IPERS cuts key target; unfunded pension liabilities up $1.3 billion
Iowa's largest public employees' pension fund decided Friday to lower a key investment target, which will increase unfunded liabilities by about $1.3 billion and could require larger contributions by state and local governments and workers.
The Iowa Public Employees' Retirement System, which has more than 350,000 members, cut its assumed annual rate of return on investments from 7.5 percent to 7 percent. The changes were made in response to concerns that returns will cover less of the cost of retirees' pensions than in the past.
A similar change was approved in December by the California Public Employees' Retirement System, the nation's largest, which is considered a bellwether for public pension funds.
IPERS' Chief Executive Officer Donna Mueller said in a statement that the IPERS' Investment Board approved a set of changes after receiving an economic assumption study from Cavanaugh Macdonald, an actuarial consultant from Bellevue, Neb. Other new assumptions anticipate that inflation will be reduced, interest on members' accounts will decline, and wage growth and payroll growth will decrease
Read more: http://www.desmoinesregister.com/story/news/politics/2017/03/24/ipers-cuts-key-target-unfunded-pension-liabilities-up-13-billion/99600866/
