The Iowa Legislature and the Governor are the plan sponsors and IPERS is the plan administrator. Rules and regulations for administering pensions for public employees are governed by federal laws enacted by Congress and state laws (Iowa Code) passed by the Iowa Legislature.
Chapter 97B contains current Iowa law governing IPERS. The law defines who participates in IPERS, what benefits are provided and contributions paid by employees and employers.
Administrative rules provide more detail about how federal and state laws governing IPERS are implemented.
Pension reform was enacted in 2012 to address an unbalanced funding ratio. The pension reform implemented in 2012 resulted in an immediate savings of $674 million, and IPERS continues to administer the system to exceed important benchmarks of fiscal soundness. For example, a funded ratio of 80% indicates a strong and secure pension plan. In FY2020, IPERS funded ratio was 83.96%.
Key details of the pension reform bill include:
- Lengthened vesting period for regular members.
- Reduced future benefit accruals for Regular members by replacing the highest three-year average salary with the highest five-year average salary.
- Increased the early-retirement penalty for Regular members.
- Allowed IPERS flexibility in setting contribution rates for Regular members.
In the years since the passage of the pension reform bill, contribution rates have remained stable and IPERS’ funding ratio is more closely in balance. IPERS’ goal is to become 100% funded.