IPERS assets up, shortfall down

DES MOINES - The fiscal health of Iowa's largest public employee retirement system improved in the past year, and credit is being given to a market that exceeded expectations as well as action by the retirement program's overseers.

The Iowa Public Employee Retirement System, or IPERS, grew by more than $3 billion, to $28 billion, in the past fiscal year and is now 82.7 percent funded, up almost 2 percent from a year ago, according to the system's annual actuarial report that was released Thursday.

An improved market helped reduce the system's shortfall to $5.5 billion, which is down by roughly $300 million from a year ago.

This is the first time the shortfall, known as the unfunded liability, has decreased since 2008, before the Great Recession.

And for the first time in a dozen years, contributions to the system matched expectations, so no dollars were added to the unfunded liability.

'This is all very positive news,” said Patrice Beckham, an actuary with Cavanaugh Macdonald Consulting.

IPERS has more than 340,000 members and paid $1.8 billion in retirement benefits during the most recent fiscal year, according to the organization. The average beneficiary, the group says, retires after 22 years of service and earns an annual pension of $16,000.

Benefits were reduced and contributions increased in 2010 to help reverse the system's trend of falling deeper in the hole. Its funding level bottomed out at 79.9 percent in 2011 and 2012 before increasing each of the past two years. It was at 89.1 percent in 2008, just before the recession, and 97.7 percent in 2000.

'Key measurements show IPERS is performing exactly as intended to provide secure lifetime retirement benefits for Iowa's public employees,” Donna M. Mueller, the system's CEO, said in a statement. 'IPERS' recovery from the Great Recession is evident in the numbers, validating that the plan is well-managed, sustainable and continuing to grow.”