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Wednesday, October 30, 2019
TRS SETS PRELIMINARY FY 2021 STATE CONTRIBUTION AT $5.1 BILLION/ NET INVESTMENT RETURN FOR FY 2019 WAS 5.1%
October 30, 2019
SPRINGFIELD, IL – The Teachers’ Retirement System Board of Trustees has given preliminary approval to a $5.14 billion state contribution to the System for fiscal year 2021, a 6.9 percent increase over the current fiscal year’s government contribution of $4.81 billion.
The Board also announced that the TRS investment portfolio generated a positive 5.15 percent return, net of fees, during fiscal year 2019.
In approving the FY 2021 preliminary contribution, the trustees noted that the $5.14 billion is derived from a funding formula in state law that deliberately underfunds the System. The FY 2021 statutory contribution falls $3.2 billion short of the amount of money that actuaries calculate would “fully fund” the cost of TRS pensions in the coming year, or $8.34 billion.
“Any way you look at it, $5 billion is a lot of money. But because the state has underfunded TRS every year for 81 years, a contribution that further shortchanges the System will make our overall financial position worse in the future,” said TRS Executive Director Dick Ingram. “We have enough money on hand to pay all pensions into the future. But for every $1 TRS does not receive now means the state will have to pay nearly $3 in the future to eventually pay all our upcoming obligations. The unpaid debt gets bigger.”
Approximately 75 percent of the FY 2021 contribution is dedicated to paying off a portion of the TRS unfunded liability, which grew during FY 2019 by 3.7 percent to $78.1 billion. Only a quarter of the state contribution is dedicated to the actual cost of teacher pensions.
With the growth of the unfunded liability in FY 2019, the funded status of TRS remained relatively stable at 40.6 percent, compared to 40.7 percent in FY 2018. Total long-term liabilities for TRS grew 3.5 percent during FY 2019, to $131.5 billion. The previous year’s total liability was $127 billion.
The TRS Board is required each year to certify the state’s annual contribution to the System for the next fiscal year. That preliminary contribution is then reviewed by the State Actuary before it is included in the state budget for the upcoming year.
TRS ended fiscal year 2019 on June 30 with $52.65 billion in assets, an increase of 2.2 percent for the year. Gross of fees, the TRS return for FY 2019 was 5.8 percent. Long-term TRS investment returns continue to exceed the System’s long-term assumed return rate of 7 percent. For FY 2019, the 30-year return was 8.04 percent. Since the current investment portfolio was implemented in 1982, the TRS return is 9.37 percent.
“The long-term investment returns are the most important numbers for our members,” Ingram said. “These timeframes reflect the long-term relationship that TRS has with its members, both as active educators and as retirees. The long-term returns also indicate a successful investment program that values steady growth and strong risk management over several generations.”
TRS investments have recorded positive returns in each of the last 10 years following the worldwide financial crisis of 2008-2009. All returns in this chart are net of fees:
Fiscal Year TRS RETURN
2019 + 5.2%
2018 + 8.5%
2016 + 0.01%
2015 + 4.0%
2012 + 0.8
During the Board of Trustees’ regularly scheduled October meeting, the TRS investment staff reported the following actions:
- Within the System’s $7.24 billion Private Equity Portfolio:
- The commitment of $24 million to Sunstone Partners, of San Mateo, California. Sunstone currently administers $19.2 million in TRS assets.
- The commitment of $45 million to Zelnick Media Capital, of New York, New York. This is a new relationship for TRS.
- Within the $7.4 billion Real Estate Portfolio:
- The commitment of $60 million to Exeter Property Group, of Conshohocken, Pennsylvania. Exeter currently administers $28.9 million in TRS assets.
- Within the $13.97 billion Global Income Portfolio:
- The commitment of $500 million to Intermediate Capital Group, of London, United Kingdom. This is a new relationship for TRS.
- The commitment of $500 million to Hayfin Capital Management, of London, United Kingdom. This is a new relationship for TRS.
