Iowa Governor Kim Reynolds received $50,000 in a campaign contribution from Rex Sinquefield, a wealthy Missouri Republican who has waged an all-out war against that state’s public pension system. The Reynolds donation was the only contribution to an Iowa candidate Sinquefield has ever made, and only six individuals in total have given more than $50,000 to Reynolds.
That large donation could take on extra scrutiny as Reynolds tries to fight back against growing concerns that she would drastically restructure Iowa’s IPERS system. In recent days, she and other state Republicans have insisted they will not make any changes for the current Iowans who paid in to IPERS and are receiving benefits.
However, Reynolds has notably refused to rule out restructuring the system for future public employees, even as recently as yesterday. She called IPERS “not sustainable” in 2017 and backed bringing in a conservative think tank that supports hybrid pension systems to study IPERS.
Sinquefield, a former director of Dimension Fund Advisors who made a fortune on index funds, bankrolled many top Missouri Republicans’ campaigns in recent years. One of his top policy priorities was privatizing the state’s public pension plan. His former private investing industry stands to gain if public pensions get shifted to the private marketplace.
“One of [Sinquefield’s] policies is to privatize or eliminate the Missouri Public School Retirement System,” wrote a guest columnist in the St. Louis Post-Dispatch in 2017. “Sinquefield wants to see our teacher pension change from a defined benefit plan, with guaranteed benefits, to a defined contribution plan similar to a 401(k) account, essentially privatizing our pension. He claims that state-funded teacher pensions are typically underfunded, which is not true for the state of Missouri.”
Sinquefield ran a conservative think tank called the Show-Me Institute. It proposed a litany of very conservative plans to cut state revenue and dismantle benefits programs.
But the plank that advocated to “Move Missouri’s Public School Retirement System (PSRS) to a defined-contribution system” proved so controversial that it drew sharp blowback from teachers’ organizations. Sinquefield ended up having to resign his board position with Dimension Fund Advisors after the political fallout.
Teacher groups in Missouri noted that even if changes to the pension system were limited to future employees, it would eventually bankrupt the system for those still receiving benefits. Democrats in Iowa are sounding the same type of alarm to Reynolds’ possible changes to IPERS.
The question now for Reynolds is why exactly a Missouri Republican felt the need to invest so much money into one specific Iowa race. Is it because Sinquefield believe Reynolds would take the same approach to restructuring Iowa’s public pension system as he tried to do in Missouri?
by Pat Rynard