Board of Trustees of the Teachers’ Retirement System of the State of Illinois

Matthew Hunt
President
Appointed/Elected: Appointed
1st Term: June 2019
Current Term Expires: July 2022
Residence: Glen Ellyn
Contact: Email Matthew Hunt
 
Andrew Hirshman
Vice President
Appointed/Elected: Elected
1st Term: July 2015
Current Term Expires: July 2023
Residence: Oak Park
Contact: Email Andrew Hirshman
 
Beth Anderson
Appointed/Elected: Elected
1st Term: July 2020
Current Term Expires: July 2023
Residence: Ashkum
Contact: Email Beth Anderson
 
Dr. Carmen I. Ayala
Ex Officio
Appointed/Elected: By Statute
1st Term: March 2019
Current Term Expires: No expiration
Residence: Downers Grove
Contact: Email Dr. Carmen I. Ayala
 
Norma Bellcoff
Appointed/Elected: Appointed
1st Term: June 2019
Current Term Expires: July 2022
Residence: Edwardsville
Contact: 
Email Norma Bellcoff
 
Kevin (Duffy) Blackburn
Appointed/Elected: Appointed
1st Term: September 2021
Current Term Expires: July 2024
Residence: Joliet
Contact: Email Kevin (Duffy) Blackburn
 
Joseph Blomquist
Appointed/Elected: Elected
1st Term: July 2021
Current Term Expires: 2025
Residence: St. Charles
Contact: Email Joseph Blomquist
 
Marsha Byas
Appointed/Elected: Elected
1st Term: July 2019
Current Term Expires: July 2023
Residence: Marion
Contact: Email Marsha Byas
 
Maria “Mia” Jazo-Harris
Appointed/Elected: Appointed
1st Term: March 2021
Current Term Expires: July 2022
Residence: Bloomington
Contact: Email Maria “Mia” Jazo-Harris
 
Maureen Mena
Appointed/Elected: Appointed
1st Term: April 2019
Current Term Expires: July 2022
Residence: Bolingbrook
Contact: Email Maureen Mena
 
David Miller
Appointed/Elected: Appointed
1st Term: August 2019
Current Term Expires: July 2024
Residence: Lynwood
Contact: Email David Miller
 
Fred Peronto
Appointed/Elected: Elected
1st Term: July 2017
Current Term Expires: July 2025
Residence: Elmhurst
Contact: Email Fred Peronto
 
Larry Pfeiffer
Appointed/Elected: Elected
1st Term: July 2017
Current Term Expires: July 2025
Residence: Carlinville
Contact: Email Larry Pfeiffer
 
Doug Strand
Appointed/Elected: Elected
1st Term: July 2019
Current Term Expires: July 2023
Residence: East Moline
Contact: Email Doug Strand

Source:
 
Board of Trustees | Teachers' Retirement System of the State of Illinois (trsil.org)

Kanerva v. Weems: TRS Health Insurance Benefits Are Protected by the Constitution of Illinois

 

Kanerva v. Weems: Health Insurance Benefits Are Protected:

•       This was a constitutional challenge to an amendment to the State Employees Group Insurance Act which reduced State contributions toward health insurance costs for retired public pension system members and their survivors.

•       The Court held that this amendment was unconstitutional.

•       The Pension Protection Clause protects more than the pension annuity.  It protects all “benefits” of membership in a pension system, including health insurance benefits.

•       If there is any doubt about the scope of a constitutional protection for pension rights, those doubts are resolved in favor of the pensioner.

 

Kanerva and your health insurance benefits:

•       In Kanerva, the Supreme Court ruled that the Pension Protection Clause protects not only pension annuities but also “health insurance subsidies.”  (Kanerva, par. 49.)

•       In Kanerva, the Supreme Court invalidated amendments to the State Employees Group Insurance Act that “altered the State’s obligation to contribute toward the cost” of coverage by increasing retirees’ premiums and reducing the State’s contributions.  (Kanerva, par. 12-13.)  Importantly, the amendments challenged in Kanerva didn’t abolish a health insurance program.  They just made the benefits more expensive and pushed more costs onto retirees.