- The commitment of $125 million to Beach Point Capital Management, of Los Angeles, California. Beach Point currently administers $90 million in TRS assets.
- The commitment of $125 million to Cerberus Capital Management, of New York, New York. This is a new relationship for TRS.
- Within The $5.5 billion Diversifying Strategies Portfolio:
- The commitment of $100 million to Kirkoswald Capital Partners, of New York, New York. Kirkoswald currently administers $200 million in TRS assets.
- The commitment of $50 million to Brevan Howard Asset Management of the Bailiwick of Jersey. Brevan Howard currently administers $172.5 million in TRS assets.
- The redemption of $200 million from Bridgewater Associates, of Westport, Connecticut. Bridgewater continues to administer $259 million in TRS assets.
- The redemption of $75 million from KeyQuant, of Paris, France.
About Teachers’ Retirement System
The Teachers’ Retirement System of the State of Illinois is the 37th largest pension system in the United States, and provides retirement, disability and survivor benefits to teachers, administrators and other public school personnel employed outside of Chicago. The System serves 434,313 members and had assets of $52.65 billion as of June 30, 2019.
Director of Communications
Teachers’ Retirement System of the State of Illinois
Teachers’ Retirement System must comply with current state and federal laws, even in the event of an employee’s factual or legal misstatement or a benefit miscalculation. This correspondence is not personal tax or legal advice. Correspondence sent electronically to and from TRS should not include Social Security numbers and may be subject to disclosure under the Illinois Freedom of Information Act. To protect private or confidential information, please contact TRS immediately if this message is received by mistake and destroy this correspondence and its attachments without reading, printing or saving.
Wednesday, October 23, 2019
“In a shocking reversal, Biogen (BIIB) on Tuesday [October 22] said that it would resurrect an Alzheimer’s drug that the company previously said had failed and will ask the Food and Drug Administration to approve it. The company said a ‘new analysis of a larger dataset’ showed that the drug, aducanumab, reduced clinical decline in patients with early Alzheimer’s disease on multiple measures of the drug’s effectiveness. That directly contradicts a decision in March to halt studies of the therapy based on the recommendations of an independent monitoring board that was charged with protecting patients in the study.
“Aducanumab’s failure sent shock waves far beyond Biogen. It was thought to be the last of a series of drugs — the previous ones, from many different drug companies, all failed — that targeted a protein in the brain called beta amyloid. After Biogen’s announcement in March, most researchers and biotechnology executives saw little hope for a drug that would help patients with Alzheimer’s disease even as cases mount.
“Biogen said that it conducted a new analysis in consultation with the FDA of a larger data set from the discontinued studies. The new analysis includes additional data that became available after the previous analysis showed the studies were ‘futile’ — that it had no chance of succeeding. Biogen said that the new data show aducanumab is ‘pharmacologically and clinically active’ and that it reduced patients’ clinical decline based on the results of a survey called Clinical Dementia Rating-Sum of Boxes (CDR-SB), which was the main goal of both studies.
“‘With such a devastating disease that affects tens of millions worldwide, today’s announcement is truly heartening in the fight against Alzheimer’s. This is the result of groundbreaking research and is a testament to Biogen’s steadfast determination to follow the science and do the right thing for patients,’ Michel Vounatsos, Biogen’s chief executive, said in a statement. ‘We are hopeful about the prospect of offering patients the first therapy to reduce the clinical decline of Alzheimer’s disease and the potential implication of these results for similar approaches targeting amyloid beta.’
“Al Sandrock, Biogen’s head of research and development and chief medical officer, said in his first interview about the new results that his team could only find one previous instance where a trial was stopped for futility and then it turned out to be positive.
“‘I have to pinch myself because I almost don’t believe it yet,’ Sandrock said. ‘It’s so amazing to have this change from March. But I’m also very, very happy because … I know people with mild cognitive impairment and I felt like I had let them all down.’
