Public pension transparency.
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A brief note that I was moved to watch live on the internet this morning the funeral of Chicago’s amazing Professor Tim Black. As I write this the service ended a short time ago. It was a small gathering for family and close friends. A larger celebration of the life of Tim Black is planned for December at Rockefeller Chapel at the University of Chicago. If you are interested in the story of our heroic local Chicago civil right activist and historian, I recommend the book, Sacred Ground. The Chicago Streets of Timuel Black.
August 2020 was when the bloodless massacre of the leadership at the Illinois Teacher Retirement System took place.
That was when news began to filter out that the executive director, Richard Ingram, of our retirement system had been fired.
Jay Singh, the Chief Information Officer, has been terminated some months earlier.
Other executives were or would soon be gone.
It was all very hush hush.
I was receiving emails from nameless TRS employees who were passing along what was either gossip or facts but I was in no position to know which was which.
Former TRS board member Robert Lyons wrote at the time, “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. “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.”
“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.”
Bob Lyons is right about most things connected to TRS. He was wrong about one thing.
“There are no secrets in Springfield,” Bob wrote. “so I am sure the store will be out in a short time.”
Over a year has gone by and we still don’t know why the TRS executives including Ingram were fired.
It turns out there are plenty of secrets in Springfield and at TRS.
When you keep these things a secret people will assume the worst.
If there is a lack of transparency when it comes to personnel matters, what else don’t we know.
What aren’t we told about investment, returns and fees?
Eward Seidle, writing in Forbes, offers, “Forensic investigations reveal that public pensions in states such as Pennsylvania, California, Tennessee, Rhode Island, North Carolina, and, most recently, Ohio, have long abandoned transparency, choosing instead to collaborate with Wall Street firms to eviscerate state public records laws and avoid accountability to stakeholders. Predictably, billions that could have been used to pay government workers retirement benefits have been squandered.”
The problem is that while public retirees can be worried about the lack of transparency and the secrets of fees and returns, our checks still get deposited in full into our bank accounts each month.
Many figure it is better not to worry.
There is good news on the pension investment front coming out of New York.
New York City is announcing its public pensions are fully divesting out of the fossil fuel industry and into renewables & climate - a massive shift of about $50 billion.
I can’t help but note that while Illinois is wasting time investigating TRS pension investments in Ben and Jerry’s because they pulled their product out of the Israeli occupied West Bank, New York pension governance is trying to save the planet.
Alexandria Ocasio-Cortez tweeted: Pension funds are massive pools of money that fund retirement for teachers, city workers, and other public employees. These funds invest throughout our economy, & the sheer size of pension plans in the US economy ($5.5 trillion) make them powerful.
Adds AOC: That’s where workers come in to spark change. By demanding their retirements be divested of fossil fuels, workers and voters are precipitating large shifts of $ out of big oil, gas,etc. That amps up pressure & leaves companies like Exxon w/ fewer places to get fossil fuel money.
Yet lack of transparency is a roadblock to members of pension systems doing what AOC suggests.
Says Seidle, “Full disclosure of investment information by the pension to the public is necessary for the stakeholders to understand the investment program, as well as evaluate whether pension fiduciaries are prudently performing their duties.”