38  system.

8-39    5.  It is the intent of this section that no special fund be created for the

8-40  purpose of paying these benefits, and all payments made under the

8-41  provisions of this section are to be made out of and charged to any fund

8-42  created for the purpose of paying pension benefits to justices of the

8-43  supreme court.

8-44    Sec. 13.  NRS 3.095 is hereby amended to read as follows:

8-45    3.095  1.  If a district judge at the time of his death had retired and

8-46  was then receiving a pension under the provisions of NRS 3.090, or if at

8-47  the time of his death the judge had not retired but had performed sufficient

8-48  service for retirement under the provisions of NRS 3.090, the surviving

9-1  spouse, if the spouse has attained the age of 60 years, is entitled, until his

9-2  death or remarriage, to receive monthly payments of $2,500 per month.

9-3    2.  If a surviving spouse of a judge is not eligible to receive benefits

9-4  pursuant to subsection 1, he is entitled, until his death or remarriage or

9-5  until he becomes eligible to receive those benefits, to receive payments

9-6  equal in amount to the payment provided in subsection 1 of NRS 286.674

9-7  for the spouse or survivor beneficiary of a deceased member of the public

9-8  employees’ retirement system.

9-9    3.  To obtain these benefits, the surviving spouse must make

9-10  application to the board, commission or authority entrusted with the

9-11  administration of the judges’ pensions and furnish such information as may

9-12  be required pursuant to reasonable regulations adopted for the purpose of

9-13  carrying out the intent of this section.

9-14    4.  Any person receiving a benefit pursuant to the provisions of this

9-15  section is entitled to receive post-retirement increases equal to those

9-16  provided for persons retired under the public employees’ retirement

9-17  system.

9-18    5.  It is the intent of this section that no special fund be created for the

9-19  purpose of paying these benefits, and all payments made under the

9-20  provisions of this section are to be made out of and charged to any fund

9-21  created for the purpose of paying pension benefits to district judges.

9-22    Sec. 14.  1.  This section and sections 2, 4 and 11 of this act become

9-23  effective on July 1, 2001.

9-24    2.  Sections 1, 3, 5 to 10, inclusive, 12 and 13 of this act become

9-25  effective on January 1, 2002.

 

9-26  H