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IPERS' FY2018 Funded Ratio Climbs to 82.4 Percent

October 24, 2018

Des Moines, Iowa — The Iowa Public Employees’ Retirement System (IPERS) released its fiscal year 2018 funded ratio today; it has risen to 82.4 percent. This is a clear indication that the fund is strong and secure. A funded ratio of 80 percent or greater is considered financially healthy by industry standards.

IPERS’ actuary, Cavanaugh Macdonald Consulting in Bellevue, NE, conducted 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’ Comprehensive Annual Financial Report will be published by December 31, 2018.

“Even after lowering the investment return assumption last year from 7.5 percent to 7.0 percent, and updating mortality tables this year, IPERS’ financial health improved,” stated IPERS’ CEO Donna M. Mueller. For fiscal year 2020 (beginning July 1, 2019), contribution rates for the regular members will remain unchanged while rates for special service members will decrease 0.5 percentage point.

IPERS’ investment portfolio returned nearly 8 percent (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.

As the largest public pension system in Iowa, IPERS has approximately 360,000 members, including 120,000 retirees. IPERS paid $2 billion in retirement benefits during the last fiscal year, with $1.8 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 23 years of service, earning an annual pension of $17,000.

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