IPERS’ 2008 resolutions

Donna M. Mueller, IPERS CEO

A successful retirement system makes promises it must keep today—and 30 years from now. IPERS adopts a strategic plan of how we will keep our promises. The goals in our plan become our resolutions for the new year.

We resolve to preserve benefits by prefunding them and finding a way to maintain the buying power of pensions.

IPERS benefits should be prefunded—public employees contribute for their own retirements during their working lives so we do not shift the cost of their benefits to future generations.

Prefunding promised benefits takes the right combination of contributions and investments. I am asking the legislature for the authority to adjust contribution rates for regular members with a 0.5 percentage point maximum change each year. Currently the legislature sets the rate for regular members, and IPERS sets contribution rates for public safety members, whose promised benefits are prefunded fully.

Although the November dividend and Favorable Experience Dividend (FED) for retirees help offset some of the negative impact inflation has on a fixed pension income, we have not been able to increase the dividends to keep up with inflation. Also, the FED is not a guaranteed payment. During 2008 I will work with the IPERS Benefits Advisory Committee to explore affordable ways to offset increases in the cost of living that we can recommend to the legislature.

We resolve to continue providing quality services.

We will continue to have an independent company, CEM Benchmarking Inc., review how well we provide services. I’m proud that in the past CEM rated IPERS’ services high while finding we were one of the lowest-cost service providers among retirement systems of a similar size.

As the number of retirees continues to increase, we must become more efficient to continue providing low-cost, quality services. We are installing new technology that will improve services to members and employers without increasing staff.

We resolve to prepare for the future.

Experts expect baby boomers to approach retirement differently than past generations. Boomers may be more likely to keep working but change careers, take a part-time job, or phase in retirement by reducing work hours in their current jobs. We must review how to keep IPERS benefits relevant but affordable.