Report: Iowa state pensions among the nation’s best-funded
A new report lists Iowa’s state government pensions as more than 80% funded. (Photo by Perry Beeman/Iowa Capital Dispatch)
Iowa’s state government pension funds are among the best-funded in the nation even as other states have improved their position, a new Pew Charitable Trusts analysis shows.
Pew found that nationally, state retirement systems are in the best shape they’ve achieved since the Great Recession of 2007-09. As a group, U.S. state retirement systems together are more than 80% funded for the first time since 2008.
The report was based on 2019 figures. Iowa’s pension funds were 85.4% funded, according to Pew. That compares with South Dakota at 110.1%; Nebraska, 93.1%; Minnesota, 82.2%; Missouri, 77.8%; Kansas, 69.9%; North Dakota, 69.8%; and Illinois, 38.9%.
Pew reports Iowa had a net asset position of $34.8 billion, with liabilities of $40.7 billion.
Funding gap narrows
Pew noted that many thought the gap between state pension obligations and cash on hand would widen. But a combination of higher contributions by employees — a 10-year trend — and most states’ whittling of benefits combined to strengthen the funds’ financial positions.
“Pew research shows that contributions have increased an average of 8% each year over the past decade, boosting assets and paying down debt,” Pew wrote. “In the four states with the most financially troubled pension systems — Illinois, Kentucky, Pennsylvania, and New Jersey — contributions increased by an average of 16% a year over the same period.”
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