 

-from Attorney John Fitzgerald’s Power-Point Presentation at the IRTA Biennial Convention on October 30, 2017.

See also Kanerva v. Weems, 2014 IL 115811 | Casetext Search + Citator

The Teachers' Retirement System of Illinois Approves $5.9 Billion State Contribution for Fiscal Year 2023

SPRINGFIELD, IL – The TRS Board of Trustees has given final approval to a fiscal year 2023 state government contribution to TRS of $5.89 billion.

The TRS Board is required each year to calculate and certify the state’s annual contribution to the System for the next fiscal year. A preliminary contribution calculated in October was reviewed by the State Actuary, Cheiron, Inc., of McLean, Virginia, prior to final approval by TRS. The certified contribution is now forwarded to state officials for inclusion in the FY 2023 state budget.

The FY 2023 contribution is a 4 percent increase over the state’s $5.69 billion contribution for the current fiscal year. By comparison, the increase in the state’s contribution to TRS between FY 2021 and FY 2022 was 10.7 percent.

Led by a strong +25.5 percent net investment return in FY 2021 and a stable funding commitment from state government for the last few years, the System’s unfunded liability has decreased slightly from $80.7 billion to $79.9 billion. TRS ended FY 2021 with a record $63.9 billion in assets, according to the System’s annual actuarial valuation, compiled by Segal Consultants, of Chicago. The TRS funded ratio inched up during the year to 42.5 percent from 40.5 percent.

While the funded ratio is important as an official measure of the System’s long-term fiscal health, it is not a reflection of the System’s current financial ability to pay benefits. In any given year, TRS only is obligated under state law to pay out the amount of money owed annually to retired members and other beneficiaries. During FY 2021, benefits owed totaled $7.4 billion. TRS was more than able to pay all benefits for the year on time and in full. In fact, for 82 years TRS has paid all benefits in full and on time.

The actuarial valuation also revealed that since the 2019 inception of two benefit “buyout” programs, TRS members have collected $534 million in advance benefit payments. This led to a $70 million reduction in the required state contribution for FY 2023.

About Teachers’ Retirement System

               The Teachers’ Retirement System of the State of Illinois is the 42^nd 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 434,000 members and had assets of $64 billion as of September 30, 2021.

Dave Urbanek, Director of Communications, Teachers’ Retirement System of the State of Illinois, P.O. Box 19253, 2815 W. Washington Street, Springfield, Illinois 62794-9253

The Teachers' Retirement System of Illinois: Actuarial Review Shows Improvement in Long-Term Finances/State Contribution to Increase by 4%

 

SPRINGFIELD, IL –The long-term funded ratio of Teachers’ Retirement System improved slightly during fiscal year 2021 to 42.5 percent after several years of hovering at 40 percent.

And the TRS Board of Trustees approved a state government contribution for the System of $5.89 billion for FY 2023, a 4 percent increase over the state’s $5.69 billion contribution for the current fiscal year.

Led by a strong +25.5 percent net investment return and a stable funding commitment from state government for the last few years, the System’s unfunded liability decreased slightly from $80.7 billion to $79.9 billion. TRS ended FY 2021 with a record $63.9 billion in assets, according to the System’s annual actuarial valuation, compiled by Segal Consultants, of Chicago.

“While a small step, the improvement in the funded ratio is a positive move toward bringing stability to the system’s long-term finances,” said TRS Executive Director Stan Rupnik. “Any improvement is good news for our members, but we all realize that there’s still a lot of work ahead of us to sustain this momentum and reach our goal.”

In the last decade, the TRS funded ratio averaged 40.7 percent. Projections by Segal show slow but steady improvements in the funded ratio between FY 2021 and FY 2045, when state law requires TRS to have a funded ratio of 90 percent.

The funded ratio reflects the difference in the amount of money TRS has in assets against the amount of money the System needs to immediately pay all members the full amounts of benefits they are owed for the rest of time. Altogether, the System’s FY 2021 total long-term liability is $138.9 billion, a 2.4 percent increase over the previous year.

