March 21, 2024 CTPF Board of Trustee Meeting

March 21, 2024 CTPF Board of Trustee Meeting  

The meeting started at 9:41 am. 

Trustees in attendance: 

Representing Active Members: Paula S. Barajas, Jeffery Blackwell, Victor Ochoa, Jacquelyn Price Ward, Tammie F. Vinson, Quentin S. Washington  ( All in attendance)

Representing Retired Members: Lois Nelson, Mary Sharon Reilly, Maria J. Rodriguez (All in attendance)

Representing Principal: Vacant, No representation

Representing the Board of Education: Tanya D. Woods (not in attendance), 2nd Member Vacant, No representation

During the public participation, only one speaker, a member of the Pension Advocacy Group named Tina Padilla, reminded the Board of Trustees about the importance of the Freedom of Information Act (FOIA) in keeping members and citizens informed about the government's operations and retirement savings. She raised a question about the recent move of hearing managers' presentations, consultant's analysis of managers, and frank discussions behind closed doors, which obstructs members from accessing vital public information.

Trustee Maria Rodriguez asked about the question raised by the public. The Executive Director informed the attendees that he had sent an email regarding the matter. Trustee Rodriguez then requested that the executive session be postponed to a later time in the meeting. The Recording Secretary, Trustee Nelson, clarified that she was not involved in the decision-making process regarding this change. The Executive Director, Mr. Lenoir, confirmed that he was responsible for making the changes to the executive session schedule.

Trustees went into executive session at approximately 9:52. The Board came back into open session after lunch at approximately 1:30 pm., after roll call the voting agenda was motioned and moved. (see Agenda #8A - #8L )Agenda

The frank and honest discussion was backed with facts around the motion to Approve a Recommendation to Invest $10 million with KKR Ascendant Fund. Trustees voted No to the recommendation with 7 No to 2 Yes. 

The Proposed Motion to Approve Investment Committee Recommendation to  Invest $30 Million with Heltman Value Partners Fund VI Trustees voted Yes to the recommendation with 1 No to 8 Yes. 

#9 of the agenda, Report of the President's Report, Trustee Blackwell appointed Trustees Vinson, Baraja, and Price Ward to the committee that will recommend the representative of the Principals/Administrators.  Vacancy information will be posted on the CTPF website. Applications from interested individuals are due to the fund by April 19, 2024. This committee will meet on Friday, May 3rd to review the application and make a recommendation to the Board.

#10 A - #10D Items moved to the Omnibus included Report of  the Committee on Claims and Service Credits, Report of Committee on Investments, Report of the Committee on Finance and Report of the Financial Secretary.  Omnibus was acepted  Yes 8 No 1. 

#11 Report of the Committee on Pension Laws and Administrative Rules. 11A Report of the Lobbyists James Clayborne,m Clayborne and Wagner, LLP . Director Lenior read the lobbyist report he received by email. (see Agenda #11A )Agenda

#12 Report of the Committee on Investments, Callan's consultants reviewed Fund performance his closing thoughts, while 2023 defied most expectations with inflation moderating and the economy displaying resilience, 2024 is not without challenges. Never-ending geopolitical worries and another looming government shutdown may cast shadows on the economic picture. The lagged effect of higher interest rates poses an unknown threat to the outlook, and premature Fed rate cuts could re-ignite inflation. It seems unlikely that the returns experienced in 2023 will be repeated though it is important to recognize that those results were unexpected by most. Callan continues to recommend a disciplined investment process that includes a well-defined long-term asset-allocation policy.

#13 Report of the Executive Director 

Health Insurance and Premium Rebate update

 # 15 New Business 

Trustee Barajas will be speaking at the Labor Notes Conference in April 20, 2024.

Trustee Rodriguez requested independent counsel due to mismanagement concerns about the fund and threats she has received. 

