A Closer Look at Your PERS Benefits
Another PERS increase, and the largest increase in over 45 years. 8.75 percent split between LVMPD and you! 4.375 percent is a huge pay cut, especially after PERS just increased contributions in 2023 to 6 percent, costing all of us 3 percent of the 6 percent COLA that year. We say it all the time, but for the newer officers LVPPA does not negotiate your PERS in any way. Your pension benefits are determined by the state legislature every two years. This means you will not see an increase to your PERS contribution next year.
Every two years, the PERS Board of Directors (BOD) orders an actuarial study to be completed to determine the strength of our retirement for both regular PERS (civilian) and police and fire PERS. The information from that study tells the PERS BOD if there is a need to increase the rate or contribution to your PERS. For example, this past November the PERS BOD was mandated to raise the employer paid contribution from 50 percent to 58.75 percent, meaning your half of the PERS contribution will be 29.375 percent. This means your pay has been or is being reduced almost 30 percent over the years. Still confused? Let’s look at this in dollars.
For every $100 Metro pays you in reportable income, they must pay PERS $58.75. One half of this comes directly from a reduction in your rate of pay. Example: My rate of pay was $50.70 per hour. With the increase to the PERS contribution my new rate of pay will be $48.48. I know a lot of you feel like this is money lost forever, but it is not lost. Your contribution is simply deferred until retirement. All the contributions that are paid on your behalf are factored into your final pension benefit. Some call it a “kicker”; PERS calls it the “factor.” In simple terms, your retirement will go up 4.375 percent if you spend your high 36 months, while the contribution rate is 58.75 percent. The total kicker/factor is 29.375 percent added to
your retirement totals. You can also get part of the new rate factored into your retirement. For example, if you work for one year under the new contribution rate of 58.75 percent and the previous two years at the 50 percent rate, you would receive a blended rate of 52.92 percent. Note that these rates are recalculated on a daily basis. A few other things to know are the different groups of retirement benefits we fall into.
The first group are those hired prior to Jan. 1, 2010. These officers will receive 2.67 percent for each year of service completed after July 1, 2001, and 2.5 percent for each year completed prior to July 1, 2001, with a max benefit of 75 percent of their best 36 months of compensation. The next group P# 20103 are those hired from Jan.1, 2010 to June 30, 2015. These officers will receive 2.5 percent for each year of service, with a max benefit of 75 percent of their best 36 months of compensation. The last group are those hired on or after July 1, 2015. These officers will receive 2.5 percent for each year of service, with a max benefit of 75 percent of their best 36 months of compensation.
So, what’s the difference between the last two groups? The differences are between the time of eligibility to retire without penalty and the money that goes toward your pension (pensionable money, callback, callout, purchased time, etc.).
Each group has its own rules based on when you were hired. Note: If you were hired as a civilian employee in the NVPERS system, you can use your hire date from that employment to determine your police and fire eligibility. I don’t want to get too in-depth, but you can always ask a PERS counselor for help when you have questions regarding past employment, or you are welcome to call me directly to get some of your questions answered.
One final thing I want to clear up is the question, “Why do I have to work 33 and one-third years?” The answer: You don’t! This inaccurate information usually comes from the academy staff or an FTO. Math is simple: 2.5 percent per year for 30 years equals 75 percent. Someone is looking at the civilian language in PERS and confusing it with police and fire benefits. This is how rumors and bad information get started. Please call me with any questions regarding the new CBA language or questions about your PERS. Please be safe and thank you for your membership.