While the funded ratio is important as an official measure of the System’s long-term fiscal health, it is not a reflection of the System’s current financial ability to pay benefits. In any given year, TRS only is obligated under state law to pay out the amount of money owed annually to retired members and other beneficiaries. During FY 2021, benefits owed totaled $7.4 billion. TRS was more than able to pay all benefits for the year on time and in full. In fact, for 82 years TRS has paid all benefits in full and on time.

The actuarial valuation also revealed that since the 2019 inception of two benefit “buyout” programs, TRS members have collected $534 million in advance benefit payments, which has led to a $70 million reduction in the required state contribution in the new fiscal year.

               In other action, the trustees approved a slight increase in the annual target amount of TRS assets that should be administered by investment managers that qualify as Minority and Women-owned Business Enterprises (MWBE). The Board set a new internal goal of 22 percent. The previous year’s MWBE goal was 21 percent and in FY 2021 approximately 24.3 percent of TRS assets were managed by 35 MWBE firms, or a total of $15.5 billion.

The Board also reviewed the following investment actions:

 

• Within the System’s $10.2 billion Private Equity Portfolio:

 

• The commitment of approximately $105 million to Inflexion Private Equity Partners, of London, United Kingdom. Inflexion currently manages $150 million in TRS assets.

 

• The Commitment of $35 million to Sky9 Capital, of Shanghai, China in two funds. The first is $25 million to Sky9 Capital Fund V. The second is $10 million is to Sky9 Capital MVP Fund II. This is a new investment relationship for TRS.

 

• Within the System’s $9.6 billion Real Assets Portfolio:

 

• The commitment of up to $100 million to The BlackStone Group, of New York, New York. Blackstone currently administers $620 million in TRS assets.

 

• The commitment of $60 million to Brasa Capital Management, of Los Angeles, California. This is a new investment relationship for TRS.

 

• The commitment of $200 million to The LaSalle Group, of Chicago. LaSalle currently administers $6.9 million in TRS assets.

 

• Within the $15.8 billion Income Portfolio:

 

• The commitment of $100 million to Fundamental Advisors, of New York, New York. This is a new investment relationship for TRS.

 

• The commitment of $100 million to IFM Investors, of Melbourne, Australia. This is a new investment relationship for TRS.

 

• The commitment of $75 million to Proterra Investment Partners, of Minneapolis, Minnesota. Proterra currently administers $50 million in TRS assets.

 

• Within the $5.5 billion Diversifying Strategies Portfolio:

 

• The partial redemption of approximately $125 million from Aspect Capital, of London, United Kingdom. Aspect currently administers $342 million in TRS assets.

 

• The partial redemption of approximately $40 million from Graham Capital Management, of Rowayton, Connecticut. Graham currently administers $440.7 million in TRS assets.

 

• The partial redemption of $100 million from Tilden Park Capital Management, of New York, New York. Tilden Park currently administers $286.5 million in TRS assets.

###

About Teachers’ Retirement System

               The Teachers’ Retirement System of the State of Illinois is the 42^nd 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 434,000 members and had assets of $63.9 billion as of June 30, 2021.

Dave Urbanek

Director of Communications

Teachers’ Retirement System of the State of Illinois

P.O. Box 19253, 2815 W. Washington Street

Springfield, Illinois 62794-9253

(217) 814-2177 | FAX (217) 753-0967 | TDD (800) 526-0844 or 711

durbanek@trsil.org | http://www.trsil.org

 

Investments Soared Despite the Covid-19 Economic Downturn in 2020 for the Teachers' Retirement System of Illinois

 

From The Teacher's Retirement System: In recent months, assets in the TRS investment portfolio earnings have reached record levels, taking advantage of a surging national economy that broke free of last year’s COVID-19 downturn. That’s good news for all TRS members.

As of May 31, TRS managed assets totaling $62.2 billion – a record for the System and a 23.1 percent increase in assets in the last year. TRS held $50.5 billion at the end of May last year and closed fiscal year 2020 with $52.3 billion.

