Wednesday, October 31, 2012

Report on the October TRS Board Meeting by TRS Trustee Bob Lyons


Those of you that felt that the only course of action that should be taken by the TRS Board was to ask for the resignation of Executive Director Dick Ingram or, indeed, to fire him will be disappointed. Those of you that wanted an end to the problem of a director even talking about cutting existing benefits in order to save the system will hopefully be satisfied that the TRS Board took steps to accomplish that goal. The steps taken were done in closed session and with the unanimous consent of the Board. In public session, we voted to reaffirm our position that the remedy for underfunding the system was for the State to provide the funding necessary to pay the existing benefits.

TRS Report

Last spring, TRS Executive Director Dick Ingram was quoted in the press as saying that cutting current pension benefits would save the system money. His defense of the remark was that he was not advocating that action, but answering a question. At a special meeting, members of the board conveyed the message to him that he should only be talking about solutions to our system’s underfunding that are constitutional. Since that time, I have heard Dick Ingram speak a number of times and I have been satisfied with his message.

The article that recently appeared in Crain’s Chicago Business titled “Head of teacher pension fund says state will need to cut COLAs” came as a most unhappy surprise to me. Our TRS director had once again made the mistake of talking to a media outlet that had its own agenda. He was quoted as saying that other states had reformed their pensions by cutting the COLA. Ingram said that he was just talking about the subject and not advocating a course of action.

I heard from many of you through phone calls and emails. One email just said, “Fool me once ….” Many members said the director should resign or be fired. While I could certainly understand such sentiment, I was very conscious of the fact that it had taken TRS more than a year and a half and two national searches to find Dick Ingram. I also had no interest in seeing the Chicago Tribune and Mike Madigan make Ingram into a martyr who had been fired because, as they would put it, “He dared to tell the truth.”

Mike Blickhan, President of Adams County RTA, asked a most significant question when he wrote to me, “Has the board lost confidence/trust in Director Ingram? I know as a TRS ANNUITANT I have.” That was one of several questions I had when we started our regular October TRS meeting on the 24th. Each board member found at his/her place a letter from the Executive Board of the IRTA which called on the TRS board to control what our director said to the media and to repudiate his remarks. In the public comments section of our meeting, Janet Kilgus, President of IEA-Retired, spoke about the concerns of her members, and Ed Wollet, President of the DeWitt-Logan Counties RTA and Legislative Representative of his region, expressed the dissatisfaction and anger of those annuitants whom he represented.

The TRS board then went into executive session which lasted more than three hours on Wednesday, October 24th and more than an hour again on Friday, October 26th. What we did as board in executive session will by law stay in executive session. Publicly we reaffirmed our position of last spring:

“The Board of Trustees of the Teachers’ Retirement System reiterates and reaffirms its resolution of March 30, 2012 (as amended on April 30, 2012) declaring that present legislative action is paramount to ensure the continued solvency and viability of the plan, by providing for fairness and equity in benefits, adequate funding and adherence to generally accepted actuarial principles and standards. Additionally, the Board of Trustees underscores its unalterable position that any changes to the Pension Code must adhere to the Pension Protection Clause, Article 13, Section 5, of the Illinois Constitution of 1970.”

To answer Mike Blickhan’s question, the board's confidence in Director Ingram was certainly shaken, but not broken. Someone else sent me an email saying that Ingram has done a terrible job in every respect, but that is simply not true. He has misspoken twice when talking to the press, but in terms of running the system and growing the morale of our staff, he has done an excellent job. Since what was done was done in executive session, I can say no more than the board has now taken steps that give me confidence that going forward, Dick Ingram will convey the message that the state will need to look to increased funding rather than cutting benefits to move our pension fund toward solvency. Jim Bachman, IRTA Executive Director, asked if I was certain last spring that the problem had been solved, and I answered yes. The difference this time is that I am convinced that Dick Ingram truly understands the anger, the concern, and even the fear that many of our annuitants and active teachers felt about his remarks, which could be used in an attempt to take the benefits from them that they have earned.

When the director of a governmental agency speaks, he is speaking for the board. When Director Ingram speaks, he will be speaking for the TRS Board, which is committed to growing and protecting our pensions for the benefit of all of our members, active and retired.

Bob Lyons
 

 

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