On Tuesday, Jan. 22, Donna Mueller (CEO of IPERS) and Karl Koch (CIO of IPERS) presented to the House State Government Committee on the current state of the Iowa Public Employee Retirement System. The State Government Committee has legislative authority over the state pensions. IPERS currently has over 360,000 active members. Approximately 110,000 (31%) of these members are currently retired. Another 170,000 (47%) are currently employed within the system. The remaining 90,000 (22%) are inactive non-vested (12%), inactive vested (7%) or retired reemployed (3%).
There is currently $2.1 billion being paid in benefits. Of this $2.1 billion, $1.8 billion is being paid within Iowa. The ratio of actuarial assets to actuarial liabilities rose from 81.4% in FY 18 to 82.4% in FY 19. The unfunded actuarial liability decreased by $153 million and the deferred investment gained $487 million.
IPERS total pension administration cost is $55 per active member, while the average peer group cost is $101. As of June 30, 2018 IPERS had a value of $32.3 billion. The FY 2018 return ranks in the 71st percentile versus peers. However, the 10 – year return ranked in just the 48th percentile.
Representative Kaufmann, Chairman of the House State Government Committee, made a public announcement on Tuesday that House Republicans have no interest in changing IPERS. “There’s not going to be any changes to IPERS this year or next year. That includes amendments, that includes budgets, that includes standings. Very simply and unequivocally, there’s not going to be changes.”
He continued by stating, “The scare tactics that have been used — I promised my comms director I wouldn’t curse, so I’ll abbreviate and say it’s BS,” he said. “Scare for political gain stops today. Going forward, any of these groups — AFSCME, AFL-CIO, ISEA, Progress Iowa, all these groups that are pushing out this crap — after today, what you are doing will be completely deceitful. … I’m going to publicly call you a liar.”
Mary Mascher (D-Johnson) stated,“I appreciate the fact that you are adamant about making no changes, Democrats and IPERS members aren’t sure they can trust Republicans after seeing what happened when the majority party said they planned only to “tweak” Chapter 20, the state public employee collective bargaining law. As a result of that and it being gutted, I think there were many members who were extremely concerned whether they could trust the word of people who tell them there are going to be no changes.”
Charlie Wishman of the Iowa Federation of Labor, AFL-CIO stated, “It was a really great message to hear from Iowa House Republicans that they are not interested in making any changes in IPERS,” he said. “Quite frankly, after the last two years, a lot of public employees and union members have grown to be distrustful of the current majority. We will be vigilant.”
Progress Iowa’s Executive Director Matt Sinovic stated, “We won’t be bullied by Bobby Kaufmann. Retirement security is too important for us to stay silent, and we will keep encouraging Iowans to stay informed and speak out. Iowans deserve the truth, and we won’t remain silent while Bobby Kaufmann tries to grandstand and deceive.”
Last October Speaker Upmeyer stated, “IPERS members have dedicated years of their life to public service and paid into the system. These are our friends, family, and neighbors. We value the service and the decades of work they put into our communities. We will continue to keep our promise to them.
Following a firm public commitment to protect IPERS from the House State Government Committee and from key Republicans, it appears that fringe progressive organizations aligned with Iowa Democrats will continue to provide misinformation and make false claims to their members and supporters regarding House Republican’s continued commitment to protecting hard-working Iowan’s IPERS benefits.