Iowa Public Employees’ Retirement System 2001-2005 Experience Study, June 2006

(2006) Iowa Public Employees’ Retirement System 2001-2005 Experience Study, June 2006. Iowa Public Employee Retirement System

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Abstract

The purpose of an actuarial valuation is to provide a timely best estimate of the ultimate costs of a retirement system. Actuarial valuations of IPERS are prepared annually to determine whether the statutory contribution rate will be sufficient to fund the System on an actuarial basis, i.e. the current assets plus future contributions, along with investment earnings will be sufficient to provide the benefits promised by the System to current members. The valuation requires the use of certain assumptions with respect to the occurrence of future events, such as rates of death, termination of employment, retirement age and salary changes to estimate the obligations of the System. The basic purpose of an experience study is to determine whether the actuarial assumptions currently in use are accurately predicting actual emerging experience. This information, along with the professional judgment of System personnel and advisors, is used to evaluate the appropriateness of continued use of the current actuarial assumptions. When analyzing experience and assumptions, it is important to realize that actual experience is reported short term while assumptions are intended to be long term estimates of experience.