HomeMy WebLinkAboutPublic Employees' Retirement System of Nevada - Public Financial ReportPUBLIC EMPLOYEES’ RETIREMENT SYSTEM
of NEVADA
A Component Unit of the State of Nevada
POPULAR ANNUAL FINANCIAL REPORT
For the Fiscal Year Ended
June 30, 2021
2021 – POPULAR ANNUAL FINANCIAL REPORT
2021 – PUBLIC EMPLOYEES’ RETIREMENT SYSTEM OF NEVADA 1
Table of Contents
Award for Outstanding Achievement in Popular Annual Financial Reporting .......................................... 1 Administrative Personnel ............................................................................................................................ 2 Mission Statement ...................................................................................................................................... 3 Message from Executive Officer ................................................................................................................ 3
Financial Summary ..................................................................................................................................... 4
Financial Highlights ................................................................................................................................... 6 Investments ................................................................................................................................................. 7 Actuarial ..................................................................................................................................................... 9 Membership .............................................................................................................................................. 10
Statistics .................................................................................................................................................... 11
Participating Employers ........................................................................................................................... 13 Reporting Standards ................................................................................................................................. 14 Contact Information .................................................................................................................................. 14
Government Finance Officers Association
Award for
Outstanding
Achievement in Popular Annual
Financial Reporting
Presented to
Nevada Public Employees Retirement System
For its Annual Financial Report
for the Fiscal Year Ended
June 30, 2020
Executive Director/CEO
POPULAR ANNUAL FINANCIAL REPORT – 2021
2 PUBLIC EMPLOYEES’ RETIREMENT SYSTEM OF NEVADA – 2021
Administrative Personnel
(current)
Timothy Ross Chair 2022
Yolanda T. King Vice Chair 2021
Dawn E. Huckaby Member 2022
Todd H. Ingalsbee Member 2023
Norma Santoyo Member 2021
Mark Stevens Member 2023
Brian A. Wallace Member 2021
PUBLIC EMPLOYEES’ RETIREMENT BOARD
Terms expire on June 30 of year noted.
Tina Leiss Executive Officer
Steve Edmundson Chief Investment Officer
Lauren Larson Deputy Investment Officer
Kabrina Feser Operations Officer
John Van Horn Chief Financial Officer
Christopher Nielsen General Counsel
Teresa Chalmers Administrative Analyst
RETIREMENT STAFF
MEDICAL ADVISORS
Robert Fliegler, M.D., Carson City, Nevada
Terry Long, RN, Carson City, Nevada
Scott Vivier Chair 2023
Cameron Wagner Vice Chair 2024
Jennifer Wyatt Member 2023
Scott Nicholas Member 2022
Bill Gardner Member 2024
POLICE AND FIREFIGHTERS' RETIREMENT FUND ADVISORY COMMITTEE
Terms expire on June 30 of year noted. THE SYSTEM’S ADVISORS
Consulting Actuary – Segal, San Francisco, California Independent Auditors – Macias Gini & O’Connell LLP, Sacramento, California CliftonLarsonAllen LLP, Baltimore, Maryland Investment Consultants – Callan Associates, Atlanta, Georgia Jobs Peak Advisors, Minden, Nevada
Ramon Chavez Accounting
Carrie Harrison Employer, Production & Pension Services
Charlie Park Information Technology
Julie Spaletta Internal Audit
Felicia King Member & Retiree Services
Walter Zeron Support Services
DIVISION SUPERVISORS
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2021 – PUBLIC EMPLOYEES’ RETIREMENT SYSTEM OF NEVADA 3
Mission Statement
It is the mission of the Public Employees’ Retirement System to:
Provide public workers and their dependents with a retirement program that provides a reasonable base income for retirement or for periods where a disability has removed a worker’s earning capacity.
Encourage those workers to enter into and remain in government service for such periods of time to give public employers and the people of the State of Nevada the full benefit of their training and experience.
Provide an orderly method of promoting and maintaining a high level of service to the public
through an equitable separation procedure available to employees at retirement or upon becoming disabled. Message From Tina Leiss, Executive Officer
It is a pleasure to present the Popular Annual Financial Report (PAFR) of the Public Employees’ Retirement
System of Nevada (System or PERS), a component unit of the State of Nevada, for the fiscal year ended June 30, 2021.
