A projected shortfall in Iowa’s pension fund for public employees may now be approaching $7 billion.
Workers and lobbyists crowded a committee room at the statehouse to hear the latest figures on the projected shortfall in the Iowa Public Employee Retirement System known as IPERS.
IPERS CEO Donna Mueller says for more than ten years workers were not putting enough money into the system and the alarm bells were ignored.
“Since 2002 until 2014 the contributions paid into IPERs did not meet with the what the actuary stated every year was required to fund the benefits,” Mueller says. The shortfall is $5.6 billion, but analysts have lowered their expected investment returns, so the shortfall could reach seven billion dollars. Mueller says the lower than needed contributions led to the problem.
“It hasn’t been necessarily bad management. There were bad decisions in ignoring the alarm bells that the static contribution rate should be changed. That was ignored for too long,” according the Mueller. Two recessions and longer life-spans have also contributed to the shortfall.
Changes were adopted in 2010 to bolster the fund, but Mueller said improvement in the bottom line doesn’t happen overnight. Some Republicans have recommended revising IPERS in a way that public workers oppose.
Thanks to Joyce Russell Iowa Public Radio