Nevada Retirement News

Public Employees Retirement System
Spring 2001

At its March 29th special Board meeting, the Retirement Board voted to request an amendment to its 2001 legislative package to remove 3-year vesting and indexing deferred vested benefits at 1% annually. By doing so, the Board was able to increase the current proposed retirement benefit multiplier of 2.6% to 2.67% for both regular and police/fire members for future service. Pre-retirement death benefits for unmarried members and 25 year service retirement at any age for police/fire members only are also included in the bill. These enhancements can be made within the current contribution rates without tripping the statutory contribution rate mechanism.

The Retirement Board's bill containing these provisions is Senate Bill 349 and was approved by the Senate Finance Committee just prior to this newsletter going to print. The Board's technical bill, Assembly Bill 555 modifies several provisions within the Retirement Act including changes to our retiree reemployment provisions. This bill was passed out of the Assembly Government Affairs Committee recently as well.

The following list contains a brief description of the bills that PERS is tracking. We pick-up newly published bills on a daily basis and review them for staff recommended positions to the Board. The Retirement Board will take positions (oppose, support, or neutral) on bills at their regular monthly meetings. The Board's position will appear at the end of the description followed by the current status of the bill.

Senate Bills
SB 11 - Reduces number of years of service required for retirement of police officer or fireman at any age. Senate Bill 11 was heard by the Senate Finance Committee on March 5, 2001 and no action was taken on the bill. This provision has been included in PERS' fiscal bill, Senate Bill 349. April 7, 2001 - Notice of exemption.

SB 95 - Revises provisions authorizing state employees to obtain additional retirement credit as payment for unused sick leave. Senate Bill 95 was heard by the Senate Finance Committee on March 5, 2001 and no action was taken on the bill.Opposed.

SB 349 - PERS' fiscal bill that makes various changes to the Public Employees' Retirement System (See PERS Proposed Legislation page for complete description). This bill was heard in the Senate Finance Committee on April 5, 2001 and no action was taken on the bill. April 7, 2001 - Notice of exemption. On April 13, 2001 the Senate Finance Committee approved SB 349 with PERS' proposed amendments. Support.

SB 393 - Changes definition of peace officer and includes all peace officers in the Police and Fire Retirement Fund. This bill is currently in the Senate Finance Committee and has not been scheduled for hearing yet. Opposed.

Assembly Bills
AB 232 - Establishes judicial retirement system for certain justices of the Supreme Court and district court judges. This bill is currently in the Assembly Ways and Means Committee. March 22, 2001 - Notice of exemption. Support.

AB 356 - (BDR 23-1249) Duplicates PERS' legislation except for increasing the multiplier for police/fire members to 2.75%, removing the 25 and out service retirement for police/fire members and inserting retirement at any age once 75% of compensation is attained. Assembly bill 356 was heard by the Assembly Government Affairs Committee on March 22nd and no action was taken on the bill. April 16th, 2001, the bill was withdrawn by the sponsor. Opposed.

AB 431 - Requires the public employees' retirement board to establish a deferred retirement option program. The Retirement Board will be requesting an amendment to this bill that may include a study of deferred retirement option programs. This bill was heard in Assembly Government Affairs Committee on April 2nd and no action was taken on the bill. April 11, 2001, amend and do pass as amended. Scheduled for second reading in the Assembly on April 13, 2001. Support with PERS proposed amendment.

AB 555 - (BDR 23-1249) PERS' technical bill that makes a number of changes to the Retirement Act including changes in the retiree reemployment provisions. This bill was heard in Assembly Government Affairs on April 2nd and was passed with PERS' proposed amendment. Support.

AB 633 - Revises provisions of PERS' retiree reemployment law to benefit one group of retirees. This bill has been scheduled for hearing in Assembly Education on April 11th and no action was taken. On April 16th, 2001 the bill was indefinitely postponed. Opposed.

These are the descriptions that appear as a summary on the bill draft request. Any of these bills can be viewed in their entirety on the 2001 Legislative Session web site (www.leg.state.nv.us/) or you can pick-up a copy of the bill in the Legislative Building, Bill Draft Office.

The investment markets were extremely volatile in calendar year 2000. In fact, 3 of the 5 asset classes in which we invest (U.S. stocks, non-U.S. stocks, and non-U.S.bonds) generated negative returns. The Board's commitment to their long-term strategy, broad diversification, and focus on high-quality served the fund well in 2000, as reflected in PERS' positive 3.8% return (net of fees).

The portfolio also performed well versus other public plans. A recent independent survey of large state pension funds revealed that PERS' ranked 3rd out of 43 plans in terms of total return during calendar year 2000. The fund is also competitive from a risk/reward perspective. A comparison of our risk-adjusted return versus our peers since inception (16-years) reveals that PERS' outperformed 95% of other funds on a risk adjusted basis.

An important reason for our recent competitiveness is PERS' more conservative investment posture. As of December 2000, our stock allocation of 45% of total assets was below the average pension fund, which invested 58% of assets in the stock market.

One of the dangers of disappointing markets is the temptation for investors to waver from their long-term strategy or attempt to "time the market". The Retirement Board remains committed to their strategic asset mix, and continues to buy stocks to maintain the targeted allocation to those markets. In other words, "buying low". This discipline has been a hallmark of the program's success in the past.

The investment markets continue to experience significant volatility in 2001 and unfortunately, U.S. stocks and international assets are generating negative returns year to date. Even in this difficult environment, the Retirement Board continues to stay focused on their goal of meeting long-term benefit funding requirements while managing short term risk.

If you have general questions on The Retirement System, look at the PERS' website for information. The web site contains updated information on a monthly basis. Topics include:

Minutes and agendas of the Retirement Board back to March 2000 This section provides posted agendas and approved minutes

Weekly legislative updates during the legislative session This section supplies information on all bills PERS is tracking and the board's position on bills affecting PERS

Updated tax withholding notification This section asks retirees to contact PERS should any changes to their tax withholding amount be needed

Overviews of the PERS' investment program and the Legislator's investment program This section includes asset allocation and investment manager information

Look for more features to be added in the near future, such as certain forms to be available for downloading and a benefit calculator!

Please review your tax withholding to see if you would like to make any modifications. Unless we receive written instructions to do otherwise, we will continue to withhold (or not withhold) according to your previous instructions.

If you have instructed us to calculate your withholding based on your marital status and number of exemptions, you saw a recalculated deduction from your January benefit.

If in the past you requested a flat dollar deduction, you need to provide new instructions. You may ask us to deduct based on marital status and number of exemptions or plan a flat amount.

If you have questions or wish to change your deduction, please call the Benefits Division and request a Tax Withholding Certificate.

We have had several members call concerned that PERS is providing personal account information to solicitors. That is not the case. PERS records are only subject to disclosure to certain entities including the member, his public employer or spouse, the retired employee or his spouse; or pursuant to court order.

After the death of a member or retiree the beneficiary of a member on whose account benefits are received may review and copy a members records. Any member retired employee or beneficiary may submit a written waiver to the system authorizing his representative to review or copy all records.

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