Want efficiency and a good return on investment? Stick with IPERS

How odd that a task force charged with promoting government efficiency would undermine the most efficient way to provide a secure retirement for public employees.

While already discredited by Republican legislators,[1] the Iowa DOGE task force idea to replace Iowa’s public pension systems with 401(k)-style retirement contributions remains a threat to those systems. A partisan task force whose elected leaders hold trifecta power in state government is not to be ignored.

To recap, Governor Kim Reynolds’ Iowa DOGE panel (a nod to the Trump administration’s Department of Government Efficiency) came up with several preliminary ideas, including reviving an idea legislators have resisted: changing the Iowa Public Employees Retirement System, or IPERS, to a cheaper program that prioritizes the needs of the employer over the needs of the employee. Such a move would defy the stated purpose of IPERS:

IPERS is what is known as a “defined benefit” retirement plan. It is designed to assure a guaranteed return in retirement by professionally managing pooled contributions from both the employer and employee. In contrast, “defined contribution” plans like 401(k)s focus the employer’s responsibility on a contribution that suits the employer, and gives the employee individualized investment options that may or may not provide well in retirement. A defined benefit plan is more stable and more efficient, which makes it a better deal for both the employee and employer, contributing to strong public services and the economy in general.[2]

When you have something that works — like IPERS — you keep it and you don’t undermine it with political rhetoric.

In fact, bold state lawmakers would put political capital behind their stated support for IPERS and actively promote its example across the economy. Nationally, only 15% of private-industry workers had access to a defined benefit plan in 2023.[3] Iowa could set a good example for other states by making tax credits or other subsidies only to businesses that offer such benefits, in stark contrast to the drag-us-down DOGE mindset of flipping more retirement risk onto the backs of retirees.[4]

Iowans should be proud of our commitment in state law to IPERS. Now is the time to reassure current employees and retirees that IPERS is secure, and to recommit to future employees that they are valued and that a secure retirement is assured to them as well.

For more on this issue, see our two-pager here. Contact: Mike Owen, Deputy Director, mowen@commongoodiowa.org.