Nevada’s Public Employees’ Retirement System (PERS) Board hears more good news as it relates to the state’s public pension fund and how well it performs among its’ peers.
The Nevada PERS Board received confirmation at their January 2020 meeting that Nevada’s Public Employees’ Retirement System continues to out-perform their peers throughout the U-S. During a report about the agency’s rebalancing program. Investment Officer Steve Edmundson explained that the primary purpose of rebalancing is that it keeps their risk and return profile in line with their asset allocation. He reiterated PERS’ position of buying low and selling high saying it’s a natural byproduct of their rebalancing program. He said the PERS’ portfolio has hit a rebalance trigger three times over the past three calendar years starting in November 2017 when they hit an extended period of equity market gains causing a policy trigger that led them to sell of nearly $2 billion in stocks, reallocating those assets into U.S. Treasuries. Then in 2018 PERS, when coming within 20 basis points of an official bear market another rebalance trigger was reached leading PERS to buy $950 million in stocks at a level 6-percent lower than when stocks were sold in 2017. As a direct result of these board policies, the 3 rebalancing events collectively added more than $300 million to the System’s assets.
In another report Edmundson explained how PERS’ total investment costs are estimated to be more than $171 million per year less than the average, large public pension fund. He again reiterated that it’s because they buy low and sell high, as evident in the last 3 years of their rebalancing efforts previously mentioned. He concluded his report saying the PERS investment program has delivered long-term results that are among the most competitive in the industry while employing the smallest staff and incurring the lowest expenses.
Julia Bonafede, President of Jobs Peak Advisors, an investment advisory service concurred with Edmundson’s report saying that the Board should be very proud of the agency’s accomplishments and where they stand in comparison with their peers.
There was also a report about the agency’s new pension administration system project update showing it to be on schedule, and Tim Coyne, PERS’ Operations Officer reported the project will be a 2-phase project over a period of 5 years. This system is sorely in need of updating because of so many different tiers of payouts in PERS due to changes made by the Nevada State Legislature during recent sessions.
The next PERS meeting is February 20.