Capitol Letters: A lot of talk about IPERS future

State Rep. Megan Jones

The Iowa Public Retirement System is the largest public retirement system in Iowa. There's been a lot of talk about IPERS and the recommendations by the DOGE committee. I have publicly said I do not support the committee’s IPERS recommendations.

And it sounds like the proposals have zero support from leadership, so they will not be moving forward.

So, there is not much to talk about in the DOGE committee’s IPERS proposals. But, let's take a minute and learn more about IPERS and why it's such a good system.

It was established as an independent agency within the executive branch of the state government. The goal of the system is to provide defined benefits for Iowa’s public employees in retirement. IPERS is a pension system which requires its members to contribute to the fund and once vested in the system the benefit received after retirement from public employment is based on years of service and their average salary towards the end of their employment.

IPERS invests the money in the fund to grow the fund to provide the expected benefits of its retired members. As the system has gotten older, employees retire, new employees start, and growth has taken place the fund has grown to over $42.9 billion in actuarial value (more than 4.5 times larger than the FY2026 state budget). There are over 400,000 active members and retirees who comprise the system.

With that many Iowans anticipating their benefits and that large of a fund it is vitally important that there is oversight and accountability for how the fund is managed. Iowa Code has several statutory requirements to ensure qualified management of the system and provide oversight of the management.

Chief Executive Officer

IPERS CEO is appointed by the Governor and confirmed by the Senate to a four-year term. The Governor has the authority to remove the CEO for malfeasance or for any reason that would make the individual unfit to discharge the duties of the position. Iowa Code sets qualification requirements for nominees such as previous management-level pension fund experience and demonstrated knowledge of all aspects of pension fund administration.

Investment Board

Iowa Code also created the IPERS Investment Board with the duty to establish the investment policy and review the implementation of the policy annually. The board publicly meets every year to review and establish the investment plan of the system with established goal statement. The next such meeting will be in September. The Investment Board shall review and approve any contract of IPERS with an investment manager or investment consultant. The board is included in the review of the performance of the Chief Investment Officer. Additionally, the board selects and hires an actuary to perform annual report on the valuation of assets of the system. The board meets quarterly to review and assess the performance of the fund as shown below.

Annual Actuarial Reports

Every year an actuarial valuation performed in order to measure the assets and liabilities of the system, determine the funded status of the fund, determine the actuarial contribution rates if necessary, analyze the actual performance versus the expected performance of the last fiscal year, and report on trends and analyze risks to the fund. These reports take a record of the system at the end of each fiscal year to compile the actuarial calculations in comparison to the same date the previous year. Fiscal Year 2024 actuarial report can be found at https://ipers.org/media/53/download?inline. 

Annual Audits

Every year the system is required to undergo an audit to ensure the accuracy and reliability of its financial statements and compliance with federal and state laws and regulations. The Fiscal Year 2024 Audit can be found https://www.auditor.iowa.gov/reports/file/79394.pdf. 

Public Retirement Systems Committee

The Public Retirement Systems Committee is a statutory committee composed of 10 legislators, 5 senators (3 from the majority party and 2 from the minority party) and 5 representatives (3 from the majority party and 2 from the minority party). The committee is required to continuously survey pension and retirement developments and periodically review the state’s policy and standards in view of these developments and changing economic and social conditions. The committee will meet again this year after the release of the actuarial reports.

The responsibility of ensuring that the system is healthy and performing well is constant. That is why there are regular Investment Board meetings, reviews of performance and policies, legislative review of the performance, and high standards and regulations for the administration of the fund. Overall, the system continues to move in a positive direction and the current funded ratio is the highest funded ratio since the “Great Recession”

IPERS is a reliable and stable pension system than many Iowans have earned through many years of hard work and service. It needs to remain that way and those commitments need be honored.

Contact Jones by email: megan.jones@legis.iowa.gov