Nevada’s Public Employee Retirement System (NVPERS) saw an 11.8% increase in its preliminary fiscal year 2017, which ended on June 30, bringing the fund’s total asset value to $38.5 billion.
Gains in its domestic and international equities portfolio drove the strong results, Steve Edmundson, investment officer at NVPERS, told CIO. “As those markets increased, so did the returns from our fund,” he said. “The S&P 500 was up 17.5 [points] in the fiscal year and non-US stocks carried the day. Our US stock portfolio was up 17.8% and our international stock portfolio was up 20.5%.”
Gains for the year outpace the agency’s 8% target rate. However, NVPERS failed to meet its targets in 2016 and 2015 when it returned 2.3% and 4.2%, respectively. In fiscal year 2014, it saw a return of 17.6%, according to the Las Vegas Review-Journal, which first reported the results for the 2017 fiscal year.
NVPERS’ US stock portfolio is indexed to the S&P 500. Its international stock allocation is indexed to the MSCI — Europe, Australasia, and Far East index (EAFE). “We are 100% indexed in all of our public market assets,” Edmundson said.
The funding ratio for the plan, which covers nearly all government employees in Nevada, will be updated at a November meeting of the board overseeing the plan. The overall funded ratio increased to 74.1% in 2016 from 73.2% the prior year, according to the Review-Journal.
The strong gains in assets for NVPERS come at a time when state pensions’struggles to meet their obligations have been mounting. The estimated funded ratio for 131 retirement systems sponsored by 50 states and the District of Columbia fell to 69% from 73% the prior year, according to a recent report by Wilshire Consulting.