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Favorable Experience Dividend FAQ

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A. FED stands for Favorable Experience Dividend. The final FED payments were made in January 2014. Its purpose was to help offset the effects of inflation and it was paid from the FED Reserve Account.

A. No, IPERS does not expect to make any additional FED payments in the foreseeable future. The funds for the FED payments were depleted with the January 2014 payment.

A. The Legislature swept investment earnings off the IPERS Trust Fund to establish the FED Reserve Account in the late '90s during a time when IPERS was over 90 percent funded.

A. No, by law IPERS cannot transfer additional funds until the Trust Fund is 100 percent funded. IPERS is on track to be 100 percent funded within 30 years. Transferring more money now from the Trust Fund will negatively affect the funding status and could put the basic benefit at risk in the future.

A. Yes, IPERS’ core benefit is guaranteed for life. However, FED payments are not guaranteed. The FED payments were not prefunded, unlike the basic benefits.

A. IPERS’ Benefits Advisory Committee continues to examine the options, but so far no affordable and fair solution has been found.

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