The state’s treasurer says it’s time to impose lower limits on the pensions retired state workers may receive, but the manager of the Iowa Public Employees Retirement System or IPERS says the move would do little to reduce the fund’s future obligations. State Treasurer Michael Fitzgerald says under current policy 35-year state employees with salaries above a quarter of a million dollars can earn a maximum $160,000 annual pension once they retire.
“That is, I think, bad public policy,” Fitzgerald says. “I think that’s way too high. I think that’s a benefit we ought to scale back.”
Donna Mueller — the chief executive officer for IPERS — says about one percent of the 340,000 people who are either getting an IPERS pension or may get one in the future would be affected by Fitzgerald’s proposed limit.
“In the actuarial picture — very, very, very few,” Mueller says. “…It isn’t what’s causing the $5.9 billion or $5.8 billion unfunded liability.”
IPERS currently has about $25 billion in assets and paid out about $1.5 billion last year in benefits. Iowa’s pension fund for state workers, teachers and employees of local governments is in far better shape, financially, than other states, but is about 20 percent short of its future obligations. Mueller says that money’s not due today, just like an individual doesn’t have to come up with the money for their 30-year mortgage on day one. Legislators and the governor did act recently to increase current workers’ contributions into the system.
Mueller and Fitzgerald made their comments this weekend during an appearance on Iowa Public Television’s “Iowa Press” program.