Nevada Retirement New

Public Employees Retirement System
Fall 2001

The ongoing military actions in the Middle East serve as a clear reminder that many PERS members play an important role in our nation's armed services. As members of the National Guard or the reserves, it is possible that many members will be called to active military duty. Federal law guarantees this service will not impair a member's retirement benefits.

The Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), explains a military veteran's rights to retirement benefits upon return to PERS' covered employment. Under USERRA, a member must be credited with all service that would have been earned in PERS as if the member had not left public employment. Contributions for the service should be submitted to PERS upon the member's return to covered public employment. The service will be based on what the member would have earned had he or she not been on military leave. In accord with both USERRA and PERS' law, an employee may be required to make up the employees' share of the contributions (this applies only to PERS members who contribute under the employee/employer contribution plan).

If a member is called to active military duty, he or she should contact their public employer, or a PERS' representative to begin the process of reporting service and contributions to PERS for time spent away from work in the armed services.

The tragic events of September 11, 2001 exacerbated recent volatility in the securities markets and negative returns in stocks. For the period June 30, 2001 through October 17, 2001, the U.S. stock market declined by 12%.

While recent U.S. stock returns are disappointing, the downturn appears less severe when viewed in light of historical data. The chart below depicts the level of the S&P 500 U.S. stock index over the last eleven years.

The U.S. stock market has returned to levels similar to 1998, but continues to be well above the values of the majority of the 1990's. For the ten years ended June 2001, the S&P 500 generated a 15.1% return compared to 15.8% for PERS' U.S. equity portfolio. Both numbers are well above PERS' long-term equity assumption of 10%.

As a group, public pension funds remain committed to the investment markets. In fact, recently Nevada PERS was a participant in a statement of support sponsored by a number of institutions. It read in part, "we, as institutional investors, will continue to provide stability in the U.S. financial markets. We will remain patient long-term providers of capital."

We are confident PERS' portfolio is well positioned to weather this disappointing environment. Within our current asset allocation strategy, over half of the fund is invested in U.S. bonds, international bonds and real estate, all assets that generated positive returns fiscal year to date. The well diversified, high quality nature of our investment program helps promote stability in volatile periods.

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Effective January 1, 2002, a PERS member may designate a "survivor beneficiary" to receive a benefit after his/her death, assuming death occurs before the member retires. This designation must be made on a form approved by the PERS' Executive Officer. Our form: Beneficiary Designation for Unmarried Members of the Public Employees' Retirement System is included in this newsletter. This form is also available at our website: www.nvpers.org.

Although we are requesting all members complete the enclosed form, the "survivor beneficiary" designation is applicable only if:

• Member's death occurs on or after January 1, 2002;
• Member has established eligibility for survivor benefits as of the date of his/her death;
• Member is not married at the time of his/her death.

Married members are encouraged to complete a Beneficiary Designation for Unmarried Members of the Public Employees' Retirement System form to ensure payment of benefits under the new law if, due to a divorce or the death of a spouse, the member is unmarried at the time of his/her death. This designation may be changed at any time until the member dies or retires.

Please note that a member may designate any person as the quot;survivor beneficiaryquot; including a minor child, who would receive the quot;survivor beneficiaryquot; benefit in addition to the survivor benefit provided in NRS 286.673 for a surviving child. If you have questions regarding this benefit, please contact our office.

The Governor recently appointed three new members to the Retirement Board. Purisimo Hernandez and Warren Wish were appointed to employee representative positions, while Sue DeFrancesco was appointed to a management position. Look for biographies of these new members in future editions of Retirement News and on our website.

The Retirement System staff, membership, and benefit recipients owe tremendous gratitude to outgoing chairman Joyce Woodhouse, and members Steve Cozine and Judy Holt. All three contributed countless hours and dedicated service to the System. Chairman Woodhouse served the Retirement System for 16 years, Steve Cozine served for 12 years and Judy Holt completed 8 years on the Board. Each supplied valuable insight into the many important and difficult decisions made by the Retirement Board.

Congress recently passed the Economic Growth and Tax Relief Reconciliation Act of 2001 (HR 1836) providing greatly enhanced retirement savings opportunities. The Retirement Board has begun the process for the adoption of policies to allow PERS members to take advantage of the provisions of this federal law. Even though most provisions will take affect January 1, 2002, now is the time to begin thinking about the opportunities for additional retirement savings. Here are a few of the options:

Provisions for Purchases
Individuals will be able to transfer monies from 403(b) and 457 plans as well as IRAs to purchase service credit (certain restrictions will apply)
Provisions for Increased Portability
Rollovers will be allowed among all state and local 457 plans, and section 403(b) plans (tax sheltered annuities or TSAs)as long as the individual plans are modified to allow it Rollovers from IRAs will be allowed to workplace retirement plans (certain restrictions will apply)

PERS is making every effort to provide for these retirement savings opportunities within the plan, however, the Retirement System reserves the right to refuse to accept any distribution from a plan or account if the distribution would jeopardize the tax qualified status of the system.

If you haven't already started to receive your benefit check through direct deposit to your financial institution, PERS strongly suggests that you consider the program. By signing up for direct deposit your funds will be available to you on the fourth working day before the end of the month. Unforeseen delays in postal delivery will not affect the availability of your benefit.