City, county and state workers under attack – again!

Governor Reynolds has recently backed an IPERS study by Republican Senator Charles Schneider of West Des Moines in cooperation with the Reason Foundation, a Los Angeles based libertarian think tank, funded by the Koch Brothers! The Reason Foundation has published a pension reform handbook establishing a 401K type retirement plan (defined contribution) as well as a hybrid plan. According to Iowa State Treasurer Michael Fitzgerald, hybrid plans do not work for the employees and are not good plus you can outlive a 401k but not a pension (defined benefit plan). Neither of these are anywhere close to being as good as the present Iowa Public Employee Retirement System.  The Koch Brothers have a history of attacking public pension systems! IPERS, a defined benefit (pension)  retirement program, has 350,000 contributing members, which including families and spouses affects approximately one million Iowans. The Reason Foundation has also received over $3.5 million from John Arnold, a critic of public pensions, so how will this be a fair and equitable study? Governor Reynolds, in dropping the Task Force but allowing the study, said she is “focused on other priorities.” I would think a retirement system that affects 350,000 Iowans directly and a million Iowans directly or indirectly would be a priority. The priority would have been to leave it alone as it is working and has worked for 64 years but to turn it over to a Republican senator and a Koch Brothers-funded foundation is not a good sign. Matt Sinovic, Executive Director of Progress Iowa, and State Treasurer Michael Fitzgerald have both sounded the warnings for all city, county and state employees that your retirement is in jeopardy. 

This is just one of many unwarranted and non-campaigned attacks against Iowa families by Iowa Republicans.  I did not hear or read in 2016 in any campaign across Iowa that Republicans wanted to decimate collective bargaining and the IPERS retirement system for public employees.  Yet, when they took office, that is what we are getting.  We saw it with collective bargaining where we were told the 43-year-old law needed updating.  In two weeks it was decimated, not updated. We went back to basically what it was 43 years ago; workers have little or no say. Collective bargaining and unions were destroyed, just as it was in 2011 in Wisconsin when the Koch Brothers and Governor Scott Walker got together. Drew Klein, an illegal lobbyist (he never registered until after the legislative session) for the Koch Brothers, and their Americans for Prosperity were at Governor Branstad’s side when he signed the law destroying collective bargaining.  We were told there would be amendments to make things fair.  That did not happen. We saw families attacked again with the worker’s compensation bill and the privatizing of Medicaid. Everyone, including other states that had done it, told us not to, but we did not listen and look at the mess and expense that privatizing Medicaid has caused.  A northwest Iowa Republican sheriff pleaded that collective bargaining worked and he had been on both sides and it worked, but his plea fell on deaf ears. The Iowa Legislature underfunds education again and again so what happens?  All our taxes go up, as schools then have no choice but to increase their tax asking, so we have seen a steady climb of property tax increases under this administration. 

I have emailed Governor Reynolds three times asking some of the following questions (I have received no responses and no form letters)  plus I will also share her past positive comments regarding IPERS.  Here are my questions: 

Why are you trying to change IPERS, which has worked well since 1953 and adds $1.63 billion to Iowa’s economy?  If you are not trying to change it, then why allow a study group with only Republicans and a Koch Brothers-funded foundation?

IPERS is ranked as one of the top 10 pension systems in the country, so if it “ain’t” broke, why are we trying to fix it?

All research shows that any pension fund that is 80% or more funded is in great shape.  IPERS is 80% funded and has superb actuarial supervision and quality administration and is on track to be 100% funded. IPERS has averaged 8.83% return over the past 30 years. Why would we change from this?

If there has to be a study group then why isn’t it bipartisan?  Why are there no actuaries from IPERS?  Why isn’t the State Treasurer, Michael Fitzgerald, on the committee?  Why isn’t the IPERS administrator, Donna Mueller, on the committee? Why is a Koch Brothers group studying IPERS?

Why not look at tweaks to make IPERS #1 in the country, which would have people flocking to Iowa for jobs? Presently, employers contribute 60% and employees 40%. Every IPERS member I talked with had no problem going to 50-50 or 60 employee-40 employer to keep the defined benefit system. Maybe you reduce the maximum wages covered under IPERS.  There are numerous ways to make it better without changing a great system.

You were on the IPERS board for six years.  You were a vocal supporter of IPERS.  What changed when you became governor?

Past quotes by then Lt. Governor Reynolds and Governor Branstad:

“As a defined benefit plan, IPERS is secure, strong and sustainable. Simply put, it’s good for Iowa.”

“There is no better run public pension system in the state, than IPERS. IPERS has been a solid public pension system that is efficiently managed, and serves as a model for other states.”

“Since 1953, IPERS has helped Iowa’s public employers attract and retain a quality workforce while IPERS benefit payments help Iowans and their communities.”

“IPERS is a powerful economic engine that helps create jobs, keeps retirees off public assistance, and provides security for all members.”

“One in 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”.

“We are proud of the difference IPERS makes to Iowans. We are proud of the public service and commitment from IPERS members.”

Now, that sounds like a pretty great system that has benefits for all Iowans, so why are we letting out-of-state people try to change it and why are you allowing it?

I recently visited with people from Minnesota and they are loving it as due to the turmoil with collective bargaining and pensions in Iowa and Wisconsin, Wisconsin and Iowa teachers are flocking to Minnesota. That is not good for Iowa. 

We have given hundreds of millions for corporate welfare.  Orascom, a foreign fertilizer company, was given over $230 million in county and state funds. The next thing is they pollute the Mississippi River and are fined over $80,000. Kum and Go gets over $9 million to move from West Des Moines to Des Moines! Hundreds of millions of dollars have gone for corporate tax breaks and much of it to out of state corporations that pay no tax.  We have had to cut public safety, courts, education, closed state parks, cut the DNR, etc.  Now we are $100 million or more in debt and we want to cut and change  people’s secure retirement? 

No legislator campaigned on attacking families and public employees, so why is this happening?

IPERS has worked for 64 years. Let Iowa actuaries, the Iowa Treasurer and the IPERS administrator manage it and tweak it, not politicians, not out-of-state foundations, and certainly not the Koch Brothers!

JOHN BROSTAD

Storm Lake