Through March 31 – the end of the January-March quarter for fiscal year 2021 – the TRS portfolio recorded a positive 16.4 percent investment return, net of fees. For the 12-month period that ended in March, TRS performance was a positive 24.3 percent, net of fees.

These results are much improved from the January-March quarter of fiscal year 2020, when the coronavirus affected the world economy and cut into the System’s assets. 

All public pension systems lost money during the January-March quarter of fiscal year 2020. But compared to similar public pension systems, TRS ranked among the nation’s leaders in its ability to preserve assets. During the January-March quarter, the TRS investment return was negative 9.95 percent, net of fees. However, an analysis of the 300 largest U.S. institutional investors indicated that the median return for public pension plans then was negative 12.6 percent.

Through forethought and careful planning, the TRS Investment Department successfully navigated the perils of the pandemic’s attack on the economy. It took several months, but TRS was able to rebuild the value of the System’s portfolio to pre-pandemic levels – and beyond in subsequent months.

The low point during the early months of the pandemic saw TRS assets at $48.5 billion at the end of March. By the end of Sept. 2020, TRS had worked back to $53.5 billion in investment assets, a 10.3 percent rebound in value. Prior to the pandemic, TRS began Jan. 2020 with $54.2 billion in assets.

 

 

News from the Teachers Retirement System in Illinois

SPRINGFIELD, IL – The Teachers’ Retirement System Board of Trustees today named R. Stanley Rupnik, an 18-year veteran of the System, as the new TRS Executive Director / Chief Investment Officer.

Rupnik has served as acting executive director since August of 2020 while retaining his previous role as CIO. He joined TRS from the private sector in April 2003 as director of investments and was named CIO in November of 2004. He previously served TRS as acting executive director between 2009 and 2011. His selection by the Board concludes a nationwide search for a new leader at TRS, which is the 40 ^th largest public pension system in the United States.

“We as a Board feel very comfortable with the way Stan has managed this wonderful institution,” said TRS Board President Devon Bruce. “You have done a great job in the last year and will continue to do so.”

 “I believe strongly in the staff we have at TRS,” Director Rupnik said. “The last year has been extremely challenging for them in a number of ways. Their professionalism and dedication in the face of rapidly changing circumstances has been inspiring. They are the reason I decided to pursue this position on a permanent basis.

“Our mission is vitally important to educators in every part of Illinois as well as to the overall economic health of the state,” he added. “I want to keep moving TRS forward.”

Service to the System’s 427,000 members remains the highest priority. An average of $586 million in benefits is distributed in full and on time every month. Each week, staff handles approximately 2,300 phone calls and 680 emails from members and schedules 160 one-on-one counseling appointments.

In recent months, assets in the TRS Investment Portfolio have reached record levels, taking advantage of a surging national economy that broke free of last year’s COVID-19 downturn. As of May 31, TRS managed assets totaling $62.2 billion – a record for the System and a 23.1 percent increase in assets in the last year. TRS held $50.5 billion at the end of May last year and closed fiscal year 2020 with $52.3 billion.

Through March 31 – the end of the January-March quarter for FY 2021 – the TRS portfolio recorded a positive 16.4 percent investment return, net of fees. For the 12-month period that ended in March, TRS performance was a positive 24.3 percent, net of fees.

 In the last five years, the total assets in the TRS portfolio managed by Minority and Women Business Enterprises has creased from $8.2 billion to $14.5 billion. In each of the last five years, TRS has exceeded its annual aspirational goal to have 20 percent of total assets managed by MWBE firms.  Currently, TRS commitments to MWBE firms total $14.5 billion, or 24.3 percent of the System’s total $59.5 billion portfolio.

Director Rupnik holds a bachelor’s degree in economics and a master’s degree in business administration from the University of Illinois at Urbana-Champaign. A native of Springfield, he lives in the Capitol City with his wife Kristen and their two daughters.

