• Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Blog Home
  • Topics
    • Keystone Press Releases
    • Politics and Government
    • Legislation
    • Nevada News
    • Tourism & Gaming
    • Rural Nevada
    • Business
    • Opinion
  • Membership
  • Contact Us
  • About Keystone Nevada

Keystone Nevada Korner

Welcome to The Keystone Korner The Official Blog of Keystone Nevada

Home » EDITORIAL: Texas provides Nevada a model for pension reform

EDITORIAL: Texas provides Nevada a model for pension reform

June 28, 2021 by Pauline Lee

Las Vegas Review-Journal June 27, 2021 – 9:00 pm

Facing more than $14 billion in unfunded liabilities, Texas recently reformed one of its largest public employee pension systems. Given Nevada’s pension debt, lawmakers here should be looking to follow suit and proactively address a looming problem.

Around the turn of the century, the Employees Retirement System of Texas was fully funded. Not anymore. This year, it had an unfunded liability of $14.7 billion. History has proved that politicians typically ignore these types of problems — which makes them worse in the long term — or increase contribution rates.

Recently, Texas lawmakers did something better. They overhauled their state’s retirement system to ensure this won’t happen again, while protecting retirees and current employees.

Workers who previously would have enrolled in ERS will now have access to a cash balance plan. They will receive their own individual retirement account. Employees will contribute 6 percent of their pay, and employers will add 9 percent. Percentages are slightly higher for law enforcement employees, who retire earlier.

Employees will receive a guaranteed rate of return of 4 percent annually. Employees and the system will then split market returns up to a maximum annual return of 7 percent. The system will keep higher returns to prepare for future downturns.

This reform helps the state by reducing its downside risk when the market crashes. Instead of the current assumed rate of return of 7 percent, the guaranteed rate of return is a much more manageable 4 percent. For comparison, Nevada’s Public Employees’ Retirement System of Nevada assumes a 7.5 percent rate of return.

Texas’ current pension debt didn’t disappear. The state will be paying it down over the next few decades. That will be costly, but being proactive is a better alternative than letting the unfunded liabilities continue to grow. Over the next 30 years, the Reason Foundation projected this reform will save Texas $15 billion.

Texas isn’t the only state to pass substantial pension reform in recent years. Arizona, New Mexico and Michigan have done so as well.

Nevada lawmakers should be paying close attention. In 2020, Nevada PERS’ funding ratio was 76.1 percent. Its official unfunded liability was almost $14 billion in June 2020. That’s similar to the amount that spurred Texas lawmakers into action, and Texas’ population is nine times greater than Nevada’s. Presumably, the rising stock market has boosted PERS’ fiscal health, but a large problem remains.

Nevada lawmakers shouldn’t continue to passively accept higher contribution rates that hurt government employees and strap state and local government budgets. They need to make pension reform a priority.

Filed Under: Legislation Tagged With: employees retirement, employment, Legislation, Nevada Legislation, overhaul, pension, pension reform, Personal Finance, reform, texas, unfunded liabilities

Primary Sidebar

Connect with Us

  • Facebook
  • Instagram
  • LinkedIn
  • Twitter
Bootleg Bistro
Bootleg Bistro Ad
SLLC_Keystone_Blog-Ad_300x500_10%-Off-Repairs_05.19.21
CIOServices Ad 300x500-100
BRH Keystone Ad JPEG
Willow_Manor
Keystone Corporation Nevada

News Topics

  • Keystone Press Releases
  • Politics and Government
  • Legislation
  • Nevada News
  • Tourism & Gaming
  • Rural Nevada
  • Business
  • Opinion

Rural Nevada

As Nevada farmers retire, few taking their place as number of farms continues to shrink

November 13, 2023 By Courtney Holland

By Amy Alonzo, The Nevada Independent, November 13th, 2023 For more than 50 years, Rick and B. Ann Lattin operated Lattin Farms in Fallon, a … [Read More...] about As Nevada farmers retire, few taking their place as number of farms continues to shrink

Winnemucca braces for massive lithium mine

September 18, 2023 By Courtney Holland

By Ray Hagar, Nevada Newsmakers, September 18, 2023 Winnemucca, a town of more than 8,600 residents off Interstate 80 in Northern Nevada, is proud … [Read More...] about Winnemucca braces for massive lithium mine

Weather may have slowed January sales

April 8, 2023 By Courtney Holland

By The Record Courier Staff, April 4, 2023 For the third month in a row, Douglas County merchants reported a decrease in taxable sales, though not … [Read More...] about Weather may have slowed January sales

30 new projects in Pahrump: Arby’s, Chipotle, Midas Muffler, 3 convenient stores & more

March 29, 2023 By Courtney Holland

By Robin Hebrock, Pahrump Valley Times, March 28, 2023 Business is booming in the Pahrump Valley, with dozens of new companies looking to bring … [Read More...] about 30 new projects in Pahrump: Arby’s, Chipotle, Midas Muffler, 3 convenient stores & more

Opinion

EDITORIAL: Absentee ballot fraud concerns lead to new election

November 27, 2023 By Keystone Admin

By the Las Vegas Review-Journal Editorial Board, November 24, 2023 Reality is catching up to those who downplay the possibility of absentee and … [Read More...] about EDITORIAL: Absentee ballot fraud concerns lead to new election

OPINION: Be thankful we’re a little different in Nevada

November 27, 2023 By Keystone Admin

By Michael Schaus, The Nevada Independent, November 26th, 2023 Nevada is a state that’s difficult to explain to outsiders.  For many, our … [Read More...] about OPINION: Be thankful we’re a little different in Nevada

EDITORIAL: Red states, blue states — a tale of migration

November 27, 2023 By Keystone Admin

Tax rates matter. By the Las Vegas Review-Journal Editorial Board, November 20, 2023 U.S. migration patterns speak volumes about progressive … [Read More...] about EDITORIAL: Red states, blue states — a tale of migration

Tags

Adam Laxalt Biden Administration Business Business Columns Casinos & Gaming Catherine Cortez Masto Clark County Clark County School District Department of Employment Training and Rehabilitation (DETR) economy Editorials Education Elon Musk Gov. Joe Lombardo Gov. Steve Sisolak Governor's Office of Economic Development (GOED) Housing inflation Joe Lombardo las vegas Local Local Las Vegas Local Nevada mc-business mc-local mc-news mc-opinion Nevada Nevada Legislature News North Las Vegas NPRI Opinion Opinion Columns PAID Politics and Government Roe v. Wade school choice Sen. Catherine Cortez Masto small businesses Sports Tesla tourism unemployment rate Victor Joecks

Footer

Copyright © 2023 · Keystone Corporation - All Rights Reserved · Log in
Privacy Policy
By accessing this site, you are agreeing to our Terms of Use

The views, opinions and conclusions expressed by the authors of any article or post on the Keystone Korner are those of the author and do not necessarily reflect the opinions of Keystone Corporation or its officers and board members. Moreover, any reference to a person, party, product or entity does not constitute an endorsement or recommendation by Keystone Corporation or its officers and board members.