The financial statements included in this report are the responsibility of the System’s management and have
been prepared in accordance with generally accepted accounting principles as promulgated or adopted by the Governmental Accounting Standards Board (GASB). In management’s opinion, the financial statements present fairly the financial position of the System at June 30, 2021, and changes in fiduciary net position for the year then ended. PERS administers a cost-sharing, multiple-employer defined benefit public employees’ retirement system. The System was established by the Nevada Legislature
in 1947. At the end of fiscal year 2021, the System had 214 participating employers, 106,960 active members, and 75,955 benefit recipients. The System is
comprised of two sub-funds, Regular and Police/Fire. One of the principal goals of the Public Employees’
Retirement Board (Board) has been to stabilize contribution rates during volatile investment market cycles and demographic changes and to ensure cost predictability to employers and members. The 2021 actuarial valuation shows that the tools the Board has put in place to meet these objectives are working,
while maintaining the retirement security of all public employees.
The System is funded by contributions calculated as a percentage of employee salary. Although the System
receives an actuarial valuation annually, the Public Employees’ Retirement Act requires an adjustment in the statutory contribution rates on July 1 of each odd-numbered year, based on the actuarily determined rates indicated in the actuarial valuation report for the immediately preceding year. As of June 30, 2021, the System’s net position was $58.5 billion, an increase of $11.7 billion from 2020. The fiscal year 2021 return was 27.3%, which added $12.6 billion in investment income. Investment
performance was primarily driven by strong returns from U.S. stocks, international stocks, and private equity. The funded ratio calculated as smoothed
actuarial value of assets as a percentage of total actuarial accrued liability decreased to 75.4% from 76.1% in 2020.
Detailed information on the financial position of the System can be found in the June 30, 2021 ACFR at https://www.nvpers.org/publications/reports. Respectfully submitted, Tina Leiss
Executive Officer
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4 PUBLIC EMPLOYEES’ RETIREMENT SYSTEM OF NEVADA – 2021
Financial Summary
The System undergoes a financial audit by an independent auditor each fiscal year.
Condensed Statement of Fiduciary Net Position The Condensed Statement of Fiduciary Net Position includes all of the System’s pension trust fund assets, liabilities, and the net position at the end of the fiscal year.
As of As of Increase/(Decrease)
June 30, 2021 June 30, 2020 2020 to 2021
Cash and cash equivalents $ 705,534,396 $ 773,941,346 $ (68,406,950)
Receivables 346,318,623 314,036,519 32,282,104
Pending trades receivable 719,321,011 599,026,854 120,294,157
Investments, at fair value 57,468,665,112 45,668,267,819 11,800,397,293
Collateral on loaned securities,
at fair value 174,487,304 205,982,715 (31,495,411)
Property and equipment, net 5,148,672 3,873,113 1,275,559
Other assets 4,769,353 4,131,236 638,117
Total assets 59,424,224,471 47,569,259,602 11,854,984,869
Accounts payable
and accrued expenses 39,503,999 21,062,690 18,441,309
Pending trades payable 751,768,813 607,096,841 144,671,972
Obligations under securities lending activities 174,487,304 205,982,715 (31,495,411)
Total liabilities 965,760,116 834,142,246 131,617,870
Net position restricted for
pension benefits $ 58,458,484,355 $ 46,735,117,356 $ 11,723,366,999
Significant Changes from 2020 to 2021 Receivables increased 10.3% between 2020 and 2021, primarily due to an increase in contributions
underpayments of $15.3 million. Pending trades receivable and payable increased $120 million and $145 million from 2020 to 2021. Pending trades fluctuate year to year and are unpredictable. Investments at fair value increased $11.8 billion from 2020 to 2021 primarily due to the 27.3% (timeweighted, gross of fees) total return generated by the System’s investments in 2021. The investment
performance was primarily driven by the strong returns from U.S. stocks, international stocks, and private equity.
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2021 – PUBLIC EMPLOYEES’ RETIREMENT SYSTEM OF NEVADA 5
Financial Summary (continued)
Condensed Statement of Changes in Fiduciary Net Position The Condensed Statement of Changes in Fiduciary Net Position shows additions to and deductions from the pension trust fund during the fiscal year presented. Over time the increase or decrease in net position serves as a useful indicator of the health of the System’s financial position.
Increase/(Decrease)
Significant changes 2020 to 2021 Accounts payable and accrued expenses increased by $18.4 million between 2020 and 2021 primarily due to an increase in contribution overpayments and contributions payable of $18.1 million.
