Lawsuit: Police union claims PERS lied about cost of retirement proposal
The Las Vegas Police Protective Association filed a lawsuit claiming the Nevada Public Employee’s Retirement System gave misleading information to lawmakers that a bill addressing retirement benefits would cost nearly $82 million.
The union, which covers the rank and file officers of the Metropolitan Police Department, worked with legislators to develop Assembly Bill 351, which would create a deferred retirement option program. The program would encourage police officers and firefighters to delay their retirements in exchange for obtaining retirement benefits while still working for the state agencies, according to a copy of the lawsuit obtained by the Review-Journal on Friday.
Steve Grammas, the president of the police union, said senior officers and firefighters who enrolled in the program would have their monthly retirement benefits put into a savings account that the employee could access as a lump sum when they stopped working. While the employee was in the program, their employer would continue to make contributions to the state pension fund, Grammas said.
Grammas, who is also named as a plaintiff in the lawsuit, said the union estimated the bill would not come with a significant cost to the state.
The Public Employees’ Retirement System, however, submitted a fiscal note to the Legislature estimating that the bill would cost more than $82 million throughout future fiscal years.
“Plaintiffs are informed and believe that the Defendants are aware that the information contained in the fiscal note is inaccurate and misleading,” the union’s attorneys, David Roger, Athony Sgro and Alanna Bondy, wrote in the lawsuit.
Ian Carr, the general counsel for the retirement system, said in a statement on Friday that the organization has not been served with a copy of the signed lawsuit, and cannot comment on the specifics of the lawsuit’s allegations.
Carr said that the agency relied on an “independent actuary” to generate the nearly $82 million cost estimate surrounding the bill. The actuary determined that the program would create a new long-term benefit for state employees, requiring a “change to the retirement assumption” and increased costs to the retirement system.
“The fiscal note was prepared using the cost projection provided by the actuary as applied to payroll into the future to account for the long-term nature of pension benefits and the System’s funding period,” Carr said in the statement, later adding that the organization “acted in good faith” when submitting the fiscal note.
According to the union’s lawsuit, the Legislature is not considering the bill because of the fiscal note. The bill has not been heard by the Assembly or Senate, but it is exempt from passage deadlines.
Assemblyman Toby Yurek, R-Henderson, said he had discouraged the police union from filing a lawsuit during the final weeks of the legislative session, because a lawsuit would “likely undermine any opportunity to further negotiate the bill.”
“I understand the LVPPA’s disappointment with this fiscal note,” Yurek said in a statement on Friday. “I had asked them to not bring a lawsuit like this during session, but again, I understand their frustration.”
Grammas said the bill was meant to encourage retention of officers among police agencies in Nevada, which he said have seen a decline in recruitment in recent years.
“We believe that it will absolutely keep officers on the job longer, and allow the police department to catch up on the vacancies that they’ve had through COVID and other issues,” Grammas said.
Contact Katelyn Newberg at knewberg@reviewjournal.com or 702-383-0240. Follow @k_newberg on Twitter.