 

Re: The Illinois Teachers Retirement System (by Bob Lyons)

“I taught for thirty-two years and took advantage the last year the state offered the five plus five option to retire early. That was in June of 1994; this year, I will have been retired for twenty-seven years.

“In that period covering a year short of sixty years, I have never met anyone who claimed they went into teaching for the pension. While it was just something that happened at the end of our teaching, it has proved to be an outstanding benefit to cap a rewarding career. The only drawback is that our pension system was not drawn up with the aid of normal accounting standards and the help of an actuary.   

“Instead, it was created by politicians and their time horizon was quite different compared to actuarial science. Instead of a goal to achieve full funding in the near future, the politicians from the start were only willing to provide sums small enough to allow them to take advantage of existing revenue for more ‘popular’ projects sure to gain votes. 

“When told that insufficient spending would cost the state more money in the long run, the legislators basically showed they really only cared about the next election. Of course, the lack of money spent early has cost the state much more money later. Now the State of Illinois is painfully learning why credit card companies are so happy to accept only minimum payments from their card holders as the state now finds itself making payments to the fund in the billions to make up for ‘saving’ thousands of dollars earlier. 

“The Illinois Teachers’ Retirement System (TRS) ended its fiscal year on June 30, 2020 with $51.6 billion and was 40.5% funded. In comparison, the State Employees Retirement System (SERS) was 38.7% funded; the State University Retirement System (SURS) was 42.2% funded; the Judicial Retirement System was 39.3% funded, and the General Assembly Retirement Systems (GERS) is only 17.1% funded. The total unfunded liability for the state as of June of last year was $144.3 billion.

“Governor Pritzker’s FY 2022 budget announced last week calls for a total pension contribution from the general revenue fund of $9.4 billion, plus $1.1 billion from other state funds, and $264.8 million specifically earmarked for the Chicago Teachers’ Pension Fund. The state’s payment to TRS alone is $5,693,707,000. Moreover, in the governor’s budget is the full state contribution to TRIP and to our medical insurance of $143,369,000.

“This is significant because in his first two budgets Pritzker had zeroed out that contribution to make it appear that he was ‘saving money.’ Since the General Assembly put it back in when they passed the budget the last two years, the governor has simply accepted reality this year. The Chicago Teachers’ Pension Fund is separate from TRS and, as you may know, is paid for by the city of Chicago. 

“At one time, CTPF was 100 percent funded. The city asked the state if they could skip payments and was given that permission. Between no new payments for a number of years, plus losing money in both the Dot com bust and the Great Recession of 2008, CTFP is now down to a funding of 47.4%. The city is now making its payments plus the state—and out of guilt I would think—also makes a contribution. 

“I have given you this information before, but it is well worth repeating. 

Where Does Your Pension Come From?

Proceeds from Investments 40.30% 

Contribution from Active Teachers 15.75% 

Required payments from School Districts 2.34% 

Contribution from State of Illinois 41.57% 

(Composite of sources of revenue from FY 2001 to FY 2020).

“If we were fully funded, or anywhere close to it, the money from investments would be a much larger percentage and the other three sources would be much smaller. TRS makes money with our investments, but every year it is now required to sell funds that are making a profit in order to provide our pensions. TRS has, on average, made 7.7% annually for the last 30 years and 9.17% annually for the last 40 years.”

-Bob Lyons, former TRS Trustee

A Letter from Bob Lyons Regarding TRS of Illinois

“The TRS Board has asked for a contribution of $5.69 billion from the state for Fiscal Year 2022, an increase of 10.7% over the current year’s $5.14 billion. Our return on our investments was finally calculated for FY 2020 ending on June 30 at 0.55%. Halfway through the fiscal year on December 31 we were up 13.4 %, but the effect of COVID-19 on the market brought us down to just above breakeven.

“The system’s unfunded liability increased by $2.6 billion to a total of $80.7 billion. Total liability – all benefits to all TRS members for all time is calculated to have increased by $4.1 billion to $135.6 billion. We ended the fiscal year with $51.6 billion in assets.

