Las Vegas police face a 2% cut in take-home pay thanks to planned increase in retirement contributions, union says — but they won't go on strike. What would you do in this situation?

“Due to the fear of retaliation, rather than support for the officers by their immediate leadership, we made the decision to ask our members to continue to work and allow the PPA, through newly expanded contract negotiations, to fight and get the pay cut fixed so officers do not lose a single penny of pay,” Steve Grammas, the union’s president, told the publication in a story published July 3.

Here are the details behind the contribution changes, why it could mean a pay cut for officers and how it all came to this.

Increased contribution rate

In November, the state-run Public Employees’ Retirement System (PERS) decided to increase the contribution rate for Nevada police and fire employees up from 50% of gross pay to 58.75%. Contributions are shared equally between employees and employers. Combined with a 2.6% cost-of-living pay increase also taking effect, Grammas told the Journal-Review that take-home pay for officers would decrease by around 2% starting July 18.

The figures prompted the union to poll its members, asking them to consider actions that would result in work disruptions starting July 4. But, the union opted to negotiate.

The PERS program gives participants guaranteed income for life after they retire. Ideally, contributions and investment earnings would cover pension payouts, but that hasn’t been the case for decades, reports the Journal-Review. As of fiscal year 2024, the system was only around 75% funded with an unfunded liability of $20 billion.

To address this shortfall, PERS has increased its contribution rates, and since local governments have to pitch in their half, it leaves them less money to boost take-home pay. Local broadcaster 8 News Now also reports a struggle to keep up with pay and retirement benefits has led to a staffing crunch, a situation that can further impact contributions.

How can you budget to deal with a pay decrease?

In a situation like this, where employees receive a haircut to their take-home pay through no fault of their own, there may be a few options available to try to deal with the issue, including:

• Transferring to a location where contributions aren’t so high or looking for a job elsewhere that has better terms for employees
• Working overtime to make more money to make up for the pay decrease, or starting a side-gig
• Finding cuts to make in your budget, such as dining out less, cutting a streaming service or trimming other non-essential expenses
• If you work a union job, press leadership to negotiate better terms

None of these options are ideal, but if you need to make up for lost income, they may be among the few choices workers have.