Nevada’s Public Employee Retirement Plan Saw Improvement In 2012
Submitted by Nevada News Bureau on Mon, 11/19/2012 - 3:22pm
CARSON CITY – The long-term unfunded liability of Nevada’s public employee retirement plan improved slightly in fiscal year 2012, up to 71 percent fully funded from 70.2 percent in the previous year, a state official said today.
The plan saw the modest improvement even though the return on investment for the fiscal year was only 2.9 percent. The small gain came after a record 21 percent investment gain in 2011.
The 2012 return was still better than the median gain of 1.15 percent for public pension plans in fiscal year 2012 reported earlier this year by Wilshire Associates.
Dana Bilyeu, executive officer of the Public Employees’ Retirement System, said the plan, which covers nearly all of Nevada’s local and state public employees, had assets of $27.4 billion as of June 30, 2012, up from $25.8 billion in 2011.
PERS Executive Officer Dana Bilyeu.
The unfunded liability dollar value increased as well, however, to $11.2 billion from $11 billion.
The numbers and percentages reflect the combined plans for regular public employees and police and fire fighters.
At its high point in 2000 Nevada’s public employee retirement plan was 85 percent funded.
The long-term unfunded liabilities of the PERS plan, and of public employee pension plans nationwide, are generating concern from policy makers, although Nevada’s plan is considered to be well managed and in better fiscal shape than many others around the country.
Nevada Gov. Brian Sandoval has advocated for a change to the pension plan for future workers from a defined benefit to a 401(k)-style defined contribution plan. Defined contribution plans eliminate any unfunded fiscal liability for states. The 2011 Legislature took no action on the issue but it is expected to resurface in 2013.
The financial health of Nevada’s public employee pension plan was found to be cause for serious concern because it was only 70 percent funded as of fiscal year 2010, the Pew Center on the States said in June. The funding ratio in Nevada is below the 80 percent benchmark that fiscal experts recommend for a sustainable program.
In response to the report, Bilyeu said in June the heavy reliance by Pew on the funding ratio for the state rankings presents an incomplete picture.
Nevada’s contribution rates, which will increase again in the next two-year budget, are based on an analysis by an independent actuary, and are fully funded each year, she said.
PERS manages retirement benefits for about 100,000 active government workers and more than 40,000 retirees.
