Study: Nevada teachers’ retirement benefits slashed a national-high 14 percent to offset PERS debt

Robert Fellner

By Robert Fellner

Nevada teachers are paying more to bail out their share of the nation’s combined $1.75 trillion in public pension debt than teachers in any other state, according to a just-released study by Manhattan Institute Senior Fellow Josh B. McGee.

In Feeling the Squeeze: Pension Costs Are Crowding Out Education Spending, McGee documents how rising pension costs have siphoned resources from vitally needed education services, particularly teachers’ salaries and retirement benefits.

Nationally, McGee found that “teachers earned retirement benefits worth about 1.01% of payroll less in 2015 than in 2005” as states reduced the size of retirement benefits offered to new hires in an attempt to slow down the growth of pension debt. Nevada teachers, however, saw their retirement benefits reduced by an amount worth 14.07% of total payroll — which was the largest reduction experienced by teachers of any state.

Making matters worse, this reduction in retirement benefits has occurred alongside an increase in the amount today’s teachers must pay to PERS —as NPRI previously reported here, here and here.

As the below chart makes clear, Nevada teachers are paying PERS more, while getting much less in return.

McGee correctly pins the blame for this inequity on irresponsible benefit enhancements that were passed in earlier years, without properly accounting for their added cost.

The particulars of Nevada’s experiences with these types of enhancements — which occurred incrementally during the 1990s before ultimately culminating with the 2001 Senate Bill 349 — can be found here.

PERS itself had lobbied on behalf of those enhancements in the past — with former CEO George Pyne advocating for the now universally-reviled practice of using short-term investment gains to pay for enhancements, as opposed to saving for the inevitable market downturn.

Today, however, even current CEO Tina Leiss has correctly warned the Board to be wary of any requests for new enhancements, citing their potential to carry unanticipated additional costs.

McGee concludes by stressing just how devastating these costs can be:

“Now the cost of paying for legacy-benefit promises to teachers for work in yesterday’s classrooms is crowding out the salaries and benefits of teachers entering classroom todays, with potentially negative implications for students.”

The full study can be downloaded from the Manhattan Institute’s website here.

For NPRI’s analyses of the Nevada PERS situation, visit:

Robert Fellner is the director of transparency for the Nevada Policy Research Institute, a nonpartisan, free-market think tank.

Robert Fellner

Robert Fellner

Policy Director

Robert Fellner joined the Nevada Policy in December 2013 and currently serves as Policy Director. Robert has written extensively on the issue of transparency in government. He has also developed and directed Nevada Policy’s public-interest litigation strategy, which led to two landmark victories before the Nevada Supreme Court. The first resulted in a decision that expanded the public’s right to access government records, while the second led to expanded taxpayer standing for constitutional challenges in Nevada.

An expert on government compensation and its impact on taxes, Robert has authored multiple studies on public pay and pensions. He has been published in Business Insider,, the Las Vegas Review-Journal, the Los Angeles Times, the Orange County Register,, the San Diego Union-Tribune, the Wall Street Journal, the Washington Examiner, and elsewhere.

Robert has lived in Las Vegas since 2005 when he moved to Nevada to become a professional poker player. Robert has had a remarkably successfully poker career including two top 10 World Series of Poker finishes and being ranked #1 in the world at 10/20 Pot-Limit Omaha cash games.

Additionally, his economic analysis on the minimum wage won first place in a 2011 George Mason University essay contest. He also independently organized a successful grassroots media and fundraising effort for a 2012 presidential candidate, before joining the campaign in an official capacity.