Administration April 21, 2008

Iowa Measure Calls for Contribution Hikes to Address Pension Shortfalls

April 21, 2008 (PLANSPONSOR.com) - State of Iowa officials would pour $4.5 million extra annually into three of Iowa's public pension programs if a bill in the state legislature is passed.
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A Des Moines Register news report saidunder Senate File 2424, city and county governments would contribute about $3 million extra while employees collectively would kick in $3.7 million annually above current rates.The measure concerns the pension system for peace officers, the Iowa Public Employees’ Retirement System, and the judicial retirement system.

According to the news report, judges will see the biggest difference in personal contributions. The rate will ramp up from 6% to about 9%. Over the next three years the state’s contribution will go up from about 24% of the judges’ salaries to about 30%.

The Register story said the judges’ pension system has a $42 million unfunded liability, while the troopers’ system has a $97 million shortfall. The Iowa Public Employees’ Retirement System shortage is $2.3 billion.

The Iowa Senate approved the measure 39-7 last week. The bill still needs House approval.

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