Net investment income increased $9.5 billion from 2020 to 2021 because the time-weighted investment
return (gross of fees) of 27.3% in 2021 was higher than the 7.2% returned in 2020. This performance represents the second strongest fiscal year in the Fund’s history and the highest return in more than three decades.
Benefit payments increased 7.3% in 2021 primarily due to the number of beneficiaries increasing from
72,471 in 2020 to 75,955 and the average monthly benefit increasing from $3,279 in 2020 to $3,377 in 2021. Refunds of contributions increased 2.6% and transfers of contributions increased $4.4 million in 2021.
These numbers are unpredictable each year and depend on individual elections made by active and inactive
members.
2021 2020 2020 to 2021
Contributions $2,173,834,096 $2,157,256,517 $16,577,579
Net investment income 12,602,090,284 3,137,476,177 9,464,614,107
Other income 3,262,309 3,070,029 192,280
Total additions 14,779,186,689 5,297,802,723 9,481,383,966
Benefit payments 3,008,567,031 2,805,034,501 203,532,530
Refunds of contributions 30,272,862 29,504,997 767,865
Transfer of contributions 4,424,263 - 4,424,263
Administrative expenses 12,530,326 12,398,157 132,169
Other expenses 25,208 295 24,913
Total deductions 3,055,819,690 2,846,937,950 208,881,740
Change in net position 11,723,366,999 2,450,864,773 9,272,502,226
Net position, beginning of year 46,735,117,356 44,284,252,583 2,450,864,773
Net position, end of year $58,458,484,355 $46,735,117,356 $11,723,366,999
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6 PUBLIC EMPLOYEES’ RETIREMENT SYSTEM OF NEVADA – 2021
Financial Highlights
Net Position
Net position represents total assets less total liabilities. In fiscal year 2021 the net position increased to $58.5 billion. This is the twelfth year in a row the System’s net position has increased. Net Position (in billions) over Fiscal Years
Contributions and Benefit Payments Benefit payments and contributions received by the System have increased over time. Benefit payments are paid from both incoming contributions as well as investment income.
Contributions & Benefit Payments (in billions) over Fiscal Years
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2021 – PUBLIC EMPLOYEES’ RETIREMENT SYSTEM OF NEVADA 7
Investments
The investment program is designed to generate a long-term return that meets the System’s objectives while minimizing risk.
The investment objective of the System is to:
Generate a 7.5% long-term investment return which exceeds the rate of inflation (CPI) by 4.75% by capturing market returns within each asset class.
Invest so that short-term volatility of returns will not cause the System to alter its long-term strategy.
Structure an investment program which is sufficiently uncomplicated to control the ability to consistently meet return and risk objectives.
Asset allocation is the most significant factor influencing the risk and return of the investment program. The System uses an entirely indexed structure for U.S. stocks, International stocks, and U.S. bonds. U.S. stocks are indexed to the S&P 500 Index, international stocks are indexed to the MSCI World ex USA
Index, and U.S. bonds are indexed to the Bloomberg Barclays U.S. Treasury 1-3 Year Index. The Private
Markets investments are made up of actively managed private equity and real estate portfolios. Asset Allocation at June 30, 2021
*Includes cash held by investment managers. **Includes 7.3% Private Equity and 4.5% Private Real Estate.
POPULAR ANNUAL FINANCIAL REPORT – 2021
8 PUBLIC EMPLOYEES’ RETIREMENT SYSTEM OF NEVADA – 2021
Investments (continued)
Total Fund Performance
The chart below illustrates PERS’ portfolio performance over a variety of time periods. The fund’s annualized rate of return is 9.8% since inception (37 years) versus the long-term actuarial objective of 7.5%. PERS Annualized Total Returns vs. Market Objective As of June 30, 2021
Asset Class Performance The chart below shows PERS’ Fiscal Year performance by asset class.
One-Year Asset Class Returns vs. Market Objective As of June 30, 2021
The System’s complete Investment Objectives and Policies may be found on the PERS website www.nvpers.org.
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2021 – PUBLIC EMPLOYEES’ RETIREMENT SYSTEM OF NEVADA 9
Actuarial
The System’s funding objective is to pay long-term benefits through contributions (and investment returns
on such contributions) that remain relatively level from year to year. The amount contributed is a percentage of the salaries earned by members. Using this methodology member and employers each pay equally for retirement service accrued by active members in any given year. While the System receives an actuarial valuation annually, contribution rates are adjusted on July 1 of each odd-numbered year, based on
the actuarially determined rates in the actuarial valuation for the immediately preceding year.
