On Tuesday, credit rating agency Standards & Poor’s entered a $1.375 billion settlement with 18 states over the alleged inflated ratings it gave mortgage-backed securities which eventually turned toxic.
Iowa will receive $21.5 million, of which $20 million will be distributed among its 5 pension systems.
The distribution is as follows, according to the Des Moines Register:
Iowa’s money will be distributed among public employee retirement systems, specifically, the Iowa Public Employee’s Retirement System will get $10 million; Teachers Insurance and Annuity Association-college Retirement Equities Fund will get $2.5 million; the Peace Officers’ Retirement System will get $2.5 million; the Municipal Fire and Police Retirement System of Iowa gets $2.5 million and the Iowa Judicial Retirement Fund gets $2.5 million.
“We think that’s appropriate because it’s possible that these (systems) had some of these residential mortgage-backed securities … But probably more significantly, because this whole failure by S&P played such a role in the financial downturn, all five funds were affected very significantly,” Miller said. “It’s a good settlement.”
Miller said employees who have these retirement systems may not individually feel the results of this settlement but there will be a greater amount of money in reserves to support retirement checks in the future.
The Justice Department statement on the settlement, which includes a list of the states receiving money, can be read here.