Nevada PERS investments improve

CARSON CITY — The Nevada’s Public Employees Retirement System saw a 12.4 percent increase in value in the fiscal year that ended June 30, beating its 8 percent goal and bringing the total assets to $28.7 billion, an official with the agency said Tuesday.

The double-digit return on investment, after fees are paid to fund managers, increased the retirement fund assets by $2.9 billion in fiscal year 2013, said PERS Executive Officer Dana Bilyeu.

The fund is invested primarily in stocks and bonds but has other investments including real estate.

The 2013 return followed a 2.9 percent gain in 2012, a record 21 percent gain in 2011 and a 10.8 percent return in 2010.

The annualized return for the fund for the past 29 years, including 2013, is now at 9.3 percent, above the 8 percent target, she said.

As to how the return has affected the long-term unfunded liability of the retirement plan, that won’t be known until November when the valuation process is completed and reported to the PERS board.

The long-term unfunded liability improved slightly in the previous fiscal year, up to 71 percent fully funded in 2012 from 70.2 percent in 2011.

But Gov. Brian Sandoval, members of the state Legislature and the taxpaying public, which is a big contributor to the defined benefit pension plan, will get some new data to digest in September.

That is when the PERS board is expected to get a report comparing the plan to the 126 largest public pension funds in the country.

The PERS board hired the national firm of Aon Hewitt at a cost of $50,000 to perform the assessment, which Bilyeu said will include a review of the funding policy established by the board.

Sandoval supported the study instead of seeking potential changes to the retirement system in the 2013 legislative session.

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 some policymakers, although Nevada’s plan is considered to be well managed and in better fiscal shape than many others around the country.

The new study should shed more light on the PERS pension fund, which covers about 100,000 active state and local government workers and more than 40,000 retirees.

Sandoval has in the past advocated shifting the retirement plan for future workers from a defined-benefit pension to some form of a 401(k)-style defined contribution plan, which would eliminate future financial liabilities for states and taxpayers. But even with such a change, Nevada would still have to cover the $11.2 billion in unfunded liabilities identified as of June 30, 2012.

In January, Gerald Gardner, Sandoval’s chief of staff, said the governor has no predetermined position on whether wholesale changes to the plan are needed.

Contact Capital Bureau reporter Sean Whaley at or 775-687-3900.

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