“By June, as Biogen analyzed the full data set, researchers started to realize that a different picture was emerging of aducanumab, Sandrock said. The reason was because of changes that Biogen had made to the study late in the game. Initially, the company worried about a potential side effect — brain swelling — and limited the dosage of the drug. But later patients were allowed to receive higher doses of the medicine. ‘In retrospect, the results of the futility analysis were incorrect,’ Sandrock said. ‘That’s because it was from a smaller dataset that looked at patients with less exposure to high dose aducanumab.’
“In essence, Sandrock said, the futility analysis had happened too soon. It had looked at data based on last December. But the trials were actually stopped in March. Biogen had run two studies. One, was positive in its own right for the high dose. A second still failed, but shows signs of benefit in those patients who received the higher dose of aducanumab.
“The situation is highly unusual, and Sandrock said it will be up to the FDA to decide whether to approve the drug based on a single positive trial. But he said Biogen has met with the FDA twice to discuss its decision, first in June and then again on Monday. He said that the FDA had provided preliminary written comments that led Biogen to file for approval, and that Biogen moved forward with an announcement without waiting for meeting minutes because there were no surprises during the meeting.
“Sandrock has also been quietly sharing the data with outside experts. ‘People do have an initial skepticism,’ he said. ‘Rightly so. But then when we start to show them the data and take them through it, most of them get very excited because now they see there is a prospect that the drug could be approved.’
“Biogen presented new data from its Alzheimer’s trial on a conference call with Wall Street analysts, who grappled with the company’s about-face and with complex and somewhat contradictory information.
“Umer Raffat, an analyst at the investment bank Evercore/ISI, first asked if the departure of Michael Ehlers, Biogen’s previous research and development chief, had anything to do with disagreements over the Alzheimer’s dataset. Vounatsos, the Biogen CEO, said that Ehlers’ departure was personal, implying that disagreement over data did not play a role.
Raffat also asked whether, in a way, one trial was successful and another had failed. The data in the low-dose groups were consistent across trials. Why should there be confidence in a result that only occurred in one study?
“In one study, called Emerge, patients on the high-dose aducanumab had a 23% reduction in their rate of decline compared to those on placebo; those who were on the low dose were 11% lower than placebo, but that result was not statistically significant. But in the second trial, Engage, the decrease was only 2% in patients on the high dose. Biogen said that the patients in Emerge received higher doses due to changes made late in the studies.
“But Biogen disclosed data in patients who completed the study, as well as in all patients. Raffat noted that the patients who did not complete seemed to show benefit as well. He called this ‘confusing’ in a note to investors following the conversation.
“In his note, Raffat still seemed skeptical. Given the one positive result, Raffat wrote that it is ‘not inconceivable that FDA is open to this filing.’ However, whether an FDA approval would translate into commercial success is ‘a whole different debate,’ he wrote.
“Both investors and researchers will spend the next several months struggling with the results. In the meantime, Biogen will make the drug available to patients who were previously enrolled in its clinical trials” (In Shocking Reversal, Biogen to Submit Experimental Alzheimer’s Drug for Approval by Matthew Herper).
Sunday, October 20, 2019
Section 222. “…[W]henever the legislators endeavour to take away, and destroy the property of the people, or to reduce them to slavery under arbitrary power, they put themselves into a state of war with the people, who are thereupon absolved from any farther obedience, and are left to the common refuge, which God hath provided for all men, against force and violence. Whensoever therefore the legislative shall transgress this fundamental rule of society; and either by ambition, fear, folly or corruption, endeavour to grasp themselves, or put into the hands of any other, an absolute power over the lives, liberties, and estates of the people; by this breach of trust they forfeit the power the people had put into their hands for quite contrary ends, and it devolves to the people, who have a right to resume their original liberty, and, by the establishment of a new legislative, (such as they shall think fit) provide for their own safety and security, which is the end for which they are in society. What I have said here, concerning the legislative in general, holds true also concerning the supreme executor, who having a double trust put in him, both to have a part in the legislative, and the supreme execution of the law, acts against both, when he goes about to set up his own arbitrary will as the law of the society. He acts also contrary to his trust, when he either employs the force, treasure, and offices of the society, to corrupt the representatives, and gain them to his purposes; or openly pre-engages the electors, and prescribes to their choice, such, whom he has, by solicitations, threats, promises, or otherwise, won to his designs; and employs them to bring in such, who have promised before-hand what to vote, and what to enact. Thus, to regulate candidates and electors, and new-model the ways of election, what is it but to cut up the government by the roots, and poison the very fountain of public security?...” (Locke, “Of the Dissolution of Government” chap. XIX, p. 135).
