Governor Brian Sandoval and the Public Employees Benefit Plan (PEBP) announced today that as a result of legislation passed during the 2011 legislative session, PEBP's unfunded liability has decreased by $874 million.
"There is no question we had to make difficult decisions during the session, but those tough choices have produced results for the state of Nevada today," Governor Sandoval said. "As a direct result of our targeted changes to PEBP, the program's unfunded liability has decreased by $874 million."
At the end of Fiscal Year 10 (FY10), the present value of benefits (the present value of all expected future benefits for current employees and retirees, defined as paid claims and expenses from the plan, net of retiree contributions) was $3.263 billion. Because of plan design changes, the current present value of benefits is $1.768 billion, a $1.4 billion decrease since last year.
The actuarial accrued liability (the state's liability should the benefit plan end today) was $1.874 billion at the end of FY10. Because of plan design changes, the current actuarial accrued liability is $977 million.
At the end of FY10, the unfunded liability (the actuarial accrued liability less the actuarial value of assets available to pay off the liability) for the state of Nevada was $1.8 billion. As a result of plan design changes, the current unfunded liability is $976 million
Other legislative changes made in 2011 eliminated future health care subsidies for new employees hired after January 1, 2012. While those savings are not included in the reductions above, it is estimated this change will save the PEBP system $235 million over the next 30 years.