Iowa Gov. Branstad urges action on pensions

DES MOINES – Gov. Terry Branstad indicated pension reform would be a priority for him in the 2014 legislative session, saying he wanted to see “significant reforms” to the public pension system.

“I believe that just throwing $109 million into the pension system without significant reforms, that would not be a good use of taxpayer money,” Branstad said during a news conference at the Iowa Statehouse Monday.

His statement came in response to a question about his line-item veto of an appropriation the General Assembly passed to shore up the Judicial Retirement Fund and the Peace Officers' Retirement System.

More than $90 million of that would have gone to the Peace Officers' Retirement System, the primary pension for state troopers, which is funded at only 61 percent.

“We need to take a thoughtful, long-term approach, a balanced approach that not only involves the taxpayers but also the people that benefit from these lucrative pension systems and resolve them,” he said.

Branstad quickly added he thinks Iowa's pension issues aren't nearly as severe as they are in other states, such as Illinois, where lawmakers are wrestling with a $97 billion pension shortfall. The state's five systems have about 43 percent of what's necessary to cover their obligations.

But Branstad wouldn't specifically say what he thinks needs to be done in Iowa.

“I'm not at this point making suggestions for specific changes, but I do recognize that these defined benefit systems have long been abandoned in the private sector and many companies have made the transition to a defined contribution system,” he said. “I'm not suggesting we necessarily have to go that route in the state of Iowa, but I do think there needs to a thoughtful review of the systems and their sustainability for the long term.”

Ken Sagar, president of the Iowa Federation of Labor, said state workers make up about 30 percent of the 50,000-person membership. The union covers construction workers, transport drivers, communications workers and others.

“It doesn't surprise me at all that this governor would try to weaken worker pensions. It's clearly an attempt to try to do what he tried to do with health care,” Sagar said. “We'll work with the Legislature to help protect workers' rights.”