Section 135. “Though the legislative, whether placed in one or more, whether it be always in being, or only by intervals, though it be the supreme power in every commonwealth; yet: First, It is not, nor can possibly be absolutely arbitrary over the lives and fortunes of the people…” (“Of the Extent of the Legislative Power” chap. XI, p. 81).
Section 136. “Secondly, the legislative, or supreme authority, cannot assume to its self a power to rule by extemporary arbitrary decrees, but is bound to dispense justice, and decide the rights of the subject by promulgated standing laws, and known authorized judges…” (p. 83).
Section 137. “Absolute arbitrary power, or governing without settled standing laws, can neither of them consist with the ends of society and government, which men would not quit the freedom of the state of nature for, and tie themselves up under, were it not to preserve their lives, liberties and fortunes, and by stated rules of right and property to secure their peace and quiet. It cannot be supposed that they should intend, had they a power so to do, to give to any one, or more, an absolute arbitrary power over their persons and estates, and put a force into the magistrate's hand to execute his unlimited will arbitrarily upon them… [F]or all the power the government has, being only for the good of the society, as it ought not to be arbitrary and at pleasure, so it ought to be exercised by established and promulgated laws; that both the people may know their duty, and be safe and secure within the limits of the law; and the rulers too kept within their bounds, and not be tempted, by the power they have in their hands, to employ it to such purposes, and by such measures, as they would not have known, and own not willingly” (pgs. 84-85).
Locke, John. Second Treatise of Civil Government. Chicago: Great Books Foundation, 1948. (Locke’s book appeared anonymously in 1690).
Saturday, October 19, 2019
“Sports legend Michael Jordan gave an emotional speech and burst into tears as he opened a $7 million clinic that would guarantee health care for the uninsured in his hometown of Charlotte. The Novant Health Michael Jordan Family Medical Clinic held its ribbon cutting ceremony Thursday, which was attended by the athlete turned business mogul. ‘This is a very emotional thing for me to be able to give back to a community that has supported me over the years,’ Jordan said during the ceremony.
“The center has been in operation about three weeks, and more than 300 people have already been seen by staff doctors, social workers and other health-care professionals. ‘It's ... from the heart,’ Jordan, owner of the Charlotte Hornets, told the crowd gathered at the grand opening about the gift. ‘I stand here before you as a proud parent, son, obviously a member of this community,’ Jordan, 56, said, adding his extended family deserves as much credit as he does for the clinic.’ ...You see my name, but yet you see a lot of people behind me and the commitment, especially from my mom, about caring for other people and being a part of a community that matters.’
“Two years ago, Jordan donated $7 million to get the center funded. His donation was designed to benefit financially struggling residents of the Charlotte area and improve the community's access to medical care. He is a longtime resident of the state and played college basketball at North Carolina before launching his Hall of Fame career with the Chicago Bulls.
“‘Today we celebrated the grand opening of the Novant Health Michael Jordan Family Medical Clinic,’ the center said on social media. ‘With Michael's generous $7 million donation, low-income Charlotte residents of all ages now have access to get the affordable medical care they need, with or without insurance.’
“In a press release, the center shared that it ‘will also offer additional comprehensive care, including behavioral health and social support services, to more directly address health equity gaps and social determinants of health in our communities.’
“’At Novant Health, we are deeply committed to caring for patients beyond our walls,’ said Carl Armato, CEO and president of Novant Health, in the release. ‘This clinic will not only provide access to medical care for those who need it most, but it will connect them to resources to ensure their health extends beyond the doctor's office. We are so grateful for Michael Jordan's continued partnership and generous gift, which will transform thousands of lives in the west Charlotte community.’
