Letters to the editor for Tuesday, Feb. 9, 2016
Future solvency of PERS in question
In 2015 the Nevada Legislature made changes to Public Employee Retirement System of Nevada, or PERS. This was done to address the inadequacy of funding future retirees.
Unfortunately, other storm clouds are on the horizon for retired Nevada employees’ current pensions. This affects tens of thousands of retirees.
Case in point —
1. The funding ratio of PERS in year 2000 was over 84 percent. Currently it is under 72 percent. If all the systems benefits came due today, PERS would only be able to pay about 72 cents on the dollar.
2. In the 1990s, it took around 19.5 percent of one’s salary to keep PERS solvent. Each employer and employee now contributes 28 percent of the employee’s salary to the fund each year. Fire and police — over 40 percent of salary!
3. The Wall Street Journal on Sept. 5 had an article on why several states had come to a conclusion that to project an 8 percent return a year on the pensioners’ money to help finance PERS was not realistic.
Unfortunately, Nevada did not heed this advice, and still claims can earn 8 percent a year. If PERS is under 8 percent, the viability of financing retirees’ pensions is in some trouble.
From Jan. 1, 2006 to Feb. 1, 2016, PERS earned around 6 percent on its return on pensioners’ money. That is quite a bit from 8 percent.
I would encourage you to contact Steve Edmundson, investment officer at PERS, to see what his spin is on the above. Hard to spin the numbers, though.