Iowa's retirement funding plan gets personal for IPERS' leader

CEO of Iowa's largest public employees' pension fund leaving this spring

Donna Mueller, CEO of IPERS. (Supplied photo)
Donna Mueller, CEO of IPERS. (Supplied photo)

DES MOINES — Donna Mueller, who has served as chief executive officer of the Iowa’s largest public employees’ pension fund for the past 16 years, is looking forward to soon enjoying the fruits of her labors.

Mueller’s latest four-year term as CEO of the Iowa Public Employees’ Retirement System is slated to expire April 30. The IPERS’ leader since 2003 says she plans to retire and begin drawing benefits from the prefunded system she has worked to keep among the strongest and safest in the nation for its 360,000 current, former and retired public employees of state government, school districts and local governments.

“It’s been a great opportunity and the 16 years have really flown by and I’ve really enjoyed it and look forward to be on the receiving end of IPERS,” Mueller said in an interview. “You work at a retirement to be able to enjoy the retirement. I look forward to that in May.”

Guiding the IPERS trust fund with more than $35 billion in assets is no small task. Mueller’s tenure at the helm of a job paying her the maximum yearly salary of $205,150 included weathering the 2008 recession that zapped investments by the billions and dealing with unscrupulous contractors that defrauded IPERS and other investors of hundreds of millions of dollars in 2009. Fortunately, IPERS recovered nearly 98 percent of its principle investment after federal authorities indicted two leaders of WG Trading Co. and Westridge Capital Management on charges of misappropriating institutional investor capital. Mueller said the experience prompted changes in IPERS’ approach to the custody of its investment funds.

“Lessons learned. We’re trying to be more diligent in all of our investments and hopefully it doesn’t reoccur. But never say never because, unfortunately, there are always some dishonest people in the world,” said Mueller in discussing a case she said involved a “minor, minor, minor” portion of IPERS’ overall portfolio.

“It was a strategy that would have worked if the individuals had been honest and had not been pocketing a lot of the profits for themselves,” she said. “But it happened. We worked with the Attorney General’s Office and others and got about 98 percent of our principle back, which is pretty good if you want to compare it with some of the other frauds that were exposed at that time frame. But definitely lessons learned.”

Working with actuarial advisers, governors and state legislators, IPERS’ contribution rates and benefit payouts were adjusted to provide a better balance that has improved the fund’s ratio of assets to liabilities to 83.73 percent as of last June 30, Mueller said.


Contributions by employees and employers totaled $1.294 billion during the past fiscal year, while benefits paid hit $2.223 billion (about $1.9 billion going to beneficiaries who remain in Iowa) with the remaining $929 million funded by earnings and sale proceeds from the investment portfolio — which posted a 8.35 percent rate of return last fiscal year.

IPERS’ average retiree put in 23 years of service before ending work at age 61 and receiving an average benefit of $17,484, according to the IPERS’ fiscal 2019 annual report.

In a question-and-answer conversation with The Gazette, Mueller said “IPERS is a good, stable system. It’s not a real rich benefit but it’s a good, core benefit and we’re really headed in the right direction.”

Q: What were the biggest challenges that you faced during your time with IPERS?

A: “Here in Iowa we are living longer so we have to plan that we are going to be paying pensions longer. So good news for the members — you’re living longer. Bad news for the system — your members are living longer, you have to pay more for a longer period of time,” Mueller said. “There’s always a challenge in administering retirement funds because everyone thinks, oh, retirement, it’s just sleepy, there’s really not much involved, it’s a pretty straightforward, easy job. Right? Well, it isn’t because I feel a great responsibility to be a fiduciary for a trust fund that is probably one of the largest firms in Iowa. We’re currently managing $35 billion for the current retirement and future retirement of over 360,000 past and current public employees. That’s a tremendous responsibility. Some of the biggest challenges have been getting everyone to understand that we need to pay attention to how we’re funding this properly and the first few years when I started this position it was then already a challenge that we — the members and the Legislature — needed to make some changes to properly fund the commitment that the legislators had made to the public employees. It took a number of years.”

Q: Other states are facing problems with their pension systems. How has Iowa avoided that?

A: “I think Iowa has always been conservative in its approach to its investments, so in many of the recession years the hole wasn’t dug as deep as in some but also — well, you heard me say it took too many years to change the funding plan but eventually it was. You’ll see some states still have their heads in the sand like an ostrich or it’s just gotten too big to deal with. Here with constant vigilance and working with the Legislature, working with the governors, the attention was paid to correcting the funding shortage.”

Q: Does the volatility associated with retirement investments make IPERS members skittish at times?

A: “Always. If I can say anything to you journalists, it’s be aware of the impact that your headline can have. When the headlines would come out that IPERS has a shortfall or investments are down, the market turned down — immediately we would have calls from individuals receiving pensions wondering whether they were going to get their pensions next month.”

Q: What advice would you give to your successor?

A: “I’d say be thankful you have a great crew here that’s working for the membership and there’s a good working relationship with the Legislature and with the governor’s staff — keep that going.”

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