“The release further states that the clinic aims to improve access to care in ‘an area identified as having high priority public health concerns by a Health Needs Assessment.’ The release continues: ‘This assessment was conducted not long after Charlotte was ranked 50th out of 50 in economic mobility for children born into poverty by a 2014 Harvard University/UC Berkeley study.’
“The center will be open Mondays through Fridays from 8am to 5pm. Walk-ins are accepted along with same day appointment scheduling.”
Friday, October 18, 2019
Wednesday, October 16, 2019
"The Trump administration says it will issue a permit to a Michigan trophy hunter to import the skin, skull and horns from a rare black rhinoceros he shot in Africa"
WASHINGTON — “...Documents show Chris D. Peyerk of Shelby Township, Michigan, applied last year for the permit required by the Fish and Wildlife Service to import animals protected under the Endangered Species Act.
“Peyerk paid $400,000 to an anti-poaching program to receive permission to hunt the male rhino bull inside a Namibian national park in May 2018.
“The International Union for Conservation of Nature lists black rhinos as a critically endangered species, with about 5,500 remaining in the wild. Nearly half of those are in Namibia, which is allowed under international convention to permit five male rhinos a year to be legally killed by hunters.
“The specific subspecies Peyrek listed on his application, the southwestern black rhinoceros, is listed as ‘vulnerable’ by the IUCN, meaning it is at less threat of extinction than the rest of the species as a whole.
“Peyerk did not respond to a phone message on Thursday seeking comment. He is president of Dan’s Excavating Inc., a large construction contractor in Michigan.
“The numbers of black rhinos have been increasing in recent years with stricter conservation management, but dozens are still illegally poached each year for their horns, which are sold on the black market for use in traditional Chinese medicine and as a status symbol. The horns are composed largely of the protein keratin, also the chief component in hair and fingernails.
“‘Legal, well-regulated hunting as part of a sound management program can benefit the conservation of certain species by providing incentives to local communities to conserve the species and by putting much-needed revenue back into conservation,’ said Laury Parramore, spokeswoman for the Fish and Wildlife Service.
“For decades federal regulators issued no import permits for black rhinos, but as populations rebounded in Africa the Obama administration issued three starting in 2013. The Trump administration has issued another two.
“Though President Donald Trump derided trophy hunting in a tweet as a ‘horror show,’ his adult sons are avid big-game hunters and his administration reversed Obama-era restrictions on the import of endangered elephant and lion trophies from several African countries.
“Records show Peyerk was represented in his effort to get a rhino permit by John J. Jackson III, a Louisiana attorney who provides free legal assistance to trophy hunters through a nonprofit group called Conservation Force. He is also a past president of Safari Club International, a trophy hunting group that has lobbied the Trump administration to loosen import restrictions on endangered big game animals.
“Jackson was appointed in 2018 to the International Wildlife Conservation Council, an advisory board set up by then-Interior Secretary Ryan Zinke to help promote trophy hunting. Jackson said he sees no conflict between advising the Fish and Wildlife Service on policy issues while also petitioning the agency on behalf of his legal clients. ‘The permitting is just one cog in the conservation wheel of what we do,’ Jackson said Friday. ‘We establish and support programs on the ground that enhance the survival of the particular species. Our mission is the recovery of the species population, not the private interest of the hunter.’
“The $400,000 paid by Peyrek went to a trust fund set up by the Namibian government for wildlife management, conservation, rural development and other activities aimed at promoting the coexistence of humans and wildlife.
“The Humane Society criticized the federal decision to allow Peyerk to import the black rhino’s taxidermized remains. ‘We urge our federal government to end this pay-to-slay scheme that delivers critically endangered rhino trophies to wealthy Americans while dealing a devastating blow to rhino conservation,’ said Kitty Block, the head of the Humane Society of the United States and Humane Society International. ‘While we cannot turn back the clock to save this animal, the administration can stop the US from further contributing to the demise of this species by refusing future import permits of black rhino trophies.’”
