IPERS-covered employees and employers contribute money to IPERS to fund retirement benefits. IPERS invests the contributions and holds the investment income in a trust fund for the exclusive purpose of paying benefits to IPERS members and their beneficiaries. Investment income represents approximately 70% of the funds that pay retirement benefits.
Investment returns play an important role in the funded status of the IPERS Trust Fund because they provide most of the money needed to pay future benefits. The Investment Board’s asset allocation plan articulates the desired mix of investment assets and the amount of risk IPERS will take in pursuit of investment returns.
Asset allocation is a process of investing across many different asset classes with the purpose of diffusing the overall volatility of IPERS' investment returns.
The Investment Board establishes a policy benchmark that is a strategic set of target allocations for each asset class. IPERS’ investment staff strives to meet or beat the return on the policy benchmark by conserving investment management costs and prudently deploying investment risk across asset classes and strategies.