Tag: Governor Reynolds

Privatizing IPERS: An Analysis of Senate File 45 (Updated 10/26/18)

SENATE FILE 45 was introduced by Senator Brad Zaun (R) on the first day of the 2017 legislative session.  (PDF of this document)

Senator Zaun is the Chair of the Judiciary Committee, Vice Chair of the Labor and Business Relations Committee, and a member of the State Government and Commerce Committees

The bill mandates employees newly hired on or after July 1, 2019, who would otherwise be members of the public safety peace officers’ retirement (PORS), accident/disability system, the Iowa public employees’ retirement system (IPERS), the statewide fire and police retirement system (411), or the judicial retirement system, SHALL NOT become members of their respective retirement systems.  These are all state defined benefit pension plans.

Instead, Senator Zaun’s bill directs each retirement system to develop an alternative defined contribution plan for employees newly hired on or after July 1, 2019. This would repeal the current pension systems in Iowa and replace them with a private market/401(k) type plan.

The bill directs each retirement system to submit a plan to create an alternative defined contribution plan to the public retirement systems committee by October 1, 2018.

This is a bad bill – built on a bad idea.

While Senate File 45 would get rid of all public defined benefit pensions,  this year most discussion is on the IPERS pension system.

IPERS is 82.4 percent funded, which rating agencies say is like being an “A” student.  While some public worker pension systems in other states are in bad shape, Iowa’s system was ranked as the 10th best-positioned pension system in the country.  Iowa also has the 4th lowest debt, including pension liability, in the country.

  • One in 10 Iowans is a member of IPERS.  Most of IPERS members are teachers and school staff, followed by law enforcement, social workers, prison staff, transportation workers, and other public employees.
  • The average IPERS retiree leaves public employment after 22 years of service.
  • The average IPERS retiree receives an annual benefit of $16,000. Benefits are calculated based on a formula of years of service and highest average salary, with a maximum benefit of 65 percent for 35 years or more of service.  No one makes more in IPERS retirement than they did while they were working.
  • This benefit is secure and paid for a lifetime, but does not include a cost-of-living adjustment.  Every year spent in retirement means the IPERS monthly benefit has less buying power. That’s why IPERS is only one part of retirement planning and is designed to be combined with Social Security and other personal savings and investments.

 

October 2018 Update

While SENATE FILE 45 did not advance in the 2017 – 2018 session, leading Iowa Republicans continue to back the ideas contained in the bill.

On April 24 of 2017, shortly after the 2017 session adjourned, Governor Reynolds told reporters that her priorities for the next session included “Water quality, tax reform and a study of the Iowa Public Employees’ Retirement System,” according to reports in the Cedar Rapids Gazette and the Quad City Times.

On August 28 of 2017, then Senator, now Senate President ,Charles Schneider (R) invited the Los Angeles-based Reason Foundation to give a presentation to members of the IPERS Benefits Advisory Committee.  The Reason Foundation is an advocate for private market/401(k) type retirement plans.   The IPERS response to the Reason Foundation’s presentation can be found here: https://www.ipers.org/newsroom/2017/reason-foundation-presentation-bac

On December 18 of 2017, the Legislature’s Public Retirement Systems Committee met for a contentious meeting, headlined by one newspaper as: “Iowa lawmakers grill IPERS officials about public pension funding.”  The committee adjourned without making recommendations for legislation in 2018.

On June 22 of 2018, Governor Kim Reynolds was interviewed on Iowa Press (http://www.iptv.org/iowapress/story/30878/governor-kim-reynolds).  The Governor repeatedly talked of making changes to IPERS while “maintaining the commitments that have been made.”  IPERS managers have consistently warned that changing to a 401(k) plan for new members would threaten benefits to current members.

On October 23 of 2018, individual editorials from Governor Reynolds and Iowa House Republican Speaker Linda Upmeyer appeared in major papers.  Both claimed there are no plans to change IPERS.

On October 25 of 2018, House Democratic Leader Mark Smith revealed that Speaker Upmeyer had previously voted for “a 401(k)-style plan that would divert money from IPERS.” (HSB 512, House State Government Committee Vote, March 2, 2006)

 – END –

 

 

 


Produced by the Iowa Senate Democratic Research Staff: 515-281-5804

Special Session Not Likely To Deal With State’s Money Mess

DES MOINES, Iowa  --  The state of Iowa hasn't paid its bills from last year. It didn't have the money. The issue isn't new. A plan is now coming.

