‘No need for alarm’ on IPERS

There's no need for Iowa public employees to panic about their retirement benefits despite a 20 percent drop in trust fund assets.

“There's no need for alarm,” said Gov. Chet Culver, who noted the Legislature has given the Iowa Public Employees' Retirement System more flexibility in terms of additional investments.

“We'll make darn sure we'll have those benefits for the people who have earned them,” Culver said. “If we did nothing today, for 25 years or so everyone would get their full benefits. We still have $18 billion in the IPERS pension fund.”

His reaction to the news that the system's fund dropped from $22.4 billion to $17.9 billion in 12 months was echoed by lawmakers who emphasized that the problems aren't the 87,500 people receiving IPERS retirement benefits. Changes may need to be made to protect future retirees, though, said Sen. Steve Kettering, R-Lake View, and Rep. Mary Mascher. D-Iowa City.

For them, all options should be explored to maintain the integrity of the program initiated in 1953.

“I'm willing to look at everything and anything,” said Mascher, a retired schoolteacher. “Remember, the fund is solid. The fund is solvent. People are getting their benefits. We need to be proactive before we get into trouble.”

Kettering is concerned “there are a lot of rumors that are panicking people.” As long as the issues are addressed in a fiscally prudent manner, the fund will remain sound, he said.

It's too soon to know what changes are necessary, the lawmakers said, but Kettering, a banker, said the solution has to be within IPERS.

“I can't rule out anything, but I would be disappointed if folks turned to (an injection of taxpayer money) early in the game,” he said.

Other options that the IPERS Benefits Advisory Committee might recommend to the Legislature in November include increasing employer and employee contributions, reducing future benefits, changes to the rules that allow public employees to retire on full benefits as young as 55 and a tiered retirement system that would offer lower benefits to future employees.

In the private sector, Kettering said, people are delaying retirement and Social Security has raised the age for receiving full benefits. IPERS, which has nearly 320,000 members - more than one in every 10 Iowans - may have to consider similar changes, he said.

Membership includes 87,500 retirees, another 167,850 who are contributing and nearly 63,300 who have money in IPERS but no longer are contributing.

In fiscal 2008, IPERS paid nearly $1.1 billion in benefits, with more than $967.8 million –– more than 88 percent––paid in Iowa. The average monthly benefit payment paid to all retirees was $996; $1,489 for someone retiring in 2008.