Iowa State Pensions
Two primary state-funded programs exist in the state of state of Iowa granting retirement benefits to its covered employees. The two main types include:
Iowa Public Employee Retirement System (IPERS) – The pension covers qualified permanent state employees and teachers both full and part time. A temporary-employee benefit program is in place under IPERS that may cover qualified temporary employees such as volunteer firefighters, substitute teachers and on-call employees. Teachers of public schools, universities and community colleges are also covered under this program.
Municipal Fire & Police Retirement System of Iowa (MFPRSI) – This pension is reserved for full-time members of police and firefighters.
Benefit Description for Covered IPERS Employees
The IPERS pension is mandatory for all permanent employees both full and part time regardless of position or salary unless the employee is exempt by law or the employer has a program in place that allows the employee to opt out of coverage. Optional programs allowing certain employees to opt out of coverage if they can provide an alternative retirement plan are available. In some cases, temporary employees may be covered under IPERS.
A temporary employee is an individual hired for employment that is less than 6 months per year or is on an on-call basis with the company. This definition includes voluntary firefighters. An employee may be eligible for coverage once they have met qualifications that can include either wages equaling $1,000 or more two fiscal quarters in a row or when the employee reaches a total of more than 1,040 hours worked in one year. Temporary employees include volunteer firefighters, substitute teachers and on-call state employees.
- Those qualifying for optional IPERS coverage have been hired after January 1, 1999 and must opt out within 60 days of employment. Those opting out of coverage will not accumulate service credit hours if they should chose to elect coverage at a later date.
- Only employees of community colleges, state board of regents and water utilities may elect the alternative opt out program which allows the employee to opt out of IPERS only if they have selected an alternative retirement program.
- IPERS employees that have retired may return to work while still receiving coverage if under age 65 but have an earnings limit of $30,000 per without affect. Anything about will reduce or remove benefits from IPERS.
Employee contributions are calculated based on the position held with the state including:
- Sheriff and deputies- 9.88% employee/9.88% employer
- Protection occupations-6.76$ employee/10.14% employer
- All other regular employees-5.95% employee/8.93% employer
Retirement benefits for all plans are based on a defined benefit program. The amount received monthly is calculated using a state formula that include the employees years of credited service and vesting period and highest yearly salary over five years and using a state defined multiplier for the final benefit amount.
- Full benefit retirement age for regular employees is age 65, age 62 with more than 20 years of service or when service years added to age equals age 88. Reduced retirement benefits for those retiring under the qualifications for full benefits find their benefits are reduced by .5% for every 6 months under the full benefits age. Beginning at the vesting period of 7 years credited service; the employee will receive a percent increase in benefits up to 35 years of service.
- Survivor benefits are aviable for both vested and non-vested members. Those members who have reached the vesting qualification of 7 years however, survivors are eligible for additional death benefits. Disability is available for vested members.
- Those working in corrections, law enforcement and firefighting positions are eligible for retirement at an earlier age due to the nature of their work. Reduced benefits are aviable at age 50 if 22 years of service as a sheriff or deputy position has been reached. Otherwise benefits can begin at age 55. A hybrid formula is used to calculate benefits if the employee is enrolled in both the regular IPERS and special services IPERS programs.
Those members of the IPERS pension employed in police, fire or corrections are eligible for death benefits before reaching the vesting year’s period of 7 years. Retirement benefits are calculated based on the highest 3 year average salary wages plus a state regulated multiplier for every year over vested years.
A hybrid formula is used for members that are enrolled in both the regular IPERS and police & corrections IPERS services up to 30 years of credited service. Maximum benefit percentage is a maximum of 65% for the hybrid programs.
Retirement age is 65 years old, age 62 with 20 years of service or if years of service combined with age equals 88. However special disability is available to those in the police and corrections fields for vested members if injured during both occupation and non-occupational hazards.
Benefits for Members of the MFPRSI Pension Programs
For employees working in the fields of firefighter or police officer, MFPRSI pensions may be available. The benefits at retirement will be equal to 66% of the employees’ average final wages. Service over the 22 years of service credit receives an additional, 2% increase yearly for each year over minimum. Employees are eligible for retirement beginning at age 55 with 22 years of service credits.
- Employee contributions are set at 9.40% of wages while employers are required to contribute 30.12% to the benefits fund.
- Disability benefits and survivor benefits are available for normal accidents, occupational accidents or death.