State workers’ retirement hit for $90 million in Lehman collapse

By Cy Ryan

Monday, March 2, 2009 | 12:51 p.m.

CARSON CITY – The state Public Employees Retirement System could lose $90 million with the collapse of the investment banker Lehman Brothers.

That comes on the heels of the recent announcement from state Treasurer Kate Marshall that Nevada stood to lose $50 million with Lehman Brothers when the firm filed for bankruptcy.

“Our total return numbers are better than the treasury because we invest differently,” said Dana Bilyeu, executive director of the retirement system. “We do long-term investment versus those short term collateral. We had a $90 million total but remember we’re an $18 billion fund.”

The loss was triggered by collapse of the junk bond market, Bilyeu said. She noted that the retirement system would be in the bankruptcy court, just like the treasurer.

“Two days before (Lehman) went bankrupt, they were triple rated,” Bilyeu said. “They were a big part of the financial market and everybody participated in Lehman’s. That’s the nature of it.”

And the system is monitoring the bankruptcy court.

Bilyeu said everyone always likes to talk the losses “but no one has asked me how much money we have made on Microsoft which is over 5,000 percent.”

Bilyeu appeared before the Senate Finance Committee today to explain her budget and tell the lawmakers that the premiums will be increasing for public employees. The rates for regular workers will go up one-half a percent for them and one-half for the government that employs them.

For police and firemen, the rates will be going up 1.7 percent for each the public safety workers and for their employers. The premiums are increased to meet their actual evaluation, Bilyeu said.

She said this was just to continue the present benefits. Senate Minority Leader Bill Raggio, R-Reno, said the Legislature has been cautious in the past not to add benefits. Bilyeu said there have not been any new benefits since 2001.

There has been some controversy over government workers making more than $100,000 a year. She said only 2 percent of the regular employees earn more than $100,000 while 17 percent of the police and firemen make that much or more.