Statement from State Treasurer Michael Fitzgerald regarding SF 634

DES MOINES, IA (04/26/2019) (readMedia)-- As state treasurer, I have been a vocal advocate for the hardworking Iowans, their families, and their communities, who depend on IPERS in retirement. As chair of the IPERS Investment Board, I have worked to ensure we build upon IPERS' strong, secure, and sustainable position. IPERS was created in 1953 with the primary purpose of providing a secure core retirement benefit to Iowa's public employees as well as attract and retain a quality workforce.

In the early hours of Thursday morning (April 25), the legislature passed SF 634. This bill was a local government budget bill, not a pension bill. This is a complex bill, but in short one thing it does is change the way pension obligations are considered when calculating property tax increases. Iowans have been voicing their concerns across the state that this bill will have a negative impact on IPERS and 411 pension programs. In response, IPERS Administration issued a statement on Facebook and Twitter on April 25.

I want to make it clear that the IPERS statement was issued by IPERS Administration, not by the IPERS Investment Board, or by me in my capacity as chair of the IPERS Investment Board or State Treasurer. Following is my statement.

First, I think this is a bad bill. I believe in letting local governments control their budgets. Local government officials know what they need to best serve their communities. One potential outcome of this bill could be to put pension funds in competition with other budget priorities. For example, funds used to pay employee pension benefits for firefighters, police and other valuable public servants should not be pitted against funds to repair roads.

Second, in my capacity as state treasurer and chair of the IPERS Investment Board, I am concerned about the long term impact of this legislation. IPERS is strong, secure and sustainable today. But the changes made in SF 634 threaten how people view public pension plans. When talking to Iowans in the past, I stated that IPERS participants and retirees should stay vigilant. There are organizations and politicians that want to undermine the system in an effort to make significant changes in the future. While this bill does not specifically change IPERS today, it potentially puts public pension funds, like IPERS, in a negative light.

This is not how we keep pension systems - which were designed to recruit the best and the brightest to serve Iowans - in a strong, secure, and sustainable position. I do not think this is good for Iowa and I encourage Governor Reynolds to veto SF 634.

Written by State Treasurer Michael L. Fitzgerald

Chair, IPERS Investment Board