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IPERS’ FY2018 Investment Performance Yields 7.97 Percent (updated)

August 20, 2018

Des Moines, Iowa — The Iowa Public Employees’ Retirement System (IPERS) released its fiscal year 2018 investment performance today. IPERS’ investment portfolio returned 7.97 percent, net of fees, for the fiscal year ended June 30, 2018, exceeding its Policy Benchmark return by 0.18 percent. The result exceeded the actuarial return assumption of 7.0 percent. IPERS’ Trust Fund balance stood at $32.26 billion on June 30, 2018. IPERS’ investment earnings pay approximately 70 percent of the benefit payments.

“IPERS must have a long-term focus — 30 to 50 years out — because we pay member benefits for a lifetime,” stated IPERS’ CEO Donna M. Mueller. “Our 30-year annualized return is 8.72 percent which is a much more significant measure than the 12-month performance of FY2018. IPERS’ funded ratio is the next big indicator of financial health will be available in December as part of the annual actuarial valuation.”

IPERS’ current funded ratio is 81.4 percent based on FY2017 data. A funded ratio of 80 percent or greater is considered financially healthy by industry standards.

IPERS’ actuary, Cavanaugh Macdonald Consulting in Bellevue, NE, is currently conducting the valuation. Patrice Beckham, principal and consulting actuary, will present IPERS’ 2018 actuarial valuation findings at the IPERS Investment Board’s meeting scheduled for December 6, 2018. IPERS’ updated funded status will be included in the valuation report.

As the largest public pension system in Iowa, IPERS has approximately 350,000 members, including 117,000 retirees. IPERS paid $2 billion in retirement benefits during the last fiscal year, with $1.7 billion paid in Iowa. IPERS is a prefunded system — contributions from employees and employers are pooled and invested over the member’s career. The average IPERS member retires after 22 years of service, earning an annual pension of $16,000.

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