PERS earnings rose 21 percent

State lawmakers learned Monday that the Public Employees Retirement System of Nevada generated a 21 percent return on its investments for fiscal 2011 - the highest return in 25 years.

Chief investment officer Ken Lambert said that raised the PERS portfolio to a total of $25.2 billion. That is a $4.3 billion increase in the last 12 months and a $9.5 billion increase from the portfolio's low point in March 2009.

Those numbers are for regular employees in the PERS system, which provides retirement benefits to more than 180,000 state, county, local and school district public employees.

Lambert said the public safety workers and judicial employee portfolios also experienced near-21 percent increases - a record for those categories. Those two funds are much smaller than the regular PERS fund. The legislative fund is about $4.5 million, and the judicial fund $56.7 million.

At the same time, however, the regular fund experienced a slight decline in its funding ratio - the amount of money available compared to the absolute total liability if all workers were to retire. The ratio fell from 71.2 percent to 70.6 percent, while the police/fire fund increased its funding ratio from 67.8 percent to 86.4 percent.

PERS chief Dana Bilyeu said during the past 27 years, PERS has maintained an average 9.5 percent annual return on investments.

Since 1997, PERS investment have lost value just four times. The most serious loss was in fiscal 2009, when the portfolio dropped by 15.8 percent. The other three negative years were all less than 4 percent and occurred during recessionary periods.

Members of the state Interim Retirement and Benefits Committee also were told the Public Employee Benefits Program is planning no increase in health insurance premiums this coming plan year despite the fact that experts expect about 9 percent medical inflation.

PEBP Director Jim Wells said a premium increase shouldn't be needed because the program has $43.3 million in excess reserves. He said that excess will be reduced or eliminated by June 30, 2013.

PEBP provides health insurance to state workers and their families.

He said the excess reserves built up because his staff and actuaries had projected a double-digit increase in claims expense but the program actually experienced a net decrease in claims.

According to the report presented at Monday's committee meeting, PEBP ended fiscal 2011 with $121 million in total assets and $44.4 million in total liabilities, leaving the program with net assets of $76.6 million.