State Fact Sheet
The Trillion Dollar Gap: Nevada
Underfunded State Retirement Systems and the Roads to Reform
Nevada's management of its long-term pension liability is cause for serious concern and the state needs to improve how it handles its retiree health care and other benefit obligations. Even though it paid at least 90 percent of its actuarially required contribution each year since 1997, the Silver State in 2008 had only 76 percent of the assets needed to pay its total pension bill, below the 80 percent benchmark that the U.S. Government Accountability Office says is preferred by experts.
Because Nevada conducts actuarial valuations for its pension plans on December 31, the current funding level more accurately reflects the decline in assets from the 2008 calendar year than do plans valued on June 30. In 2009, the state passed a law that enforces stricter eligibility requirements and higher reductions for early retirement, and the law changes the way benefits are calculated for new public employees.
Meanwhile, Nevada has a $2.2 billion bill coming due for retiree health care and other benefits and, like 19 other states, by 2008 it had failed to set aside any assets to cover these costs.