The state’s top two financial officials say it’s time to re-establish upper limits or “caps” on the pension checks government employees draw from the Iowa Public Employees Retirement System. State Treasurer Michael Fitzgerald is a voting member of  the IPERS board of directors.

“IPERS is important to the state of Iowa and the IPERS retirement system must be protected,” Fitzgerald says. “You know, I think there’s 330,000 Iowans (who) depend on IPERS one way or the other.”

In 1998, the legislature and the governor agreed to get rid of the limits or caps on pensions for teachers, local government workers and employees in state government.

“Well, what happened? They took that cap off and now you have some employees in state government that make as much as $250,000 can retire and get like $160,000 a year pension,” Fitzgerald says. “That’s broke the bank.”

Fitzgerald advocates a cap that would limit a yearly IPERS pension to $60,000. State Auditor Dave Vaudt supports that kind of a move and, in addition, Vaudt suggests some of the state government surplus should be used to shore up the pension system.

“At the end of fiscal year 2000, we were 98 percent funded for that pension plan and at the end of 2011, we’re only 80 percent funded,” Vaudt says. “…We’ve gone from about a $327 million funded liability at the end of fiscal year 2000 to a $5.7 billion shortfall at the end of fiscal year 2011.”

Vaudt is quick to say “in the short term,” the system is o.k., but it’s time for state officials to start making plans for the future.

“A lot of times people will say, ‘Well, we’re not as bad as some other states,’ and I will agree. Illinois is one of the worst states, which is only about 50 percent funded,” Vaudt says of the pension system run by the State of Illinois. “But I also say: ‘If your child comes home from school and tells you they got a D on a math exam today, but Johnnie next door got an F, should that make you feel better?’ No.”

Any changes in IPERS benefits must be approved by the legislature and the governor. Republicans in the House and Governor Branstad have talked about reducing taxes next year rather than using the state government surplus to shore up the state pension system as the auditor, who is a Republican, suggests. Vaudt and Fitzgerald, who is a Democrat, made their comments today during taping of the “Iowa Press” program which airs tonight at 7:30 on Iowa Public Television.