The Iowa Public Employees’ Retirement System has launched a nationwide search for a new chief executive. The search follows a turbulent spring at the $47 billion fund: the prior CEO resigned under a misconduct investigation, the Chief Benefits Officer was fired, and a former risk officer’s wrongful-termination lawsuit was allowed to proceed to discovery by a Polk County judge who found the state’s arguments rested in part on “arguable conclusions and leaps of logic.”
I have family members whose retirement security depends on IPERS. I am not a casual observer of this process, and no Iowan should be.
The Financial Times reported on May 9 what officials inside the fund have been saying for years: IPERS has a governance problem. Compared to nearly every other large public pension in the country, Iowa’s system is missing the basic safeguards that keep ordinary problems from becoming scandals. Three facts from IPERS’s own published reports tell the story.
First, the benchmark. IPERS reports beating its policy benchmark in seven of the past ten years. But IPERS designs that benchmark to match its own asset allocation. Its private equity holdings are measured against its own private equity returns; its real assets against its own real assets returns. The 2024 disclosure shows three private asset classes where the return and the benchmark match to two decimal places. Over the same period, IPERS trailed the median large U.S. public pension fund — by roughly 90 basis points a year over three years, just over 60 over five years, and 85 over ten.
Second, costs. For seventeen consecutive years, an outside firm paid by IPERS has reported that IPERS is the lowest-cost fund in its peer group. At the December 2025 Investment Board meeting, a senior IPERS investment officer told the board that the reported figure of 13.7 basis points would rise to roughly 70 basis points if incentive fees and carried interest were included. Five times the public number. On a $47 billion fund, that gap is about $265 million a year that beneficiaries cannot see in standard disclosures.
Third, risk. The position responsible for independently monitoring investment risk has been vacant for more than three years. The man who held it, Rich Wiggins, was hired in 2022 with the explicit charge of ensuring IPERS did not become the next Pennsylvania scandal — the 2021 case in which an inflated return figure triggered an FBI investigation and forced more than 100,000 school employees to pay higher contributions. Wiggins was terminated in 2023 for being a “bad fit.” His lawsuit alleges retaliation. The seat has not been filled since. Among the twenty largest U.S. public pensions, a multi-year vacancy in this role is essentially unheard of.
The fund has a sound funded status, a capable staff, and a long record of meeting its obligations. But its Investment Board has authority over investment policy only — not over the chief executive, who is appointed by the governor and reports through the executive branch. It operates without an independent investment risk officer, with a state auditor whose authority was curtailed in 2023, and with a legislative committee that declined to act in the 2026 session. The only oversight mechanism currently in motion is one fired employee’s lawsuit.
The Iowa Legislature should give IPERS a true governing board — either by expanding the Investment Board’s authority or creating a new one — with the power to hire, oversee, and remove the chief executive. The body closest to the fund should not be a bystander when its leadership fails. And the legislature should build that board correctly. IPERS board seats are political appointments, which means the selection process rewards political fit over financial qualification. One Iowan who interviewed for a board seat years ago told me he left convinced the system was not looking for members who would ask hard questions. That holds regardless of which party occupies the governor’s office. A board is only as good as the expertise around the table; if Iowa fills these seats as political favors, it will have rebuilt the same problem under a new name. The seats must be reserved for people with demonstrated investment and fiduciary expertise.
The Legislature should also create an Office of Inspector General with subpoena power over the fund. And in the meantime, the IPERS Investment Board should press for a chief executive whose mandate is to fix what is broken: honest benchmarks measured against investable alternatives, full disclosure of investment costs, and an independent risk officer who reports to the board, not to the people taking the risk.
Iowa’s pension fund is not failing its members today. But the absence of real oversight is not a problem that announces itself — until it does. The next CEO, and the board structure the Legislature builds around that person, will determine whether IPERS is governed by genuine expertise or by political habit. For 424,000 Iowans, that is not a small question.
Erik Lie is a professor of finance and an Iowa resident with family members who depend on IPERS. He was previously named one of Time Magazine’s 100 most influential people in the world for his work uncovering corporate financial misconduct.
This article originally appeared on Des Moines Register: Choice for new IPERS chief will shape 424,000 retirements | Opinion
Reporting by Erik Lie, Guest columnist / Des Moines Register
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By Erik Lie, Guest columnist | USA TODAY Network
