85°F
weather icon Clear

Nevada retirement system to consider rare change

CARSON CITY — For the first time in more than three decades, the board of Nevada’s public employee retirement system will consider a change to its investment assumption when it meets Thursday.

The change from a projected 8 percent return on its investments to 7.5 percent over the next several years could mean higher contribution rates from public employees and employers — from state workers to school teachers — to offset the lower expectations.

Contribution rates are important because more money flowing into the retirement system from public agencies could mean less money for other priorities.

PERS has used an 8 percent return assumption since 1984, and it has exceeded that target, hitting just over 9 percent. The retirement fund is now worth more than $38 billion. The plan saw a return on investment of 11.8 percent last fiscal year.

But other public pension plans, notably the massive $300 billion-plus CalPERS plan in California, have been lowering assumptions as critics have suggested that prior expectations were unrealistic.

“Most funds are headed in this direction,” said Nevada PERS Executive Officer Tina Leiss. “It does take a little risk off the table if you can do this.”

While it is a significant policy decision for the board of the Nevada retirement system, Leiss said actual returns on investments will ultimately play a big role in contribution rates.

The assumptions are used to ensure the solvency of the plan over the long term for the approximately 105,000 active members and 54,000 retired and disabled members. Because the public retirement plan is a defined benefit plan where retirees get a fixed monthly pension, taxpayers are ultimately responsible for its fiscal health.

The overall funded ratio of the plan increased to 74.1 percent in 2016 from 73.2 percent in the prior year.

A 70 percent funding ratio is considered the threshold for fiscally sound public pension plans by the investment and research firm Morningstar Inc. The goal of Nevada’s plan, as with other public pension plans, is to become 100 percent fully funded.

Leiss said the ratio could decline when the board gets the next report in November if the 7.5 percent return rate is adopted.

The current contribution rate for regular employees is 28 percent, which is shared half by the public agency and half by the employee. The current rate has been in place since Fiscal Year 2016. Before that, the rate was 25.75 percent. Rates for police and firefighters are higher and calculated separately.

The investment return is one of several assumptions that will be considered as part of the Actuarial Experience Study by Segal Consulting for the board. Other assumptions include inflation, which is projected to be lower and so will benefit the plan’s bottom line.

Contact Sean Whaley at swhaley@reviewjournal.com or 775-461-3820. Follow @seanw801 on Twitter.

Don't miss the big stories. Like us on Facebook.
Politics Videos
Bernie Sanders Unveils Affordable Housing Plan - Video
Bernie Sanders sits down with the Las Vegas Review-Journal to talk about his new affordable housing plan he unveiled at Plumbers & Pipefitters.
Jim Marchant talks gun control and Dreamers - Video
Republican Candidate for District 4 Jim Marchant talks about gun control and immigration policies. (Las Vegas Review-Journal)
Hurricanes, Gender, and Science in the Press
Imagine if the mainstream media’s current hurricane-sized obsession with scientific accuracy applied to gender.
Cory Booker on college tuition and minimum wage
Cory Booker talks on the RJ Politics podcast about college debt, informing workers about their rights and livable wages.
Nevada Politics Today: Teacher raises - VIDEO
Jason Goudie, the chief financial officer for the Clark County School District, talks about teacher pay and raises. (Las Vegas Review-Journal)
Media's Double Standard On Incitement And Trump - Video
Over the weekend, an Elizabeth Warren-supporting socialist who opposed gun violence used a rifle to commit a mass murder in Dayton, Ohio. The media has downplayed that aspect of the tragedy.
Project Our Care Tour Kicks Off In Las Vegas
U.S. Rep. Dina Titus joined health care advocates and local residents as part of Protect Our Care’s nationwide bus tour kick off in Las Vegas on Monday, August 5, 2019. (Mat Luschek / Review-Journal)
Bernie Sanders talks about guns, response to El Paso shooting
Sen. Bernie Sanders spoke about his response and continued policy ideas about guns and gun control to the Review-Journal after a panel of other topics. (Rachel Aston/Las Vegas Review-Journal)
Pete Buttigieg On Gun Control And Climate Change - Video
Pete Buttigieg talks about his campaign for the 2020 election and how Nevada is a vision of what the future can be.
Beto O'Rourke speaks in Las Vegas
Presidential candidate Beto O'Rourke spoke to supporters at the East Las Vegas Community Center in Las Vegas, Thursday, Aug. 2, 2019. (Las Vegas Review-Journal)
Former Nevada Senate leader Kelvin Atkinson sentenced to prison
Former Nevada Senate Majority Leader Kelvin Atkinson, who pleaded guilty to misusing campaign funds, was sentenced to 27 months in prison on Thursday, July 18, 2019. (Mat Luschek/Las Vegas Review-Journal)
Trumps Strength is also a Weakness - Video
One of Donald Trump’s greatest strengths — his ability to shape national narratives — is also a great weakness.
Tax the Rich Bus Tour makes a stop in Las Vegas - Video
The Tax the Rich Bus has stopped in Las Vegas as part of its summer tour. (Las Vegas Review-Journal)
Assemblywoman Daniele Monroe-Moreno hosts BBQ - Video
Assembly Woman Daniele Monroe-Moreno hosts BBQ to bring the community together to hear about the candidates up for election and for people to gather and have fun.
Democrat Virtual Caucus - Video
Elizabeth Warren visits Las Vegas
Senator Elizabeth Warren made a campaign stop at the East Las Vegas Community Center on Tuesday July 2, 2019. (Mat Luschek / Review-Journal)
Aaron Ford Speaks About Bill AB431
AB431 is a bill sponsored by Nevada Assembly Speaker Jason Frierson to restore the right to vote for formerly incarcerated individuals. Attorney General Aaron Ford spoke at the AM&E Church in North Las Vegas about the bill, on Monday, July 1, 2019. (Mat Luschek/Las Vegas Review-Journal)
The Right Take: Biden's Racially Questionable Comments
Joe Biden has uttered racially charged statements for years. Now that he’s the frontrunner for the Democrat presidential nomination, he may finally face prolonged scrutiny for them.
Christopher Rufo Discusses Homelessness In The USA - VIDEO
Christopher Rufo discusses homelessness in the United States and how politicians can work to improve conditions for those with drug addictions.
THE LATEST
Trump aides heading to Nevada Basque Fry

Several current and former aides to President Donald Trump are headed to the annual Basque Fry, an event sponsored by former Republican Attorney General Adam Laxalt.