Funded Ratio One measure of a pension fund’s health is its funded status. One factor to keep in mind is that all benefits
the System is obligated to pay are not due and payable immediately. The funded ratio compares the
actuarial value of assets to the actuarial accrued liability. Below is a chart showing the funding levels of PERS over the last 10 years. PERS Funded Ratio by Fiscal Year
Net Pension Liability The net pension liability is determined using actuarial methods required by the Governmental Accounting Standard Board (GASB) and is used for financial reporting purposes. The net pension liability uses the plan
fiduciary net position in the calculation rather than the actuarial value of assets used in the funded ratio calculation above. The components of the net pension liability at June 30, 2021, were as follows:
Total pension liability $ 67,577,781,457 Plan fiduciary net position (58,458,484,355)
Net pension liability $ 9,119,297,102
Plan fiduciary net position as a percentage of the
total pension liability 86.5%
POPULAR ANNUAL FINANCIAL REPORT – 2021
10 PUBLIC EMPLOYEES’ RETIREMENT SYSTEM OF NEVADA – 2021
Membership
Retirement System Membership 2012 to 2021
June 30
Active Members
Inactive Members
Retired &
Disabled Members
Beneficiaries & Survivors
Total Membership 2012 98,512 12,962 44,012 5,534 161,020 2013 99,038 13,739 46,653 5,777 165,207 2014 100,522 14,633 49,170 6,038 170,363
2015 103,108 15,032 51,853 6,306 176,299 2016 105,167 15,639 54,615 6,565 181,986 2017 105,801 16,668 57,199 6,931 186,599 2018 107,506 16,607 59,819 7,289 191,221 2019 109,167 17,341 62,466 7,590 196,564
2020
2021
111,815
106,930
17,398
18,871
64,867
67,755
7,874
8,200
201,954
201,756 Number of Active Members Per Retiree
Number of Number of Active Members Active Members Retired Members* per Retiree Police/ Police/ Police/
June 30 Regular Fire Regular Fire Regular Fire
2012 86,719 11,793 38,528 5,484 2.3 2.2 2013 87,193 11,845 40,854 5,799 2.1 2.0 2014 88,709 11,813 43,136 6,034 2.1 2.0
2015 91,124 11,984 45,508 6,345 2.0 1.9
2016 93,030 12,137 47,899 6,716 1.9 1.8 2017 93,276 12,525 50,091 7,108 1.9 1.8 2018 94,615 12,891 52,377 7,442 1.8 1.7 2019 96,072 13,095 54,678 7,788 1.8 1.7
2020 98,228 13,587 56,733 8,134 1.7 1.7
2021 93,796 13,134 59,069 8,696 1.6 1.6 *Excludes survivors and beneficiaries *Information provided by Segal, the System’s actuary.
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2021 – PUBLIC EMPLOYEES’ RETIREMENT SYSTEM OF NEVADA 11
Statistics
Average Age and Service Statistics for Members*
Regular Police/Fire As of June 30
Average Age
Average Years of Service
Average Age
Average Years of Service
2012 46.4 10.0 40.4 11.1 2013 46.5 10.1 40.6 11.3 2014 46.4 10.1 40.8 11.5
2015 46.2 10.0 40.8 11.6 2016 46.0 9.9 40.7 11.5 2017 45.9 9.8 40.2 11.2 2018 45.8 9.9 39.9 11.1 2019 45.7 9.7 39.8 11.0
2020 45.7 9.7 39.5 10.8 2021 45.8 10.0 39.3 10.8 Average Salaries for Members*
As of June 30 Regular (Decrease)Police/Fire (Decrease)
2012 $48,808 $72,523
2013 48,626 (0.4) %72,637 0.2 %
2014 48,057 (1.2) 71,990 (0.9)
2015 47,840 (0.5) 72,417 0.6
2016 47,922 0.2 73,179 1.1
2017 49,502 3.3 73,841 0.9
2018 51,193 3.4 76,549 3.7
2019 52,007 1.6 79,586 4.0
2020 53,013 1.9 78,712 (1.1)
2021 54,572 2.9 81,303 3.3
Average annual increase 2012 – 2021 1.2 %1.2 %
*Information provided by Segal, the System’s actuary.
