F Y2019 Budg e t Re q ue st Pre se nte d to Governor Kim Reynolds - - PowerPoint PPT Presentation

F Y2019

Budg e t Re q ue st

Pre se nte d to

Governor Kim Reynolds

&

• Lt. Governor Adam Gregg

Donna M. Mue lle r, CE O

I OWA PUBL I C E MPL OYE E S’ RE T I RE ME NT SYST E M

No ve mb e r 22, 2017

Our Missio n

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Administer a cost-efficient retirement plan that provides lifetime pension payments to public employees and serves to attract and retain a quality workforce.

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T a b le o f Org a niza tio n

355,000 Me mb e rs

As o f 6/ 30/ 2017

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Re g ula r

me mb e rs ma ke up

95% Spe c ia l Se rvic e

me mb e rs ma ke up

5%

Be ne fit Pa yme nts b y Co unty

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As o f 6/ 30/ 2017

• Ove r

117,000 r e tir e e s

• $2 billion

paid in be ne fits

• $1.7 billion

paid to Iowans

Pre fund – No t Pa y-a s-Yo u-Go

Contributions + Inve stme nts = Be ne fits + E xpe nse s

Inve stme nt e ar nings c o ntr ibute 70% o f IPE RS be ne fits paid.

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I nve stme nt Pe rfo rma nc e

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Return on market value of assets of 11.7%

• Eliminated the unrecognized investment

loss of $707 million in last year’s valuation (actuarial value exceeded market value)

• Resulted in a $307 million unrecognized

investment gain this year, i.e., market value exceeds actuarial value

*Ac tua r ia l Assume d Inve stme nt R e tur n

1953–1993 6.50% 1994–1995 6.75% 1996–2016 7.50% 2017–present 7.0%

I nve stme nt Pe rfo rma nc e Histo ry

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Annua lize d R e tur ns

1-Year 11.7% 10-Year 5.89% 20-Year 7.45% 30-Year 8.65% For periods ending June 30

Cha ng e s to E c o no mic Assumptio ns

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IPERS’ Investment Board adopted new economic assumptions, following an experience study conducted earlier this year.

• Inflation lowered from 3.0% to 2.6%
• Investment return lowered from 7.5% to 7.0%
• Interest on member accounts decreased from

3.75% to 3.50%

• General wage growth assumption decreased

from 4.00% to 3.25%

• Payroll growth assumption was lowered from

4.00% to 3.25% Demographic assumptions will be reviewed in FY2018.

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K e y F unding Me a sure me nts

F Y2017

• Ratio of actuarial assets to actuarial liabilities

81.4% (down from 83.9%)

• Unfunded actuarial liability (UAL) increased by

$1.4 billion, largely because of the change in

investment return rate

• Deferred investment gain of $307 million

Co ntrib utio n Ra te s vs. Re q uire d

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Ca se Study Within I PE RS

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Historical Funded Ratios By Membership Class

Membership Class Member Employer Total Regular

7/1/13–6/30/18 7/1/18 – 6/30/19 5.95% 6.29% 8.93% 9.44% 14.88% 15.73%

Sheriffs and Deputies

7/1/17–6/30/18 7/1/18 – 6/30/19 9.38% 9.76% 9.38% 9.76% 18.76% 19.52%

Protection Occupations

7/1/16–6/30/18 7/1/18 – 6/30/19 6.56% 6.81% 9.84% 10.21% 16.40% 17.02%

Co ntrib utio n Ra te s

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T he I PE RS T rust F und

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In FY2017, the Trust Fund increased to

$31 billion

after paying $2 billion in benefits.

K e y GASB Me a sure me nts

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Total Pension Liability $37.44 billion Fiduciary Net Position $31.78 billion Net Pension Liability $ 6.66 billion Ratio of Fiduciary Net Position to Total Pension Liability

82.2%

Co nsiste nt L

• w Co st

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Sourc e : CE

M Be nc hma rking I nc .

IPERS’ total pension administration cost of $53 per active member and annuitant has remained significantly below its peer group cost of

$103.

Budg e t Appro pria tio n Re q ue st Summa ry

• No General Funds requested.
• IPERS administrative expenses are paid by the IPERS Trust

Fund.

• Pension administration system upgrade is underway.
• FY2019 request:

$17,988,567 and 88.13 FTE NO increase from FY2018

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F Y2019 Budg e t Appro pria tio n Re q ue st

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Service Category FTEs FY2019 Investment Management (Oversee investments and investment policy) 10.06 $1,698,891 Retirement Services (Paying benefits; service purchases; disability services) 25.27 $4,052,147 Member Services (Benefit education and estimates; retirement counseling) 20.68 $3,353,501 Employer Relations & Data Management (Employer training; compliance reviews; employer reporting) 13.00 $2,095,938 Governance, Plan Design, and Financial Control (Legal compliance; administrative rules; internal auditing; actuarial services) 18.07 $3,074,044 Facility Maintenance 1.05 $1,020,000 Pension Administration Software System 0.00 $2,694,046 FY2019 appropriation 88.13 $17,988,567 FY2018 appropriation 88.13 $17,988,567 Increase/(Decrease) from FY2018 appropriation 0.00 $0.00

I PE RS F un F a c ts

• 126 me mbe rs ove r the a g e of 100
• Provide d ove r 11,322 pre re tire me nt

c ounse ling se ssions in F Y2017

• Re c e ive d ove r 84,380 phone c a lls
• Pre pa re d more tha n 34,115 e stima te s
• We lc ome d 6,360 re tire e s

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For additional information, visit our website at www.ipers.org E-mail: ceo@ipers.org Phone: 515-281-0070 Toll-free: 1-800-622-3849

Co nta c t Us

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