 Meeting Adjournment 

Hey there! Just wanted to remind you about something important that happened on February 27th, 2024. The Due Diligence process went behind closed doors. Isn't that intriguing? I'm curious about what might have happened during that time. Do you have any idea?

 

The meeting began at approximately 9:50 am with public participation.

The trustees present are Jeffery Blackwell, Jacquelyn Price-Ward, Mary Sharon Reilly, Lois Nelson, Paula S. Barajas, Victor Ochoa, Tammie F. Vinson, Quentin S. Washington, Maria Rodriquez, and Tanya D. Woods.

Members of the Hospitality Workers Union, United Here Local 11 from Southern California presented their request to the Board. They asked that the Board send a letter in support of their labor demands. To hear public comments from the Hospitality staff and organizers urging Chicago Teachers’ Pension Fund’s Trustees to help them in their fight for better working conditions, watch the first 3 minutes from the start of the meeting.

Members of the Pension Advocacy Group spoke second. They are requesting that the Board restore the Communication Committee and that the trustees be at the helm of communication. Their concern is that not enough is being done to promote Define Benefits for all members. To hear public comments from the PAG organizers who spoke about their fight for better communication conditions, watch the video from about 6 minutes into the meeting.

Trustees moved into executive session approximately 40 minutes into the start of the meeting which lasted approximately over 1.5 hours. This action has raised concerns among members of the Pension Advocacy Group, who feel that the due diligence of investment managers by trustees should be conducted in an open, transparent, and accessible public meeting.

The purpose of going into executive session was stated to be, Section 2(c)(7) of the Open Meetings Act.

(7) The sale or purchase of securities, investments,

or investment contracts. This exception shall not apply to the investment of assets or income of funds deposited into the Illinois Prepaid Tuition Trust Fund.

 

This is not applicable.

The gradual erosion of trustee power has been witnessed, as the due diligence process moved from being held during the public monthly Board of Trustee meetings to Investment committee meetings, First Friday meetings, and now behind closed doors. The first time the trustees took investment due diligence behind closed doors occurred on January 18, 2024, at the Board of Trustee monthly meeting.

The Pension Advocacy Group needs to see evidence that investment managers are engaged in a fair and open process for the coveted position of managing the hard-earned retirement money of the members of CTPF. They want to hear questions from trustees, consultants, and investment staff, Allow the members and watchdog groups analyze the data presented and conclude whether members are being served by the best of the best teams. Investment Managers’ performance formal reviews by the Board are in our Statute, Bylaws, and Policy. See below:

II.A.505  Meetings Open to Public.  Board meetings and Committee meetings shall be open to the public in accordance with the Open Meetings Act. Pursuant to section 5 ILCS 120/1.05 of the Illinois Open Meetings Act, the Chief Legal Officer is designated as the Board’s Open Meetings Act designee.

TITLE II: PENSION BOARD  CHAPTER A: BYLAWS

II.A.504  Investment Manager Due Diligence Meetings. The Investment Committee will conduct due diligence meetings for every investment manager approximately every 24 months to be scheduled for Investment Committee meetings or for First Friday meetings in February, May, and November. Additional First Friday meetings may also be used for due diligence reviews. Upon approval by the Board of Trustees at a Regular Board meeting, due diligence presentations may also be scheduled for a later Regular Board meeting. The Board of Trustees will review investment managers on a watch list during the Investment Committee portion of a regular Board meeting. (This language was added after the recommendation of the CTPF’s Chief Investment officer and other Board advisors)

Investment Policy Statement

Section I. Purpose

Due diligence and monitoring of the investment managers are critical elements integral to safeguarding the Fund’s assets.

Section II: Roles and Responsibilities 

The Board recognizes that even though the Fund’s investments are subject to short-term volatility, the Board intends to maintain a long-term investment focus. This prevents ad-hoc revisions to the Fund’s investment philosophy and policies in reaction to either speculation or short-term market fluctuations. In order to preserve this long-term view, the Board has adopted the following formal review schedule: