State employee retirement system reports record earnings for 2007

The Public Employees Retirement System reported to lawmakers Wednesday they finished fiscal year 2007-08 with a 14.8 percent net earning after fees.

Investment Officer Ken Lambert told the legislative subcommittee that monitors state retirement and benefits plans that number is the best earnings rate in nine years.

PERS is the retirement plan that covers nearly 104,000 active government and school district workers and nearly 40,000 retirees statewide. Among those covered are some 18,000 state employees.

Lambert said, however, the first half of this fiscal year has been a different story. He said through Dec. 31, PERS actually managed to weather the economic storm and show 2.4 percent net earnings. But the first two weeks of January changed that, plunging investments down 3.4 percent.

He said PERS investment experts are working to stave off any further losses as the economy attempts to recover.

Executive Officer Dana Bilyeu told the committee the plan had more than $22.6 billion in assets as of June 30, 2007.

It has been working for more than a decade to fund the plan's unfunded liability, the estimated amount needed to cover its obligations to all those covered by the plan.

When the program started by lawmakers in the 1990s began, the plan had assets for only about 55 percent of that liability. Bilyeu and Lambert told lawmakers that percentage is now up to 77.2 percent - a 2.3 percent gain in 2007 due to that high rate of earnings on investments. The system's unfunded liability is estimated at $6.3 billion, she said.

Bilyeu said it will take an estimated 27.5 years before the plan is fully funded.

Sen. Bob Beers, R-Las Vegas, asked about the impact of reports that a large number of teachers, especially in Clark County, are considering early retirement because effective in October, nonstate retirees will not be able to join the state benefits plan unless their active members are in the state plan. Active Clark County teachers are represented by a trust, not the state plan.

Bilyeu said she has heard there will be some retirements, "but I don't think it will be as significant as has been reported."

She said in counseling some prospective retirees, PERS has found some change their mind because of the reduced amount of retirement money they will receive because they retired early.

• Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.