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IPERS Tries to Ease Concerns About Frozen Assets PDF Print E-mail
Commentary/Politics - Iowa Politics
Written by Lynn Campbell   
Friday, 06 March 2009 14:48
IPERS CEO Donna Mueller

Officials with the Iowa Public Employees Retirement System (IPERS) attempted to ease concerns this week about its $339-million investment with Westridge Capital Management that's been frozen during the investigation of Westridge owners Paul Greenwood and Stephen Walsh for securities fraud.

Donna Mueller, IPERS' chief executive officer, told the legislature's joint Government Oversight Committee that the frozen assets represent just 2 percent of the pension fund that serves about 300,000 current and former employees in state government, cities, counties and school districts.

"We're going to aggressively pursue every last dollar," Mueller said. "We maintain an additional cash balance so that we do not have to unnecessarily cash out investments. We are managing cash so we have a cash reserve to pay monthly benefits. It's only 2 percent, so we have other assets that are available to manage and to pay benefits. A greater concern, almost, is what's happening in the economy and impacting the entire portfolio."

Karl Koch, IPERS' chief investment officer, said IPERS has been seeking modest and consistent returns, not chasing high returns. Koch said about 15 percent of IPERS strategies could be considered high-risk, while 51 percent are of moderate risk. He said that when IPERS officials learned the National Futures Association had taken action against one of its managers, they hoped it was a Friday-the-13th hoax. He said it will probably be years for the matter to be settled.

"We thought we had covered our bases. Obviously, something went wrong," Koch said. "We will learn from our mistakes."

Chairs of the Government Oversight Committee appeared satisfied that IPERS officials did what they could to prevent problems with its investments.

"I think they tried to do their job and investigate this company and make sure they were a good company, but again, they need to look internally and make sure that they do a better job in doing that and protecting all of our dollars that we put in there," said Senator Rich Olive (D-Sioux City).

Representative Vicki Lensing (D-Iowa City) said newspaper headlines about $339 million of IPERS' assets being frozen create a lot of fear for Iowans. She said lawmakers want to reassure Iowans that things are working the best they can, and those receiving IPERS checks will continue to get them.

"I think they're being very proactive," Lensing said of IPERS officials. "Other regulatory agencies didn't recognize there were problems. There had been audits done and there was no indication. I think it took them by surprise. I'm pleased they're looking inside to see if there are other things they could do to be more preventative going forward."