Updates

April 28, 2020
28 Apr 2020

Political Update – April 28, 2020

Nevadans could see $6 billion increase in pension debt, as economy falters

Robert Fellner
Nevada Policy Research Institute

April 23, 2020

Nevada Policy has written extensively on the hidden risk associated with Nevada’s public pension system (PERS).

A new tool from the Reason Foundation allows users to get a sense of the magnitude of the risks associated with current funding practices. According to their projections, if Nevada PERS records a 5 percent investment loss this year — a distinct possibility given their current status — the system’s debt will explode from $14 billion to nearly $20 billion.

This would require a significant increase in the costs imposed on taxpayers and public workers, continuing the decade-long trend of requiring both groups to pay more, while getting less in return.

This outcome reflects a system which intentionally pushes costs onto future generations. The most prominent example of this approach, and most dangerous, is the treatment of assumed future investment returns as certain. Consequently, when investments do underperform, like in the current economic recession, the resulting cost increase only appears after the fact — precisely when taxpayers and government employers can least afford it.

A proper funding approach would recognize the impact of investment returns after they had been realized, rather than before. Such an approach is mandated for private U.S. pension plans as well as public and private pension plans in most of Canada and Europe.

To get a sense of the full range of possibilities, and thus the range of risk being imposed on public workers and taxpayers, whether they like it or not, be sure to explore the new interactive tool from the Reason Foundation: Previewing the COVID-19 Impact on State Pension Plans.

*IMPORTANT*

Quote of
the week

 


Quote:

“…if Nevada PERS records a 5 percent investment loss this year — a distinct possibility given their current status — the system’s debt will explode from $14 billion to nearly $20 billion.”

Robert Fellner

Settelmeyer calls on Sisolak to talk about re-opening Nevada

Geoff Dornan
Nevada Appeal

April 16, 2020

Senate Minority Leader James Settelmeyer, R-Gardnerville, this week sent a letter to Gov. Steve Sisolak asking him to begin explaining to the public and Legislature his plan to re-open Nevada’s businesses and the economy.

In Elko, impatience is a virtue

Reece Keener
Elko Mayor

April 16, 2020

Dear Neighbors, Just as we crossed the first finish line established by the “Stay Home for Nevada” initiative, we entered the second phase that was set to expire on April 30th. Stunningly, the goal posts were moved for a third time, to a vague and nebulous point somewhere on the distant horizon: “14 consecutive days of declining infection rates.”

 


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