This summer, PAG has been actively engaging with key
legislators to address the issue of Tier 2 pensions. Our most recent meeting
was held on September 3, 2024, with Senator Martwick and Representative
LaPointe. During the meeting, we presented factual information, shared
testimonies, and discussed the necessary steps to rectify past mistakes and
ensure a fair and comprehensive pension system with Tier 1 benefits for all
employees. We believe that this approach is both moral and just, especially for
the vital workers who shape our youth and deserve a dignified and equitable
retirement.
Three Pension Advocacy Group (PAG) members who were present
for this discussion included Faith Marie Ruiz, Ray Wohl, and Javier Pagon. These
amazing educators motivated me to create a new logo for PAG.
As I reflected on how to express gratitude to these wonderful
individuals and others who have been working tirelessly behind the scenes, I
realized that all the educators on the screen shared a common trait - we are
all entrepreneurs currently running either a nonprofit or for-profit
organization.
Ray Wohl, PAG board member, and retired CPS teacher, is the founder and Business Director of Chicago Male Clinic a holistic approach to male health. https://chicagomaleclinic.com/
Faith Marie Ruiz PAG board member, and retired CPS teacher, and president of Boundaries Publisher. Currently still working with children, women, and older persons. Mari is a children’s book author. Her first, WHAT WELA LEFT ME. https://www.amazon.com/What-Wela-Left-faith-marie/dp/B0C9GH5JY5
Javier Pagán is a member of PAG and an active high school music teacher. He is truly a force for good. In addition to helping his students, he has started a nonprofit to help teachers overcome the increasingly complex challenges of being an educator. https://www.humanvaluescollective.org/
Tina Padilla is a retired CPS educator and founding member of PAG. She is currently the representative of the Pension Advocacy Group. (The website has not been launched yet)
We all agree that Tier 2 is detrimental to Illinois and our
community because it fails to provide a dignified and secure retirement. It
creates division and an unfair work environment and diminishes services and
economic impact on Illinois. We are determined to rectify our Defined Benefit
Pension system for all.
Chair, Lois Nelson Members: There was a Claims and
Service Credits Committee Meeting of the Public School Teachers' Pension and
Retirement Fund of Chicago, 425 South Financial Place, Suite 1500, Board Room,
Chicago, Illinois, Hybrid (In-Person and Via Zoom) on Wednesday, April 24, 2024
at 9:30 A.M.
The meeting was scheduled to start at 9:30 am. It
started well after.
1.1. Public
Participation: There was no public participation.
2.2.Roll Call:
Committee Members: Lois
Nelson (Chair), Maria Rodriguez, Paula S. Barajas, Victor Ochoa, and Quentin S.
Washington. All in attendance
Representing Active
Members: Paula S. Barajas, Jeffery Blackwell, Victor Ochoa, (In
person), Tammie F. Vinson, Quentin S. Washington (remotely)
Representing Retired
Members: Lois Nelson, Maria J. Rodriguez, and (attended in
person) Mary Sharon Reilly ( remotely)
Representing Principal: Vacant,
No representation
Representing the Board of
Education: Tanya D. Woods (attended remotely), 2nd Member
Vacant, No representation.
3.3.Approval
of Trustee Remote Attendance: Quentin S. Washington,
4. 4. Approval
of Minutes: Return to Work Committee Minutes for
April 11, 2023, Yes 4, No 0, Abstain
1
April 13, 2023, Yes Unanimous
April 25, 2023, Yes Unanimous
April 27, 2023, Yes Unanimous
Trustee Maria Rodriguez and Trustee
Lois Nelson inquired about not having a meeting of the committee for almost a
year. It was stated that the Return-to-Work herring process has changed. It is
no longer in close session.
5. 5. Return
to Work Hearing regarding Elizabeth Chambers who attended remotely.
During the hearing, the attorney
representing the Chicago Teachers' Pension Fund (CTPF), Mr. Ruffing, gave his
opening statements. It was noted that Ms. Chabers had gone over the 140
return-to-work limit. Mr. Ruffing stated that the burden of proof lies on the
members. He called his first witness, Ms. Jo Campbell, who is the pensions and
refunds department manager, and has been a CTPF employee for nine years. He
also presented ten exhibits, which included two forms of data from CPS, a
letter sent to Ms. Chabers from the Fund about her exceeding the work limits,
Form 761 Financial Hardship Request, Form 940 Assignment of Death Benefit,
Notice of Administration Hering, and the Pension Fall 2022 newsletter.
During the meeting, Ms. Chambers
reported that she had submitted several historical payroll corrections. Two of
them have already been submitted to the board, and she is currently processing
the final one. Trustee Lois Nelson clarified that all Guest Teachers, also
known as Substitute Teachers, receive two professional development sessions
that do not count toward the 140 limit. The matter was left open as the CTPF
staff needed to verify other outstanding documentation. Trustee Ochoa and
Trustee Washington commented on the process and recommended that CTPF take more
proactive action to mitigate such scenarios in the future.
6.6. The
meeting was adjourned at approximately 11:30 am
A Copy of the policy, bylaws, or rules that govern The Claims and Service Credits Committee, was requested on April 24, 2024, under the Illinois Freedom of Information Act (“FOIA”), 5ILCS 140/1 et seq. The FOIA was granted on May 1, 2024. I have included CTPF's reply and links.
