IPERS chief open to review, but urges caution on new retirement option

CEDAR RAPIDS — The CEO of Iowa’s public pension system said he does not object to a review of the retirement program for public employees, but cautioned of potential consequences of a voluntary contribution option — one of the recommendations from a citizen task force appointed by Gov. Kim Reynolds.

In a Wednesday interview, Iowa Public Employees’ Retirement System (IPERS) CEO Gregory Samorajski said the recommendations from the Iowa Department of Government Efficiency (DOGE) Task Force ultimately are directed to the governor and Legislature, and any decisions about additional study or changes to public employee retirement benefits will be made by policymakers.

“I don't think we'd have a problem, per se, with a study of IPERS or any other retirement system in Iowa or the country,” he said. “We think it's a great system. We think it provides benefits to all of Iowa.”

Caution on a voluntary defined-contribution option

One task force suggestion — to explore offering a strictly voluntary defined-contribution plan, similar to a 401(k), as an alternative for current or future public employees — should be weighed carefully, Samorajski said.

“Well, I think on that the devil's really in the details,” he said. Drawing on his experience working for Alaska’s retirement system, he noted that implementing a defined-contribution plan there “create[d] some real problems attracting public employees.”

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He emphasized that public employees already have access to a voluntary defined-contribution plan that complements, but does not replace, IPERS. Creating an alternative retirement track, he said, would require detailed analysis of its potential ripple effects.

“One of the little known facts is state employees and public employees already have an option for a defined contribution system,” he said, referring to the Retirement Investors’ Club, a voluntary plan that lets employees save in addition to IPERS. “It doesn't get you out of IPERS … but allowing it to be an alternative where you can opt out of IPERS could potentially affect the cost of providing benefits. If you allow people to drop out, it could cause prices for everybody else to go up.”

Samorajski stressed that IPERS doesn't have an opinion one way or the other on such an option and will administer whatever lawmakers decide. But, he added, “those are things I think policymakers … might want to look at. And we can certainly help provide data.”

He also emphasized that IPERS benefits are not at risk.

“The current IPERS benefit is secure for people who are IPERS members,” he said. “Regardless of what happens with any other option, voluntary or optional, their benefits are secure and no one's going to kick them out of the program.”

Reynolds has stressed that she does not intend to change IPERS benefits for current employees, reiterating this assurance as the DOGE recommendations were released in October after six months of study by a 15-member panel of business leaders, educators and elected officials.

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DOGE Task Force recommendations under review

The DOGE Task Force’s report recommended a recurring study of public-sector compensation and benefits, including pensions, and suggested examining whether Iowa should offer a voluntary defined-contribution track.

The group also proposed achievement-based pay for teachers and broader government efficiency measures.

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Reynolds has tasked her administration with reviewing the recommendations and determining which should advance as legislative proposals for the 2026 session. Lawmakers, too, are expected to explore ideas from the report.

Republican leaders have said they have no interest in making changes that would alter promised benefits for current public employees. Some Democrats have criticized the report’s pension-related suggestions, saying even voluntary changes could destabilize the system or undermine workforce recruitment.

The DOGE report notes that most private employers have shifted from traditional pensions to defined-contribution plans. Only about 15 percent of private-sector workers still have access to them, compared with roughly two-thirds who can participate in defined-contribution plans such as 401(k)s. Defined-contribution plans are typically less costly and more predictable for employers, the report says, and offer workers greater portability because their account balances follow them from job to job. By contrast, defined-benefit pensions like IPERS reward long service with a single employer, meaning workers who leave early in their careers often lose much of the potential value they would have accumulated by staying through retirement.

The report also highlights that Iowa already offers a choice for Board of Regents employees, who can opt into a defined-contribution annuity (TIAA-CREF) over IPERS — an option chosen by about 72 percent of state university employees in recent years, according to the report. That popularity, the task force says, suggests many workers value flexibility, potential investment gains and ownership of their retirement funds. Under that model, the employer contributes 10 percent of salary and the employee 5 percent, and participants retain full ownership of their retirement funds — including employer contributions and investment earnings — if they leave their position.

Task force members also point to the fragmented structure of Iowa’s five separate public pension systems and suggest that a unified governance model could improve consistency and accountability. Aligning benefits with more sustainable long-term models, they argue, would help manage future liabilities while maintaining commitments to current public employees.

‘Ahead of schedule’ paying down unfunded liability

Samorajski said IPERS’ current financial health places it among the strongest public pension systems in the country.

The system is 92 percent funded — in the top 10 percent nationally — and is ahead of schedule on its 30-year plan to pay down an unfunded liability of about $4 billion, he said. For many years, lawmakers set contribution rates too low, leading to the shortfall and to pension reforms enacted in 2012 that gave IPERS the ability to set annual contribution rates. The schedule, starting in 2014, aimed to pay off the liability and become fully funded by 2045.

“We're actually ahead of schedule,” Samorajski said. “If we stay on current track, we'll probably have it paid off by the middle of this coming decade.”

That’s due largely to stronger-than-expected investment performance, he said. The pension system saw a 9 percent return on investment in FY2024, while the plan assumes a 7 percent annual return.

IPERS today serves more than 400,000 active, inactive and retired members who were employed by state, city, county and school governments and agencies in Iowa.

The system distributes about $2.8 billion in benefits annually, with roughly $2.4 billion going to Iowans who live in the state.

“Even here in Linn County, the number is $153 million a year,” he said. “The fact that IPERS exists and is basically funneling money that comes in through the investment program from all over the world into the Iowa economy is one of the things that makes IPERS really good for Iowa.”

Samorajski also pointed to IPERS as a key tool for hiring and keeping public workers.

Technology upgrades and member outreach

Samorajski’s visit to Cedar Rapids is part of an effort to bring IPERS services closer to members.

On Wednesday, IPERS staff held one-on-one counseling sessions at the Cedar Rapids Public Library for members nearing retirement, as well as informational sessions about how the benefit formula works, the different membership classes and retirement options. A town hall with Samorajski was scheduled for Wednesday evening, giving members a chance to ask questions in person or submit them in advance.

“We used to do this all the time before COVID … now we're trying to get back to a system like that, where we'll go to the major cities in Iowa, starting here in Cedar Rapids,” Samorajski said.

Internally, Samorajski said IPERS has rolled out an AI-enhanced phone system designed to reduce wait times that can route calls more efficiently and offer callback options during busy periods. The system also is in the midst of a multiyear project to overhaul its pension administration platform.

Samorajski said the traveling outreach is intended to make the system easier to navigate for members across the state, with staff providing clarity and helping people understand the retirement system on which they’re counting.

Comments: (319) 398-8499; tom.barton@thegazette.com