“Despite the growth of the unfunded liability in FY 2020, the funded status of TRS remained relatively stable at 40.5 percent compared to 40.6 percent in FY 2019.

“Since the start of this fiscal year our fund has grown and in mid-October our fund had improved to over $54 billion. The stock market of course has been down with the current increase in COVID cases and hospitalizations. What is important for all of us that are currently retired is we are covered, that there is more than enough money to pay our pensions.

“If the Fair Tax Amendment passes on election day, the state next year will have several billion more in revenue. If Biden is the new president and the Democrats control both houses of Congress, Illinois will get additional help from the Federal Government. If the constitutional amendment does not pass and/or the Democrats are not successful on the federal level, the State of Illinois is going to be looking for new sources of revenue.

“Even with the last year where we barely showed a profit TRS has shown positive returns for every year in the last decade and has a 40-year average of annual returns of nine percent.”

-Bob Lyons, former TRS Trustee

 

TRS paid lawyers six figures to probe brass/ FBI expresses interest by Bruce Rushton, Illinois Times

 

The state pension system for Illinois teachers spent nearly $700,000 on lawyers to investigate two top officials at Teachers' Retirement System, one who was fired in June and the other who resigned in August after being placed on administrative leave.

The figure comes from TRS's response to a Freedom of Information Act request from Illinois Times, which asked for billing records, personnel records and a copy of reports outlining any allegations of wrongdoing by Richard Ingram, former TRS executive director who resigned in August, and Jana Bergschneider, the pension system's chief financial officer, who was terminated by Ingram in July.

The nature of investigations conducted by two Chicago law firms isn't clear. TRS refused to turn over reports on any impropriety, proven or not, by either Bergschneider or Ingram. Bergschneider was hired last month as a fiscal officer by the state appellate defenders office at an annual salary of $120,000, which is $70,000 less than she earned at the teachers' pension system, according to records in the state comptroller's ofice. Reached by Illinois Times, she declined to answer questions about her new position or why she was hired for a state job despite being fired by TRS. Ingram could not be reached for comment.

The FBI has shown an interest in Ingram's departure from TRS. Seven days after his resignation, a Springfield-based special agent asked for a copy of a report on an investigation conducted by the Chicago law firm of King and Spalding, which TRS paid more than $577,000 between March and September to conduct the investigation that resulted in the executive director's resignation. It's not clear whether TRS turned over a report to the FBI. The agent declined comment. TRS in August would not say whether the investigation uncovered evidence of criminal activity, and it remains unclear why Ingram was placed on administrative leave by unanimous vote of the TRS board during a special board meeting convened days before his resignation.

The King and Spalding investigation into Ingram was headed by Zachary Fardon, former U.S. attorney for northern Illinois, who billed TRS $1,116 per hour of his time; Michael Johnston, a fellow partner in the firm, was paid $1,129 per hour. In addition to King and Spalding, TRS paid nearly $114,000 to the Chicago law firm of Elrod Friedman, also between March and September, according to records provided in response to the newspaper's request for bills paid to firms that investigated Ingram and Bergschneider. Ingram approved payments to Elrod Friedman until his departure from TRS, the records show, while King and Spalding sent bills directly to Devon Bruce, TRS board chairman.

In a July 2 letter to Bergschneider, Ingram wrote that she was being fired due to work performance and conduct related to the procurement process for the Gemini Project, a software overhaul aimed at modernizing the agency's pension administration system. The Gemini Project, which last March was expected to go live in January, now is undergoing review, according to a request for proposals issued last month by TRS.

In its request for proposals, TRS asked prospective bidders to evaluate the Gemini Project, which has been under construction for two years, and "conduct a high-level review, assessment and oversight." Bidders were told that the pension system, among other things, wanted to know whether the project was properly planned, whether "rigorous methodology" was followed and whether issues were being addressed in a timely manner.

With $53.4 billion in its investment portfolio, TRS is the state's largest pension system. As of the end of last year, the system was underfunded by 40%, but TRS paints a rosy picture on its website, saying that the pension system expects to break even on the fiscal year that ended June 30 and has a 40-year return of nine percent, higher than the target of seven percent.

