The Senate Finance Committee struggled Wednesday evening over how to help non-state retirees who depend on the state benefits plan without hitting the plan’s state workers and retirees with added charges.
Senate Bill 34 proposes bringing those 3,200 or so retirees into the main employee-retiree pool. But Public Employee Benefits Executive Officer Jim Wells said his board opposes that because it would raise costs for every state worker and retiree by $40 a month.
He said, however, those non-state retirees are facing skyrocketing benefit premiums because there are no active employees left in that pool. The separate non-state pool was created in 2003 and, at that time, had a significant number of active workers to balance against retirees and keep rates down. Since then, however, local governments have moved their active members out of it and into plans that cost them less. They can get lower rates because existing statute lets them leave their retirees — who are much more expensive to insure because of age — behind with the state.
“It’s a retiree pool,” he said noting that, of the more than 3,200 there, just a dozen are active workers.
As a result, rates continue to rise every year.
One of those retirees, Joan Rassler, said her premiums have risen from $129.52 a month in 2008 to $1,019 this coming year. Retiree Peggy Bowen said hers went from $46,39 in 2010 to $342.12 next year.
Wells said insuring those retirees inside the state pool would cost about $8 million a year — three quarters from the state and the remaining $2 million from employees and retirees themselves.
One option, he said, is to pass a law allowing those retirees to go back to the school districts and other non-state public entities where they originally worked. Some, including the Clark County School District Trust, say they won’t take them back.
Wells said existing statute allows them to go back but whether the state can force that to happen that would have to be worked out with legal counsel.
He said doing nothing for those retirees isn’t a good option because they will lend up unable to afford health benefits.
The committee took no action on SB34.