This scandal is in its early stages. They effectively tried to cook the books in order to make their funding metrics look better.
The $47bn Iowa public pension fund has been plunged into a governance crisis, with its chief executive resigning, its chief benefits officer terminated and a former risk officer claiming top officials misled the investment board. Greg Samorajski, chief executive of the Iowa Public Employees’ Retirement System, resigned effective May 1, while Steven Herbert, its chief benefits officer, was fired effective on Thursday after both had been placed on administrative leave during investigations into unspecified misconduct allegations. A former risk officer, Rich Wiggins, alleged in a lawsuit that Samorajski and chief investment officer Sriram Lakshminarayanan used misleading benchmarks and risk measures to make the fund appear to be performing better than it was.
It’s unlikely to be worse than Chicago pensions, but let me go look….
Okay, I had IPERS show up once in STUMP on its own over the years, but not for performance or anything, just referenced in one of my may 80% funding myth posts (not going to link, because it’s not relevant).
I’m going to check where it falls in my allocation to alts listing:
Say hello to a moving company as I take myself and my deferred tax retirement accounts to a more fiscally responsible state and let Illinois fail miserably without me and my wallet.
There was a reference to PSERS, which we do have a thread on here:
[and yes, I used my links here to remind me a bit]
As far as I can tell, there’s nothing particularly special about IPERS, other than they may have screwed up in getting someone who is an outsider to the public pensions sphere to come in as a risk officer (whupsie, won’t play along!) … as opposed to the shit show that happened with Calpers management (hmmmm).
And I can remind people what happened there, if you’d like.
Many public pensions are hiding the fees they are paying to public equity, etc.
I haven’t done a deep dive on the IPERS allocation to alternatives, and perhaps they’re leveraged more than I can see, but they’re only a little higher than the median allocation as far as I can tell.
That doesn’t mean it’s great… it’s that a bunch of public pension plans have greatly increased their allocations to alts post-GFC to chase yield, and it’s only been going up up up. The specifics where the CEO & other top brass of IPERS may have been goosing the numbers to hit targets (and a dumbass metric that was a glorified tracking error) may have been their particular downfall, but hiding private equity/asset management fees on the alts is par for the course for many of the public pension funds.