Governor Kim Reynolds has faced questions for months on how she would deal with the financial problem. On Tuesday morning she announced that her administration will announce on Wednesday what it plans to do.

"Tomorrow (Wednesday) my department of management and revenue are finalizing the numbers, and they will do an update tomorrow (Wednesday) to the media and they will provide all of that information to you tomorrow," Reynolds told reporters.

Will the governor be there? "I won't be at the media update," she responded.

Department of Management Director Dave Roederer and Department of Revenue Director Courtney Kay-Decker will handle the budget briefing Wednesday at 10:30 a.m. and announce whether the governor will need to call lawmakers back into a special session to authorize borrowing tens of millions of dollars from state reserves.

Both directors track day-to-day finances of the state. Insiders tell Channel 13 it is unlikely the governor will call lawmakers back into special session. Instead, she could use her authority to transfer up to $50 million from state reserves and then use some type of accounting measures to make up for the rest of the shortfall.

The governor's public schedule shows she will be in six rural Iowa towns on Wednesday, instead of at the State Capitol for the announcement about the much-anticipated blueprint for how to handle the budget shortfall.

Wednesday, September 20, 2017

Gov. Reynolds and Lt. Gov. Gregg hold “Building a Better Iowa: Economy” event

Tour AgriVison Equipment

58668 190th St.

Pacific Junction, IA

8 a.m.

 

Gov. Reynolds and Lt. Gov. Gregg hold “Building a Better Iowa: Economy” event

Water quality best practices farm tour

4077 180th St.

Shenandoah, IA

9:30 a.m.

 

Gov. Reynolds and Lt. Gov. Gregg hold “Building a Better Iowa: Economy” event

Tour of IWCC CEAM Program, H&H Trailers & MHI

923 E Washington St.

Clarinda, IA

11:15 a.m.

 

Gov. Reynolds and Lt. Gov. Gregg hold “Building a Better Iowa: Economy” event

Tour downtown Bedford

419 Main St.

Bedford, IA

1 p.m.

 

Gov. Reynolds and Lt. Gov. Gregg hold “Building a Better Iowa: Economy” event

Tour Dragoon Trace Nature Center

2434 IA-2

Mt. Ayr, IA

2:30 p.m.

 

Gov. Reynolds and Lt. Gov. Gregg hold “Building a Better Iowa: Education” event

Visit Graceland University

1 University Pl.

Lamoni, IA

4 p.m.

The governor did not say why she couldn't hold the budget announcement on Thursday when she is scheduled to be in Des Moines during the day and could deliver the plan herself.

Governor Says Sale of Cedar Rapids Business Could Benefit Iowa

CEDAR RAPIDS, Iowa  --  Governor Reynolds says the sale of Cedar Rapids-based Rockwell Collins could benefit Iowa.

Rockwell Collins is one of Iowa's biggest employers. United Technologies, based in Connecticut, is acquiring the company for $30 billion, and it will now be called Collins Aerospace Systems.

Governor Reynolds says there is little overlap between the two companies. Rockwell Collins makes interior cabin parts and cockpit technology, while United Technologies makes engines, wheels, and propellers. The governor also says the sale could eventually lead to an expansion of business in Iowa.

The deal still has to be approved by federal regulators.

Governor Signs Ag Proclamation, Supports Equality in Military Service

IOWA  --  Governor Kim Reynolds showed appreciation for agricultural entrepreneurs on Monday morning.

She signed the Agricultural Entrepreneurship Week Proclamation, which is meant to show an appreciation for the impact agricultural entrepreneurs add to the state and Iowa's legacy in helping create world changing technologies, products, and services.

Following Monday morning's signing, reporters asked the governor about her position on President Trump's transgender military ban. Governor Reynolds said anyone willing to serve in the military deserves the nation's respect.

"So less than 1% of Americans today sign up to serve and to defend those liberties and freedoms. And I think that anybody that signs up to serve our country and defend those liberties and freedoms deserves our utmost appreciation and respect," she said.

The governor said she and Iowa Senator Joni Ernst are both in agreement on the issue.