DES MOINES, Iowa – There are growing worries that conservative budget-cutters at the Statehouse have their eyes on one of the biggest targets around – the giant Iowa Public Employees Retirement Fund, or IPERS.
“It’s political payback,” said Brad Hudson, an expert on the retirement Fund who works for the state’s teacher union, the Iowa State Education Association. “It strengthens their political contributors and it weakens our base. They want to give their friends a cut of the money”
The suspicion is that targeting the giant retirement fund is a way to give political contributors a chance to manage the fund, which would yield an enormous amount of income for anyone taking over the fund.
The stakes are enormous. The fund pays $1.6 billion in benefits in Iowa, and one out of every 10 Iowans is an IPERS member.
“They are teachers, social workers, public nurses, firefighters and police, snowplow drivers and many more who are dedicated to improving the lives of others,” says a description offered by managers of the fund.
An accounting last year of the fund showed it had total assets of $31,236,332,108, with total liabilities of $28,326433,656.
On the surface, it seems like there is bipartisan support for keeping the system rolling the way it is. Former Gov. Terry Branstad and then-Lt. Gov. Kim Reynolds offered a glowing assessment last year.
“We are proud of the difference IPERS makes to Iowans,” Branstad and Reynolds said. “We are proud of the public service and commitment from IPERS members. We hope you are too.”
The retirement system has been in place since 1953 and is a fixture for hundreds of thousands of people, who get an average annual benefit of $16,000.
Hudson said managers of the fund have been ferocious in keeping tabs on investments from the fund.
“We get into very competitive bids with them,” Hudson said. “If they don’t perform, we don’t pay them.”
The politics are pretty simple. One of the biggest backers of Democratic candidates is the union representing state workers, while Republicans generally benefit from big investment firms like the one that would benefit by having a crack at managing the giant investment fund.