IOWA CITY – Iowa’s public pension systems are strong and healthy, working as intended to assure retirement security to thousands of Iowans, a report from the Iowa Policy Project stated this week.
The nonpartisan Iowa Policy Project report found that Iowa’s four public pension funds have recovered from recessionary losses and are poised for future sustainability.
“Our state pension plans are sound and, after weathering a difficult period for all investors, they stand well-positioned to meet the needs of future and current retirees,” said Imran Farooqi, lead author of the report.
Iowa Policy Project’s David Osterberg and Peter Fisher, co-authors of the report, agreed.
“Iowa Lawmakers need to take a deep breath, focus on long-term strategic funding of IPERS and other plans to assure that the state maintains its responsibility as an employer,” Osterberg said. “Along with recovery from the recession-era decline in investments, past lapses in the state’s obligations to meet funding requirements are now being addressed.”
“As of the last fiscal year, the state was meeting its full obligation to IPERS, and is now on course to return to a fully-funded plan. Patience and diligence are being rewarded.”
Fisher added, “IPERS’ sound footings are demonstrated by its rebound from those down years. Now, the state is making its appropriate contributions and needs to make sure that continues. Publis emloyees are required to make all of their pension contributions in full and on time. We need public employees to make the same commitment.”
The report recommends:
• Iowa, with one of the lowest percentages of state expenditures devoted to pension plans, can increase its overall expenditures devoted to these pension plans.
• The state should make every effort to meet its actuarially recommended contribution (ARC).
• The present value of pension liabilities should continue to be calculated at the actuarially determined discount rates based on experienced long-term returns in the investment portfolio.
• The state should renew its commitment to the MFPRSI fund by re-starting its contributions at the 3.79 percent level.
• Future increases in contributions should be shared on a 40 percent to 60 percent basis between employees and employers.
• When changes are made, plans should ease members through the process with effective and timely communication.
• Incremental steps to “course-correct” are more effective than quick fixes because of the long-term nature of a pension system.
