The $250 million Des Moines Teachers Retirement System can propose merging into the $28.5 billion Iowa Public Employees' Retirement System, Des Moines, under a bill passed by the Iowa Legislature.
The bill passed the Senate by a 49-0 vote on Thursday, approximately three weeks after it passed the House. It is expected to be signed by Iowa Gov. Terry Branstad.
The bill allows the Des Moines pension fund to propose the merger. IPERS is not required to accept the proposal, but has indicated that it would, provided there is no cost to IPERS. Employees' accounts must be 100% funded in the transfer, said an IPERS spokeswoman in an email.
Catherine McKay, director benefits/risk management for Des Moines Public Schools, said the majority of Des Moines school district staff already participates in IPERS and the district is looking to transfer active members of the teachers' pension fund to IPERS. These employees represent fewer than 10% of the school district's current faculty and staff. Retired members of the teachers' pension fund would not be transferred.
“As a major employer, the portability of a pension plan is important. Des Moines Public Schools hires employees from other school districts who are already enrolled in IPERS, as well as have employees who leave DMPS to work at other districts. It is a benefit for teachers and other staff members to have a pension plan that can follow them to a qualified employer,” Ms. McKay wrote in an email.
The cost of the transfer for the Des Moines Public Schools is expected to be roughly $66.7 million. The teachers' pension fund is fully funded, Ms. McKay said.