The Truth about IPERS

Iowa Public Employees’ Retirement System (IPERS) has been in the news recently, and you may have some questions about what you’ve read. IPERS is committed to keeping its members and the community informed. This site was created to help members, lawmakers, and all Iowans understand the facts about IPERS.

1 in 10 Iowans 
IS AN IPERS MEMBER.

Why IPERS is important for Iowa

IPERS, a $32 billion trust fund, was created in 1953 to attract and retain public employees. These employees teach our children, maintain our roads and parks, care for our most vulnerable citizens, and protect Iowans across our state. The benefits paid to retirees fuel local economies, creating a steady flow of money to Main Street. IPERS is a defined benefit plan, which means retirees receive a fixed, reliable benefit payment each month during retirement.

IPERS PAYS MORE THAN $2 BILLION
TO RETIREES ANNUALLY.

Why IPERS is in the news

The early 2000s brought the 'perfect storm' of new mortality tables, which increased liabilities, and the dot com recessions. A contribution rate change was needed to keep IPERS healthy, but the Legislature chose to delay a contribution increase. As a result, a shortfall, or unfunded actuarial liability (UAL), developed. This shortfall means that, if ALL future retirement benefits had to be paid TODAY, there wouldn't be enough money.

IPERS IS ON TRACK TO
CLOSE THE SHORTFALL.

(source)

What IPERS is doing about it

In 2012, four key changes were enacted to address the shortfall and close the funding gap within 30 years. The shortfall didn’t happen overnight, and it can’t be paid off overnight. IPERS is like an ocean liner; it cannot turn on a dime. But, given the opportunity to stay the course, IPERS will reach full funding.

PENSION REFORM, ENACTED
IN 2012, WILL ELIMINATE THE
SHORTFALL WITHIN 30 YEARS.

What’s on the horizon?

Some lawmakers and lobbyists want to explore moving public employee pensions from a defined benefit (DB) to a defined contribution (DC) plan. Changing from a DB to a DC would not eliminate the shortfall, and would make it worse in the short-term. The retirement benefits currently promised to employees will still need to be paid. Switching to a DC and barring new employees from entering the DB plan creates additional challenges to making up the shortfall.