Each year the System publishes an annual report, which is submitted to the Governor, members of the Nevada Legislature, public employers, and employee and employer associations. The following is some of the pertinent information contained in our 2002 annual report. Any member who would like a copy of the report should contact the System.
  
Member/Retiree Demographics - The annual report shows interesting trends in membership and retirement data, as follows:

In 1992, the System had 4.3 active members for each person drawing a benefit. This ratio decreased to 3.3 active members per benefit recipient by 2002. We anticipate that this trend will continue to decrease to about 3 active members per retiree in the next five years.

A comparison of active members by employer type for 1992 and 2002 is as follows:

Contribution Rates - As of July 1, 2002, contribution rates for regular and police/fire members under the two contribution plans were as follows:

Contribution rates will remain the same through June 2003 for all members regardless of contribution plan. Rates are scheduled to increase beginning July 1, 2003.

Investments - The System has a funding objective to provide a total rate of return which exceeds the Consumer Price Index (CPI) by 3.5% each year over the long-term future. Our investment objective to achieve that funding is to capture market returns for each asset class. For domestic common stocks, it is the return of the S & P 500; for U.S. bonds, the Lehman Aggregate; and for real estate, the National Council of Real Estate Investment Fiduciaries (NCREIF) index. International stocks are measured against the Morgan Stanley Europe, Australia, Far East Index, non-U.S. Bonds against the Salomon Bros. Non-Dollar Government Bond Index. Total return for the year was -2.7%.

Financial - During the 2002 fiscal year, the total fund balance changed as follows:

2002 Statement of Changes
In Plan Net Assets
($ in millions)

Fund Balance July 1, 2001

$13,373.30

	Revenues:	Contributions	$759.40
		Investments	($367.90)
		Other	$     2.10
		Total	$393.60

	Expenses:	Benefits	$533.00
		Refunds	$15.80
		Administration	$      8.70
		Total	$557.50

Excess, Revenues over Expenses

($      163.90)

Fund Balance June 30, 2002

$13,209.40

Legislation
The Nevada legislature convenes on a biennial basis. For 2001, the Nevada legislature passed several measures of importance to the System. PERS' staff spent much of this past year on the successful implementation of these plan design changes to include:

• An increased multiplier for all service earned after July 1, 2001, at 2.67% of average compensation.
• New survivor benefits for beneficiaries of deceased single members prior to retirement.
• 25 year retirement at any age for police and fire members beginning July 1, 2001.

Also completed was a legislatively mandated study, Assembly Bill 431 (AB431), of lump-sum optional retirement plans, commonly known as DROPs, PLOPs, and Back DROPs. After careful consideration of these programs, the Board voted not to include a lump-sum optional retirement program as part of its 2003 legislative package.

PERS' staff continues to monitor utilization of modifications to PERS' retiree re-employment restrictions passed by the 2001 Nevada legislature. This legislation was designed to assist Nevada public employers with re-employment of retirees in areas of critical labor shortage.

Additionally, federal legislation titled the Economic Growth and Tax Relief Reconciliation Act of 2002 (EGTRRA) provided for enhanced retirement savings through new purchase of service vehicles for PERS' members. AB555 of the 2001 Nevada legislature provided the Board with the opportunity to allow PERS' members to take advantage of this new legislation beginning January, 2002.

Finally, PERS' staff implemented a new Judicial Retirement System (JRS) beginning January 1, 2003. AB4 of the 17th special session of the Nevada legislature created this system to be funded on an actuarial reserve basis. An initial contribution of $5 million was received in July of 2001 to fund benefits that began January 1, 2003. The System will be responsible for the administration of the new JRS.

Technology Improvements
With the Computer Automated Retirement System of Nevada (CARSON) project in final warranty phase, focus was placed on additional functionality made necessary by legislative changes mentioned above and enhancements to the System's website. eCARSON, which provides a secure website for online customer service is currently being implemented. Electronic enrollments, terminations, web estimates, online review of member account information, optional service credit estimates, online wage and contribution editing, member demographic updates, address changes, and optional service credit payoff information are part of this initiative for 2003.

Strategic Planning
Strategic and tactical planning are key to the successful management of the System. These plans must address both external and internal elements ranging from financial market analysis to federal legislative efforts to member relations. Strategic investment management includes validating our long term return and risk assumptions for our asset classes. Other strategic planning issues include continuing to coordinate and review all current communications, including forms, letters, newsletters, web site content, member and employer programs and development of a new approach to pre-retirement programs in cooperation with our participating public employers. Additionally, the System will begin a review of the governance framework of PERS including governance policies, defining clear roles and responsibilities for Board and Executive Management. Operational performance benchmarking is targeted for implementation within the strategic horizon through enhanced data collection relating to service, complexity, workload volumes and activity costs such that we may be compared to a peer group of Systems most similar to PERS.

Due to increases in fraud within the banking industry, PERS has been alerted to extra protections our commercial bank, Wells Fargo, has recently instituted. If you do not have an account at Wells Fargo Bank, when you go to a Wells Fargo branch to cash your refund or benefit check, you will be asked for two forms of identification and a fingerprint. Bank policy is as follows:

1. Two Forms of Identification are required to cash checks as listed:
   1. Primary Identification:
      1. Any government issued ID printed in English which
      2. Contains a document number
      3. Includes a photograph
      4. Contains the holders name and address
      5. Is not expired
   2. Secondary Identification:
      1. Name must match the Primary ID Card, it must
      2. Be issued by a recognized business, institution or government agency
      3. Contain a document number
      4. Contain the signature or photograph that matches the Primary ID Card
      5. Not be expired
2. Fingerprinting (one finger using non-black ink) is also required.

Anything other than the above-listed would be at the sole discretion of the branch.

If you are a benefit recipient, you do not have an account with Wells Fargo Bank, and you would like to avoid this inconvenience, you can have your check automatically deposited into your checking account. Just give us a call and let us know you want to sign up for automatic deposit!

• From Las Vegas 486-3900
• From Carson City 687-4200
• From anywhere else in the U.S. 1-866-473-7768