BY CHUCK VANDENBERG
FORT MADISON – With the GOP-led Chapter 20 restructure being signed into law, many Democrats in the Iowa legislature are worried now about possible changes to state employees’ retirement system.
Democrats including State Rep. Jerry Kearns (D-Keokuk) and State Sen. Joe Bolkcom (D-Iowa City) have a lingering fear that, considering the swiftness of the collective bargaining changes being signed into law, changes to the Iowa Public Employees Retirement System (IPERS) may be closer than some anticipated.
“The collective bargaining bill came down 10 days from the time we saw it until it was signed into law,” Bolkcom said Wednesday. “It changed more than 40 years of practices without much deliberation at all. That was a greased product and that was step 1, ” he said.
Bolkcom said step 2 is taking a look at retirement benefits. He said Governor Terry Branstad has appointed business leaders to make recommendations for changes to IPERS.
“The question then becomes what are the recommendations? What kind of input will current beneficiaries and those currently paying in have?” Bolkcom said. “Given the way the collective bargaining bill went through with little to no public input, people should be very concerned about any changes to this system. It could be very detrimental.”
He claimed the collective bargaining issue was brought to the table by billionaire interests.
“Their agenda doesn’t like public unions and they don’t like public retirement systems. I don’t put it past these guys to come in here and drastically change this system for our state’s employees.”
Danny Homan, President of AFSCME Council 61, who filed suit on Monday, on behalf of the union and its membership, for injunctive relief of the new collective bargaining law agreed with Bolkcom.
“We agree with Senator Bolkcom’s warning cries that IPERS-covered employees or retirees should watch their back. The overreaching, power-hungry attacks of the new GOP trifecta, so far, has showed no bounds. While we have yet to see IPERS-gutting legislation, the newly-formed study group suggests changes may be coming. Take a lesson from the collective bargaining fight: “tweaks” are seldom just that,” Homan said.
But State Rep. Dave Heaton (R-Mount Pleasant) said there could be merits to looking at a defined contribution system rather than a defined benefit system.
Currently the IPERS system collects a percentage of Iowa’s public employees’ salary coupled with a percentage from the employer to fund the system, then guarantees a benefit upon retirement. Employees can choose several options at retirement including a lump sum payment, monthly payments or to hold money for dependents. Conservative groups are suggesting replacing it with a defined contribution program, similar to a 401(k) plan, which is less risky for the employer because it does not promise a specific benefit when a worker retires, which conversely would add risk to the employees’ retirement plan.
“You know there is always that defined-contribution against defined-benefit argument,” Heaton said. “You always have the uncertainty that concerns a lot of people. With a defined benefit plan they know what they’re gonna get based on contributions. I think my state workers are concerned about the security of their pension and they don’t want to take a chance.
“That’s the issue. As the governor said recently, changing our pension plan is not a quick decision to make. It’ll take a lot of thought….But sooner or later we’re gonna have to contribute more to the fund.”
Heaton, who was one of six Republicans to vote against the collective bargaining bill citing it was too much in favor of management, said he wouldn’t support any bill to change IPERS that wasn’t fully vetted.
“There’s not going to be any bill any time soon that will say were going to defined contributions, I don’t think. I won’t support it. Not on something that hasn’t been given great thought and is actuarily sound. It has to be a good plan that is adequately funded. This is a big deal…a multi-billion dollar discussion and whether or not there will be a choice. But when you provide employees a choice, all the statistics that prove your fund is solvent are at risk if you don’t know who’s contributing and how much.”
Kearns said people need to be on the lookout as the GOP-led legislature is moving very quickly with their agenda.
“I would just tell people the same thing that AFSCME is. Keep an eye on what is going on, whether you’re contributing now or taking benefits…everyone needs to be watching.”
Bolkcom said public employees only need to look back at how the collective bargaining bill was swept through.
“No one campaigned in the last elections on drastically changing 180,000 public employees’ health care and working conditions, and then come in and turned it on its head. They came in and took only 10 days to do it,” Bolkcom said.
“People need to be alert. This is on the agenda and it’s just a matter of time before a proposal comes up. If they do it like they did that, there will be very little opportunity for input or to stop it. Current beneficiaries and those putting into the system should be definitely concerned.”