Illinois Times

What happened to Dick Ingram, Former Executive Director of the Illinois Teachers' Retirement System

Fred Klonsky's Blog, August 4:

“…Emails to TRS staff informed them that their boss, Richard Ingram, has been forced out as Executive Director of the Illinois Retirement System. Apparently, the board appointed Stan Rupnick as interim Executive Director without benefit of a public meeting.

“Rumors have been circulating all week, according to people I called, that Ingram has resisted efforts by those associated with Governor Pritzker to pick favored investment managers. I am told Ingram wrote out his resignation letter under pressure last week, but the board deferred acting on it until today. I am also told Ingram was offered a deal where if he left he would be fully vested in spite of actually being short of accumulated earned pension time on the job.

“Is it true about Pritzker pressure? Too soon to tell. I reported this morning that Illinois Teacher Retirement System Executive Director had been forced to resign by the TRS board of directors. I also speculated that Governor Pritzker was behind the ouster. I have heard different reasons. I assume it will all come out in the wash.”

Fred Klonsky’s Blog, August 4:

“Former retiree representative on the TRS board, Bob Lyons, comments on the events:

“Fred called me this morning that Dick Ingram had resigned.  And I sent the following out to my unit board: More significantly the word in Springfield was that our Executive Director was ‘forced’ to resign, and that the pressure came from the Pritzker appointed members of the board.  I talked to Dick Strand at the start of last week and also to our state president, John Flaherty, and they both said the appointed board members wanted to bring certain investment opportunities to the board and that Dick and our CIO, Stan Rupnik, were uninterested.

“I was on the committee that selected Dick Ingram almost ten years ago.  We offered him the job in December, 2010 and we told him that he could sign the contract in time to be a Tier One employee.  He said, ‘No, I will sign it on January 1, which will make me the very first Tier Two in Illinois.’ I told him, ‘No one was going to put up a statue for your sacrifice’ and they haven’t.  It takes ten years to be vested for your pension under Tier Two, but I talked to David Urbanek and he said that he thought that Dick had ‘bought some time’ and that he was vested.

“I have calls out to a couple of board members to see what I can learn and also to remind them of the ‘bad old days of Stuart Levine and Rod Blagojevich.’  Stan Rupnik is the acting director. Fred Klonsky has the story out and said that Rupnik was made director without a board meeting, but it is actually we made it part of Stan’s contract that he would automatically become acting director if Dick would leave. There are no secrets in Springfield, so I am sure the store will be out in a short time.  

“Well, I called Larry Pfeiffer, one of the two trustee annuitants on the TRS Board, and he shared with me first that there had been a three-hour executive meeting during the board meeting. He said at the end of that meeting the TRS Board voted to put Director Ingram on ‘administrative leave.’  I asked if he could share with me the issue, he said no that it was covered by the law and board policy that nothing can be disclosed. Then I asked him about disagreement on investment policy.  He said there was a division with some board members advocating index funds.  I personally cannot see that as an issue in Ingram being put on leave. Dick turned in his resignation today and somehow or another he was vested though he is six months short of year on the job.”

“But those of us who remember the bad old days of Stuart Levine and Blagojevich know what is possible.” https://preaprez.wordpress.com/

Crain’s Business, August 6:

“An investigation by led by former U.S. Attorney Zachary Fardon has led to the ouster of the head of the state’s largest government pension plan. The huge Illinois Teachers' Retirement System confirmed this afternoon that Executive Director Richard Ingram resigned after the board received results of a review into 'performance-based issues' from Chicago law firm King & Spalding, where Fardon is now a partner in the firm's government investigations practice.

“TRS spokesman Dave Urbanek said the probe was headed by Fardon and results were presented to the board late last week. TRS earlier today had announced that Ingram resigned on Aug. 3, three days after the TRS board placed him on administrative leave ‘due to performance issues covered by his employment contact.’

“Urbanek said he did not know whether the investigation presentation was oral or written, or whether it has been completed. And he said he is not authorized to say whether the review involved any possible financial impropriety or alleged failures of leadership. Ingram has not been available for comment.

