To the editor:
As administrators of the Public Employees Retirement System, we do not typically respond to articles on PERS. However, given the extent of the inaccuracies contained in the Review-Journal’s Tuesday editorial, your readers may find the following facts informative.
The editorial states that “PERS is clearly unsustainable and in need of reforms” and within “perhaps 10 or 15 years” will not be able to pay all the benefits it has promised when the “bill on the unfunded liability will come due.” The editorial summarizes these unfounded statements by stating: “The Nevada Public Employees Retirement System (is) among the least stable government pension plans in the country.”
The editorial implies PERS is in a state of fiscal crisis. Nothing could be further from the truth.
Nevada law states that the mission of PERS is to attract and retain public employees by providing a reasonable base income in retirement, and the facts confirm that PERS is accomplishing that mission in a very prudent, cost-effective manner. The average teacher or state employee retires at age 60 and receives a monthly PERS benefit of $2,216, without a Social Security benefit. As described in the Chamber of Commerce’s own report, PERS’ contribution rates are among the lowest of any state in the nation. Specifically, PERS’ contributions ranked the seventh-lowest (bottom 15 percent) of all systems reviewed in the chamber’s study.
Further, contrary to statements in the editorial, all employees share one-half the cost of financing their retirement. From the 1970s until today, PERS has more than 1,900 employer certifications attesting that this cost-sharing mechanism was properly implemented.
The PERS trust currently holds $22 billion in assets to support its ability to pay retirement benefits, and the actuarial funding mechanism absorbs current and future pension costs in today’s contribution rate. The system’s finances are measured, reviewed and audited on an annual basis and comply with all applicable accounting requirements and disclosures.
The most significant portion of PERS’ unfunded liability is being retired over the course of the next 27 years in a prudent and methodical manner that ensures intergenerational equity among current and future employees. There is no massive “bill coming due” in the future that would threaten the system’s ability to pay benefits to its retirees.
Put simply, there is no funding crisis at PERS.
PERS’ operations are efficient, maintaining costs 21 percent below the industry average and providing superior customer service with 26 percent fewer employees than the average pension fund. PERS’ investment program has generated one of the highest risk-adjusted returns in the country for more than 20 years with costs of 0.12 percent, 59 percent below the average of large pension plans. These costs are well below the 1.5 percent to 2.0 percent that is typical for the average 401(k) or defined contribution plan. On PERS’ asset base, this translates to a savings of more than $300 million per year for members and taxpayers.
In conclusion, as clearly stated in the chamber’s analysis, “Nevada PERS is … generally considered to be well managed and prudently administered.”
DANA K. BILYEU
THE WRITER IS EXECUTIVE OFFICER OF THE NEVADA PUBLIC EMPLOYEES RETIREMENT SYSTEM.
To the editor:
As a 29-year resident of Southern Nevada, it is hard to grasp the Review-Journal’s incessant obsession with criticism of this state’s public employees, their compensation structure and their Social Security-less pension system. Your constant, baseless assault on public employees is just further evidence of your philosophy to never let the facts get in the way of a good story. Though we all bear the burden of protecting the taxpaying public, of which all public employees are a part, I find the recent actions of the Review-Journal Editorial Board disturbing.
For far too long, the Review-Journal Editorial Board has promoted openness in government, believing contract negotiations for public employees should be conducted in “a little sunshine” and ensuring that the public has “a dog in the fight.” Yet, when it comes to their own discussions that may impact the taxpaying public, the Review-Journal Editorial Board has no problem entertaining “the formidable contingent representing the Las Vegas Chamber of Commerce” (Tuesday John L. Smith column) without inviting any other stakeholders to the meeting.
It is even more disturbing that the Review-Journal bases its recent criticisms of the Nevada Public Employees Retirement System and public employees on a study commissioned by the Las Vegas Chamber of Commerce, a group whose stated vision and mission is to “advocate” and “protect business in Nevada,” not Nevada’s taxpayers. I guess from the chamber’s perspective, if the taxpayers pay less for governmental services, the chamber must believe they will spend more money enriching the profits of the businesses they represent.
As I believe, and others may agree, it is easy to come out with a predetermined conclusion when there is only one party to the conversation. Being able to buy ink by the barrel does not translate into what is truly in the public’s best interest.
If the Review-Journal is truly interested in what is in the taxpayers’ best interests, why not hold an open forum with all the stakeholders present and let the public decide for itself?
THE WRITER IS A LAS VEGAS POLICE DETECTIVE AND DIRECTOR OF GOVERNMENTAL AFFAIRS FOR THE LAS VEGAS POLICE PROTECTIVE ASSOCIATION.