Monday, October 14, 2019
Scientists’ Declaration of Support for Non-Violent Direct Action Against Government Inaction Over the Climate and Ecological Emergency
THIS DECLARATION SETS OUT THE CURRENT SCIENTIFIC CONSENSUS CONCERNING THE CLIMATE AND ECOLOGICAL EMERGENCY AND HIGHLIGHTS THE NECESSITY FOR URGENT ACTION TO PREVENT FURTHER AND IRREVERSIBLE DAMAGE TO THE HABITABILITY OF OUR PLANET.
As scientists, we have dedicated our lives to the study and understanding of the world and our place in it. We declare that scientific evidence shows beyond any reasonable doubt that human-caused changes to the Earth’s land, sea and air are severely threatening the habitability of our planet. We further declare that overwhelming evidence shows that if global greenhouse gas emissions are not brought rapidly down to net zero and biodiversity loss is not halted, we risk catastrophic and irreversible damage to our planetary life-support systems, causing incalculable human suffering and many deaths.
We note that despite the scientific community first sounding the alarm on human-caused global warming more than four decades ago, no action taken by governments thus far has been sufficient to halt the steep rise in greenhouse gas emissions, nor address the ever-worsening loss of biodiversity. Therefore, we call for immediate and decisive action by governments worldwide to rapidly reduce global greenhouse gas emissions to net zero, to prevent further biodiversity loss, and to repair, to the fullest extent possible, the damage that has already been done. We further call upon governments to provide particular support to those who will be most affected by climate change and by the required transition to a sustainable economy.
As scientists, we have an obligation that extends beyond merely describing and understanding the natural world to taking an active part in helping to protect it. We note that the scientific community has already tried all conventional methods to draw attention to the crisis. We believe that the continued governmental inaction over the climate and ecological crisis now justifies peaceful and nonviolent protest and direct action, even if this goes beyond the bounds of the current law.
We therefore support those who are rising up peacefully against governments around the world that are failing to act proportionately to the scale of the crisis.
Click Here for Signatories: We believe it is our moral duty to act now, and we urge other scientists to join us in helping to protect humanity’s only home.
Click Here for Signatories: We believe it is our moral duty to act now, and we urge other scientists to join us in helping to protect humanity’s only home.
Monday, October 7, 2019
Today’s paper [October 6th] indicates that the Chicago teachers want school nurses, social workers and librarians. I often wondered whether a school nurse was necessary in River Forest and when ours retired and was not replaced, I figured we didn't.
Then along came a skinny little girl with unkempt hair to my third-grade classroom. There were a few rundown frame homes in south River Forest that the owner rented out to employees. This youngster's mother had run away, leaving her husband in a coup with a passel of kids.
My little charge had many problems, but the one most disturbing to the running of my classroom was that she would leave a trail of "turds" (feces) in the classroom much to the dismay of her prim and proper classmates.
I bought her clean underwear and arranged for her to change in the old nurse's office, and then deposit the soiled underpants in plastic bags that were there for her use in the same drawer. Well, one day she felt that she didn't want me to know she had soiled herself again so she flushed the cotton pants down the toilet causing it to, of course, over flow!
She grew to love me and, of course, she received lots of my attention. I realized that the child had a real artistic talent and with her father's permission took her to the Chicago Art Institute one Saturday. She loved it all but was especially taken by a modern statue by the English artist Moore (Henry Moore, I think).
Anyway, I told her it was a statue of a mother caressing her child. I could hardly restrain my young charge from climbing up and placing herself in the arm piece of the sculpture.
The next spring the family disappeared, and I never heard of my little girl again. Each summer I stand by that statue in one of the Institute's gardens wondering how she is all grown up with children of her own.
We didn't have a nurse or a social worker in our schools at that time. I wonder if they would have made a difference in that child's life. I can't help but wonder if there aren't thousands of Chicago kids with similar stories.