Group Sounds Warning About Iowa’s Underfunded Retirement System

Politics
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DES MOINES, Iowa  —  It’s hardly the Titanic, but the CEO of IPERS did acknowledge Tuesday that state lawmakers may need to make changes to fully fund the system.

Donna Mueller said the system is about 80 percent funded to meet the needs of future retirees. She compared IPERS to an ocean liner. “You don’t just move it fast on a dime,” Mueller said, “Any reforms really need time to take effect. But it also takes captains at the head of the ship to really monitor.”

The Libertarian-leaning group, The Reason Foundation, briefed several lawmakers on pension systems. “This isn’t about the future of America, having a pessimistic outlook,” the foundation’s economic Anthony Randazzo told lawmakers. “It’s saying simple the situation of markets are different.”

Randazzo and another member cautioned that pension systems shouldn’t expect the returns they have in the past and said smaller returns could be the norm in the near future.

Some union supporters are skeptical of the group and think this could be ammunition to require more from state workers, who have already had to increase their retirement contributions and wait longer to become vested for full benefits.

Matt Sinovic, the executive director of Progress Iowa said in a statement:

“The Reason Foundation has a history of recommending a shift toward 401k style plans, which threatens to break the promise of retirement security that our state has made to Iowa workers. This is the latest in a series of attacks on the middle class by Iowa Republicans, and it’s unclear whether our economy or our state’s working families can withstand another all-out assault.”

State Senator Charles Schneider, the West Des Moines Republican who organized Tuesday’s informal briefing, said no decisions have been made to ask for IPERS changes. “All of us have an interest in making sure that we have a pension plan and a retirement plan for all of our hard working public employees,” Schneider said.

 

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