PERS reports 75.6% funded ratio and outlines amortization, contribution timeline

Tina Lis, executive officer of the Public Employees' Retirement System (PERS), briefed the Assembly Committee on Government Affairs on PERS' structure, membership, funding and investment performance.

"We are a constitutionally created trust fund," Lis said, describing PERS as a tax-qualified, multiple-employer cost-sharing defined-benefit plan that covers most Nevada public employers. She told the committee the fund administers benefits for more than 102,000 active members in the regular fund (as of the June 30, 2024 actuarial valuation) and has tens of thousands of retirees and beneficiaries drawing benefits.

Lis reported an actuarial funded ratio of 75.6 percent (actuarial value of assets) as of the June 30, 2024 valuation and said the board adopts actuarial assumptions recommended by the system's actuary. She explained that liabilities are funded by investment returns and employer and employee contributions and that PERS uses a 5-year smoothing method for investment gains and losses. Lis said PERS' investment return assumption is 7.25 percent.

On contributions and amortization, Lis said the system uses an amortization approach that generally spreads gains and losses over 20 years; she reported that the regular fund's remaining amortization period stood at about 14 years and the police-and-fire fund at about 18'19 years (both measured from the 6/30/2024 valuation). She told the committee that the final piece of a previously scheduled contribution-rate increase is effective July 1, 2025.

Lis provided asset figures and performance context: she told the committee the trust had about $64 billion as of June 30, 2024, and that the trust was about $67.47 billion as of the most recent week cited during her presentation. She summarized multi-year returns (for example, a strong single-year return last year near 12 percent and five- and ten-year annualized returns) and said the PERS program generally ranks well in peer comparisons for large public pension funds.

Committee members asked questions about contribution methods (employee-pay vs. employer-pay), tax treatment of contributions, staffing and whether PERS monitors membership and payroll growth as part of long-term projections. Lis said PERS has roughly 80 employees with one vacancy in the hiring process at the time of the presentation. Members of the public who testified during the meeting voiced support for protecting PERS benefits and opposed converting the system to a defined-contribution plan.

Lis closed by noting the board's statutory and constitutional responsibilities and that the legislature, as plan sponsor, sets benefit provisions in statute (chapter 286).