“A TRS statement said the vote to place Ingram on leave was unanimous, and TRS Chief Investment Officer Stan Rupnik will take over as interim executive director. TRS covers pensions for 124,000 working and retired public grade and high school teachers in Illinois, including all districts except Chicago Public Schools. 

“According to the agency’s last annual financial report, it concluded fiscal 2019 on June 30, 2019, with $53.3 billion in assets but $134.4 billion liabilities, leaving it with a funded ratio of just 40.6 percent. In a preface to the report, Ingram openly discussed the possibility that TRS could go ‘insolvent,’ a development he blamed on consistent underfunding by state government. The same report, however, disclosed TRS’ return on assets in fiscal 2019 plummeted from $4 billion to $2.6 billion.

“Gov. J.B. Pritzker's office has not commented, but sources familiar with TRS [state] there were disputes over investment philosophy and how low to set the fund’s assumed rate of return. Setting that figure lower would force the state to contribute more each year now, something that would pull money from other, arguably more politically popular funding programs. Pritzker has appointed a majority of TRS’ current 15-member board.”

A Statement from the ITRS Board of trustees, August 6:

“On July 31, the ITRS Board unanimously voted to place Executive Director Richard Ingram on administrative leave due to performance issues covered by his employment contract. On August 3, Mr. Ingram resigned from his position, effective immediately.

“Stan Rupnik, chief investment officer of ITRS, has been named interim executive director to manage the day-to-day affairs of ITRS. The Board will conduct a thoughtful, thorough and vigorous national search process for a new executive director, consistent with the best interests of ITRS and its important constituents.”

As We Near the End of Fiscal Year 2020 for the Teachers’ Retirement System of Illinois by Bob Lyons

“Our pension system received a total state pension contribution of $4.81 billion for this current fiscal year, which is certainly a lot of money. Even more significant is that it is not a number that was arrived at by using what is called standard actuarial accounting.

“The contribution that we receive is based on state law, Illinois state law. Illinois state law dictates that pension contributions are to be calculated on a fifty-year timetable that began in 1995, not the thirty-year time table that almost every other pension system uses.

“State law also established a 90 percent funding target instead of the standard 100 percent goal that practically all other pension systems dictate. And lastly, Illinois requires the debt payments on state pension bonds to be deducted from future state contributions. That means, the billions borrowed by Governors Blagojevich and Quinn are repaid by money that should have been received by the TRS pension fund.

“As a result, the contribution of $5.14 billion which is what the Illinois Teachers’ Retirement System will receive for FY 2021 is not the amount that an actuarial standard study would call for, nor does it equal what the pension system is expected to spend in the year ahead. It does not in any way reduce the existing unfunded pension liability that is currently $78.2 billion. It will of course add to it.

“An actuary using standard accounting practice would call for a contribution $3.2 billion higher than $5.14 billion, a required contribution of $8.34 billion. And if the State of Illinois took ‘the long view’ and wanted to save money in the long run, that is what they would pay.

“But they certainly could not pay that amount because they do not have the $8.34 billion. If truth be told, they do not have the $5.14 billion. The only way they will come up with the ‘by-law contribution’ will be by borrowing a goodly portion of it.

“A loan that will be paid for from future contributions. There is an old adage that goes, ‘If you find yourself in hole, the very first thing you should do is stop digging.’ Sadly, when you have been digging the hole for 81 years that is all that you know.

“The Illinois Senate Bill 264 FY 21 appropriations budget passed both houses of the General Assembly this past weekend. Every Democrat attending the session voted yes and every Republican voted no. 

“The general revenue spending called for in the FY 2021 is a record $42.9 billion and has $8.6 billion in pension contributions to the three pension boards and the five separate pension funds with an additional $1.3 billion for retiree health costs and a $800 million payment for past pension bonds. As has been reported, the full state payment for TRIP/TRAIL is in the new budget” -Bob Lyons, former TRS Trustee and retired teacher