Nevada’s pension system would pay $1.2 billion more over the next two fiscal years than its current obligation to retirees to convert its $24.7 billion plan to one based on employee contributions, a report says.
That’s because switching to a so-called defined- contribution plan, such as the 401(k) offered by companies, would speed up the need for state payments to cover existing benefits, according to a report yesterday to Nevada’s Public Employment Retirement System.
Governor-elect Brian Sandoval, 47, a Republican, has pushed for an employee-supported plan to cut costs for the fund, which has $10.4 billion less than needed to pay benefits, documents for a state bond sale this month show. Alaska, Michigan and the District of Columbia already require defined-contribution plans, said the Nevada report by Segal Group Inc., a Chicago-based consultant.
“We know there are no short-term savings,” Dana Bilyeu, executive officer of the Nevada system, said in an interview from Carson City. “In fact, there is a short-term higher cost.”….
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