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One View: Nevada PERS in great shape (2016)

#1
Two years later with a robust stock market and healthy economy, I am sure Nevada PERS is even doing better.



Regarding Timothy Bauer's Tuesday, Feb. 9 letter ("PERS future solvency in question"):

In 2015 Nevada PERS came under attack by the lobbying dollars of powerful Wall Street firms seeking to bleed our public pension funds of massive "management" fees. As explained in John Bogle's "The Little Book of Common Sense Investing," the key factor determining investment success is to minimize or eliminate these fees which Nevada PERS has been doing with great success for decades.

Bauer repeats the tired implication that Nevadans should be alarmed about PERS's "unfunded liability" — he complains that "if all benefits came due today, PERS would pay less than 72 cents on the dollar". Pundits like Bauer have to manufacture impossible scenarios to create the illusion of a crisis when none exists. All benefits will not come due today or on any other day because public workers will not all retire on one day thus leaving our state and local governments unstaffed. Funding PERS retirement benefits over time is equivalent to paying down a mortgage on your home and it allows a valuable benefit to be funded at a cost that is very low relative to that benefit.

Letter: PERS future solvency in question
Social security tax rates are 12.4 percent (shared equally between participating employees and their employers). By not participating in Social Security, Nevada's public employees save 6.2 percent in taxes, which means their employers can pay them 6.2 pecent less without reducing their take home pay. Of course, our public employers ALSO save their 6.2 percent half of social security taxes. Social Security is a "pay as you go" system: The taxes coming in are used immediately to pay benefits; the money is not invested like PERS contributions are.

Bauer cries foul on the basis that public employers and employees contribute 28 percent of the employees' salaries to PERS each year to fund future retirement benefits. The contribution percentage was substantially raised several years ago to accelerate the payoff of the unfunded future liabilities of the PERS fund from 30 to 20 years. It could be argued that this is an overaggressive approach but it was done in response to complaints from people like Bauer.

Eighty percent of PERS retirement benefits are paid from investment returns. It would therefore take five times as much money for Nevada public employees to pay salaries high enough to compensate for the elimination of PERS retirement benefits.

Bauer makes the vague implication that the trend is ominous but in fact there is no cause for concern and ample reason to rejoice. Nevada PERS continues to be one of the best-managed public pension funds in the country, performing in the top 10 percent by delivering average investment returns over the past 31 years. It offers a valuable benefit to public workers at a discounted cost. Nevada public employee retirees pump money back into the economy, which helps all of us. The fund is expertly managed at low cost and is well on its way to 100 percent funded status. It is truly unfortunate that most private employers have eliminated defined benefit plans in favor of 401(k)s, and this is one of the main reasons why wealth and income in the United States have become so concentrated in the top 1 percent. Nevadans should be grateful that our state has such a valuable asset in its Public Employees' Retirement System.

Trevor Alt is a firefighter for the City of Reno.
 
#3
Well it's no California, or Illinois, or Connecticut. But give Sisolak time, I'm sure he'll take us there.
Um, CalPERS is doing pretty well. They are at over 350 Billion in assets, is earning more than its paying out and continues to invest 10% back into the state that supports infrastructure, 100,000s of jobs, businesses and commerce. The last number I saw was 28 Billion, but cant find the article at the moment.

2018- Pension fund hits milestone: It’s earning more money than it’s paying out
Calpers Reports 8.6% Gain on Investments, Beating Its Target
CalPERS Reports Preliminary 8.6 Percent Investment Return for Fiscal Year 2017-18
 

tuolumnejim

Very Active Member
Forum Supporter
#4
Um, CalPERS is doing pretty well. They are at over 350 Billion in assets, is earning more than its paying out and continues to invest 10% back into the state that supports infrastructure, 100,000s of jobs, businesses and commerce. The last number I saw was 28 Billion, but cant find the article at the moment.

2018- Pension fund hits milestone: It’s earning more money than it’s paying out
Calpers Reports 8.6% Gain on Investments, Beating Its Target
CalPERS Reports Preliminary 8.6 Percent Investment Return for Fiscal Year 2017-18
Lol no its not they've been cooking the books for years, as the old saying goes "robbing Peter to pay Paul" and they are very adept at it.


Borenstein: Ain’t seen nothing yet; California pension cost rise just starting
 
#5
Cooking the books is right.
This February 2018 article seems to indicate CALPERS is in serious trouble.
An excerpt says... "The new report warns that pension costs are becoming “unsustainable.”
Kalifornia is sinking so fast, I hope it doesn't suck Nevada in with it.
 

Cirdan

Very Active Member
#6
Um, CalPERS is doing pretty well. They are at over 350 Billion in assets, is earning more than its paying out and continues to invest 10% back into the state that supports infrastructure, 100,000s of jobs, businesses and commerce. The last number I saw was 28 Billion, but cant find the article at the moment.

2018- Pension fund hits milestone: It’s earning more money than it’s paying out
Calpers Reports 8.6% Gain on Investments, Beating Its Target
CalPERS Reports Preliminary 8.6 Percent Investment Return for Fiscal Year 2017-18
Did you read your links? Yes, they have $350B in assets, but that's still only 71% of what they need. Have to look at BOTH assets and liabilities. They're also raising contribution requirements to the counties and cities. All are in dire financial straits due to significant increases in pension costs.