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Old 10-03-2012, 22:42   #14
jpa
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Join Date: May 2001
Location: Las Vegas NV
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Quote:
Originally Posted by JohnBT View Post
"So if Nevada's pension is completely funded and solvent (it is)"

It must have happened last month, because Nevada has been underfunded for years.

www.pewstates.org/research/state-fact-sheets/nevada-widening-gap-update-85899399277
They keep using the full cost of all liabilities in determining the percentage of funding. If the state promises 75% of my salary 30 years from now, they're not going to take 75% of my current salary and put it in a bank account. They take 11.5% of my salary from me and match it to put 23% of my salary in investments. Assuming a 7% rate of return on that money for the next 30 years, one year's worth of contributions will be equal to 1.5x the total salary or 2 years worth of benefits. Adding in compounding returns over 30 years and continued contributions at the same rate will yield 31 years worth of payments at 75% of my salary after retirement.

How is that not solvent again?
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Last edited by jpa; 10-03-2012 at 22:43..
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