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12 PUBLIC EMPLOYEES’ RETIREMENT SYSTEM OF NEVADA – 2021
Statistics (continued)
Average Benefit Payments
Average Average
Average Number Years Average Monthly
Monthly of New of Service Age at Compensation
June 30 Benefit*Retirees*at Retirement Retirement at Retirement
2012 $2,603 3,226 19.23 64 $4,965
2013 2,654 3,241 19.05 65 5,024
2014 2,706 3,254 18.94 66 5,079
2015 2,765 3,555 18.87 66 5,129
2016 2,813 3,746 18.88 67 5,180
2017 2,860 3,630 18.88 67 5,228
2018 2,923 3,649 18.95 67 5,284
2019 3,004 3,752 19.00 68 5,349
2020 3,101 3,603 19.10 68 5,427
2021 3,309 3,975 19.17 69 5,499
Average Average
Average Number Years Average Monthly
Monthly of New of Service Age at Compensation
June 30 Benefit*Retirees*at Retirement Retirement at Retirement
2012 4,487 440 22.39 59 7,491
2013 4,637 409 22.33 59 7,623
2014 4,788 360 22.34 59 7,740
2015 4,961 437 22.39 60 7,862
2016 5,099 521 22.45 60 8,002
2017 5,236 541 22.46 60 8,144
2018 5,373 497 22.46 60 8,283
2019 5,554 528 22.52 61 8,434
2020 5,736 518 22.55 61 8,589
2021 6,290 737 22.59 61 8,769
Regular
Police/Fire
*Information provided by Segal, the System’s actuary
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2021 – PUBLIC EMPLOYEES’ RETIREMENT SYSTEM OF NEVADA 13
Participating Employers
2012
Percentage Covered of Total Participating Agencies Employees Rank System Clark County School District 30,788 1 31.2% State of Nevada 16,430 2 16.7 Washoe County School District 7,147 3 7.3
Clark County 6,977 4 7.1 Las Vegas Metropolitan Police Department 4,895 5 5.0 University Medical Center of Southern Nevada 3,336 6 3.4 City of Las Vegas 2,409 7 2.4 Washoe County 2,329 8 2.3 City of Henderson 2,032 9 2.1
University of Nevada, Reno 1,800 10 1.8 Subtotal 78,143 79.3 All other 20,369 20.7 Total 2012 (188 Agencies) 98,512 100.0%
2021 Percentage Covered of Total Participating Agencies Employees Rank System Clark County School District 31,669 1 29.6%
State of Nevada 17,260 2 16.2 Washoe County School District 7,196 3 6.7 Clark County 7,049 4 6.6 Las Vegas Metropolitan Police Department 5,748 5 5.4 Nevada System of Higher Education (NSHE) 3,645 6 3.4 University Medical Center of Southern Nevada 3,232 7 3.0
City of Las Vegas 2,549 8 2.4 Washoe County 2,525 9 2.4 City of Henderson 2,373 10 2.2 Subtotal 83,246 77.9 All othera 23,684 22.1 Total 2021 (214 Agencies) 106,930 100.0%
a In 2021 “All other” consisted of: Number of Covered Agency Type Agencies Employees State of Nevada and Related Agencies 22 599 Schools 66 10,556 Counties 14 2,966 Cities 17 4,522 Hospitals 7 888 Utility, Irrigation, and Sanitation Districts 18 880 Special Districts and Agencies 60 3,273
Subtotal 204 23,684 Largest Ten Participating Employers 10 83,246 Total 214 106,930
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14 PUBLIC EMPLOYEES’ RETIREMENT SYSTEM OF NEVADA – 2021
Reporting Standards
Financial data presented in this report is derived from the information contained in PERS’ ACFR. However,
it does not include all funds administered by PERS nor contain other information required to be in conformity
with GAAP. PERS’ ACFR is produced in conformity with GAAP. The ACFR and PAFR can be found on our website: www.nvpers.org.
CCoonnttaacctt IInnffoorrmmaattiioonn
Office Locations:
693 West Nye Lane Carson City, Nevada 89703 (775) 687-4200
Fax: (775) 687-5131
5740 South Eastern Avenue, Suite 120 Las Vegas, Nevada 89119 (702) 486-3900
Fax: (702) 678-6934
Toll Free: 1-866-473-7768 Website: www.nvpers.org
Business Hours
8:00 a.m. – 5:00 p.m., Monday – Friday