PUBLIC EMPLOYEES’ RETIREMENT SYSTEM OF NEVADA

PUBLIC EMPLOYEES' RETIREMENT SYSTEM OF NEVADA

A COMPONENT UNIT of the STATE of NEVADA

COMPREHENSIVE ANNUAL FINANCIAL REPORT

For the Fiscal Year Ended June 30, 2018

PUBLIC EMPLOYEES' RETIREMENT SYSTEM OF NEVADA

A COMPONENT UNIT of the STATE of NEVADA

COMPREHENSIVE ANNUAL FINANCIAL REPORT

For the Fiscal Year Ended June 30, 2018 Tina Leiss

Executive Officer

693 West Nye Lane Carson City, Nevada 89703

(775) 687-4200 5740 South Eastern Avenue, Suite 120

Las Vegas, Nevada 89119 (702) 486-3900

Prepared by PERS Staff

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MISSION STATEMENT

It is the mission of the Public Employees' Retirement System to: Provide public workers and their dependents with a retirement program that provides a reasonable base income for retirement or for periods where a disability has removed a worker's earning capacity. Encourage those workers to enter into and remain in government service for such periods of time to give public employers and the people of the State of Nevada the full benefit of their training and experience. Provide an orderly method of promoting and maintaining a high level of service to the public through an equitable separation procedure available to employees at retirement or upon becoming disabled.

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Table of Contents

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Introductory Section Letter of Transmittal ........................................................................................................................ 9 Administrative Personnel .............................................................................................................. 15 Organizational Chart ..................................................................................................................... 16 Certificate of Achievement in Financial Reporting....................................................................... 17 Public Pension Standards Award................................................................................................... 18

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Financial Section Independent Auditor's Report ....................................................................................................... 21 Management's Discussion and Analysis ....................................................................................... 24 Basic Financial Statements Statement of Fiduciary Net Position.................................................................................. 28 Statement of Changes in Fiduciary Net Position............................................................... 29 Notes to Financial Statements ........................................................................................... 30 Required Supplementary Information Schedule of Changes in Net Pension Liability and Related Ratios...................................48 Schedule of Employer Contributions ................................................................................ 50 Schedule of Investment Returns ....................................................................................... 50 Notes to Required Supplementary Information ................................................................ 51 Other Supplementary Information Schedule of Administrative Expenses .............................................................................. 58 Schedule of Investment Expenses ..................................................................................... 59 Schedule of Payments to Consultants................................................................................ 59 Combining Schedule of Fiduciary Net Position ................................................................ 60 Combining Schedule of Changes in Fiduciary Net Position ............................................. 61

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Investment Section Investment Consultants and Counsel............................................................................................. 64 Consultant's Report of Investment Activity.................................................................................. 65 Investment Review ........................................................................................................................ 66 Investment Performance vs. Objective ? Individual Fiscal Year Return ? Chart 1 ...................... 70 Investment Performance vs. Objective ? Annualized Total Returns ? Chart 2............................. 70 Asset Mix ? Chart 3....................................................................................................................... 71 Fair Value of Investments by Investment Manager Directive ? Chart 4.......................................72 List of Largest Assets Held ? Chart 5 ........................................................................................... 73 Summary of Actual Performance vs. Objectives ? Chart 6........................................................... 74 Investment Performance vs. Objective, U.S. Equity ? Chart 7 ..................................................... 75 Investment Performance vs. Objective, International Equity ? Chart 8 ........................................ 75

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Investment Performance vs. Objective, U.S. Fixed Income ? Chart 9..........................................76 Investment Performance vs. Objective, Private Markets ? Chart 10 ............................................ 76 Schedule of Fees and Commissions ? Chart 11 ............................................................................ 77

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Actuarial Section Actuarial Certification Letter ........................................................................................................ 81 Summary of Actuarial Assumptions and Methods........................................................................ 86 Schedules of Funding Progress .................................................................................................... 95 Retirement System Membership ? Schedule 1.............................................................................. 96 Active Member Valuation Data ? Schedule 2 ............................................................................... 96 Pay Status Participants Added to and Removed from the Rolls ? Schedule 3.............................. 97 Schedule of Funded Liabilities by Type (Solvency Test) ? Schedule 4........................................ 98 Analysis of Actuarial Experience ? Schedule 5 ............................................................................ 99 Schedule of Employer Contributions ? Schedule 6 .................................................................... 100 Distribution of Retired Members and Beneficiaries by Type .................................................... 101 New Retired Members ................................................................................................................ 102 Governmental Accounting Standards Board (GASB) Statement No. 67 Actuarial Certification Letter .................................................................................................. 103 Schedule of Net Pension Liability .............................................................................................. 104 Schedule of Sensitivity of the Net Pension Liability to Changes in the Discount Rate ............. 104 Schedule of Changes in Net Pension Liability ........................................................................... 105 Schedule of Contributions .......................................................................................................... 106

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Statistical Section Overview ..................................................................................................................................... 109 Changes in Net Position ? Schedule 1......................................................................................... 110 Benefit and Refund Deductions from Net Position ? Schedule 2 ............................................... 112 Contribution Rates ? Schedule 3 ................................................................................................. 114 Retired Members by Type of Benefit ? Schedule 4 .................................................................... 115 Average Benefit Payments ? Schedule 5..................................................................................... 117 New Retired Members Average Benefit Payments ? Schedule 5-A .......................................... 118 Average Age at Retirement ? Schedule 6 ................................................................................... 122 Number of Active Members Per Retiree ? Schedule 7 ............................................................... 122 Schedules of Funding Progress ? Schedule 8.............................................................................. 123 Participating Employers ? Schedule 9.........................................................................................124 Principal Participating Employers ? Schedule 10 ....................................................................... 127 Average Age and Service Statistics for Members ? Schedule 11 ............................................... 128 Average Salaries for Members ? Schedule 12 ............................................................................ 128

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Plan Summary ....................................................................................................................................... 131

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INTRODUCTORY SECTION

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