Dividends
In an effort to offset the negative impacts of inflation, Iowa lawmakers passed a law (Iowa Code Section 97B.49F) to provide lump-sum payments called dividends to retired IPERS members. These dividends are paid once each year, and do not increase a retiree’s monthly benefit amount.
November Dividend. This dividend is provided to members who retired June 30, 1990 or before, and is aptly named for the month in which it is issued! Guaranteed by law, this dividend is based on a formula that applies a multiplier to the base payment. Although a base payment is guaranteed, increases are not.
Favorable Experience Dividend (FED). The FED, or more formally the Favorable Experience Dividend, is issued to members who retired after June 30, 1990, or to their beneficiaries. To qualify for this dividend, you must be retired for one full calendar year. Unlike the November Dividend, the FED is not a guaranteed payment. Here’s how this January-issued dividend is calculated:
| FORMULA: |
| December Benefit |
X |
12 Months |
X |
FED Multiplier (not to exceed 3%) |
X |
Full Calendar Years Retired |
= |
FED |
| |
| EXAMPLE: |
| $1,000 |
X |
12 Months |
X |
1.07% |
X |
2 Calendar Years Retired |
= |
$256.80 |
Note: The FED multiplier in this formula is determined by IPERS and is linked to current contribution rates and other factors. |
