Governor Chet Culver says there are no big changes in store for IPERS, the Iowa Public Employees Retirement System, to ensure future beneficiaries get their benefits. IPERS provides retirement benefits for government workers, including teachers, fire fighters and cops. There are over 300-thousand active and retired “members” in the IPERS system today.
“There’s no need for alarm,” Culver says. “We’ve already taken some steps, legislatively, to give IPERS a little more flexibility in terms of some additional investments and I doubt that we’ll have to do anything next (legislative) session other than to hope that we continue to have economic recovery.”
The stock market collapse put a huge dent in IPERS. On June 30th of 2008, the IPERS fund was worth over $22-billion, but a month and a half ago the IPERS fund was worth just under $18-billion. The fund is paying out over a billion dollars in pension benefits annually. A consultant hired by IPERS fund managers has suggested cutting IPERS benefits for future retirees or having the state plug general state tax dollars into the system.
Governor Culver says the solvency of the IPERS fund is “one of his top priorities. “In fact, that’s why I signed legislation in the last couple of years that allows IPERS to have a little more discretion in terms of making sure that pension fund is solvent in the future,” Culver says. “…Number two if we did nothing…today, for 25 years or so everyone would get their full benefits.”
According to Culver, there’s a another factor that makes him skeptical of the need to deposit general tax dollars into the IPERS fund.
“We’ve had the best rally in the (stock) market since 1938…While we’re not where we projected we would be, we’ve made some huge strides in the last three months — billions of dollars back into IPERS because of the rally in the market,” Culver says, “so I’ll continue to work with legislative leaders and the treasurer…and the team at IPERS and we’ll make…sure that we have the benefits for those that have earned them.”
IPERS was created in 1953 to serve as a retirement system for public employees in Iowa. Officials in many other states are wrestling with their retirement systems. Utah’s pension system for public workers took a 22 percent hit in 2008. New York’s declined by 26 percent. The drop in the Iowa Public Employees Retirement System was about 19-and-a-half percent.