If you believe anything in these notes is inaccurate, please email us at PensionAdvocacyGroup@gmail.com with "Correction Request" in the subject line. Thank you
Dear Ernestina Padilla,
Thank you for writing to the Chicago Teachers’ Pension Fund (“CTPF” or “Fund”) with your request for information pursuant to the Illinois Freedom of Information Act (“FOIA”), 5ILCS 140/1 et seq.
On April 24, 2024, you requested the following information:
A copy of the policy, bylaws, or rules that govern The Claims and Service Credits Committee, under the Illinois Freedom of Information Act (“FOIA”), 5ILCS 140/1 et seq.
Your request is granted. CTPF’s Bylaws and Return to Work Policy can be found on the Funds website. FOIA allows a public body to refer a requester to the public body’s website if the requested records are provided on the public body’s website. The records requested can be found at https://www.ctpf.org/post/administrative-rules-and-policies . For future requests for the above information, please see the CTPF website.
An investigation,
audit, or review is performed to confirm facts or details of a matter under
consideration. In the financial world, due diligence requires an examination of
financial records before entering into a proposed transaction with another party.
Due diligence is a systematic way to
analyze and mitigate risk from a business or investment decision. (Investopedia)
April 5, 2024, First Friday Managers and Investment Due
Diligence Meeting (Agenda)
The meeting started after 9:30 am.
1.1. Participation, Michael
Angulo, Jonathan Perez, and Filez Venegas with United HERE Local 1, returned to
provide an update on their dispute with Hotel Figueroa in Los Angeles. He
stated that their fight for justice continues, and he is back to ask again for
a letter from the Board of Trustees of Chicago Teachers’ Pension Fund to BGO (Greenoaks
Trade name). They ask that the Trustee join U.S. Senator Bernie Sanders and
other labor advocates, to end the labor dispute at the hotel and justice for
the 100 fired workers. CTPF is invested with Green Oak Real Estate Three, “ IRR
of 0.17% underperforming the benchmark of peer funds by 10.15%,” ( 3.05 minutes
into the video), Michael Angulo stated.
2.Roll
Call
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(Present), Maria J. Rodriguez (Not in attendance)
Mary Sharon Reilly (Attended virtually)
Representing Principal: Vacant,
No representation
Representing the Board of
Education: Tanya D. Woods (Attended remotely), 2nd Member
Vacant, No representation.
3.Approve
Remote trustee Attendance and full Participation. Vote Yes, Unanimous
5.4. First
Friday Presentations, (This committee grew out of the need
of smaller managers and MWDBE managers who are not part of the big consultants'
pipeline to get an opportunity to share new ideas and investment opportunities
with the Chicago Teachers' Pension Fund (CTPF).)
The fund's Chief Investment Officer,
Fernando Vinzons, joined the meeting remotely and greeted the trustees. He
mentioned that four Chicago-based firms were invited to present before them.
Three of these firms were already managing assets for CTPF under several asset
classes, and three of them were in the market with their latest fund offering.
Mr. Vinzons said they were interested in hearing what opportunities these firms
saw. He also stated that the managers presenting today were diverse in asset
class and ownership. The purpose of inviting Attucks was to have them provide
an update on the firm, review the portfolio, and shed any insight on what
management plans they have given recent personnel turnover. The meeting was
then handed over to Mr. Binsfeld (investment staff), who introduced the
trustees and managers before hearing their presentations.
$4.2 Billion in Assets Under
Management (AUM), diversified 56% in Equity and 44% in Fixed Income.
Attucks currently manages
$742 million in our customized “Multi-asset strategies” portfolios. Since its inception,
on December 1, 2013, the Attucks “Best-in-Class” Portfolio has exceeded its
benchmark by 25 bps or .25% gross of fees, on an annualized basis for over 10 years as
of February 29, 2024. While recent markets disconnected from fundamentals,
narrow leadership, and narrative-driven markets the past couple of years have
depressed longer-term returns to be behind the benchmark net of fees by 0.39%
since inception, the portfolio is quickly making up the ground as fundamentals
come back into focus and the market breadth continues to expand.
On the January 31, 2024, Board
of Trustees’ Investment Summary Report, no information on Attucks was found.
Provided is the information ending November 30, 2023.
The trustee asked the
Attacks team many questions about affordable housing during the meeting, around
the 54:57-minute mark.
After a brief
intermission, the trustee returned to the meeting. Mr. Vinzons introduced JLC
as an infrastructure entity owned by Loop Capital and Magic Johnson Enterprises
and he said,” CTPF is invested in their Maiden fund, JLC fund 1 and are actively
fundraising for fund 2”.
Founded in 2015, JLC
Infrastructure is an independent investment manager based in Chicago targeting
investment opportunities in the transportation, energy, communications and
social infrastructure sectors in the United States. As of 12/31/23, the firm has
~$1.6Bn in AUM, with over $450MM raised thus far for Fund 2 (towards a targeted
fund size of $750MM). Fund 1 gross and net performance has exceeded Fund 1
targeted returns of 12-15% Gross and 10-12% Net. JLC Infrastructure is a 100%
minority-controlled firm.
Third presentationMuller
& Monroe are not currently managing money for CTPF. However, CTPF was
one of their three original clients in 2004.
Muller & Monroe Asset Management
(“M2”) is a Chicago-based minority-owned private equity fund-of-funds manager
with $1.4B in assets under management. M2 targets private equity funds
investing in the lower middle market, including diverse and emerging managers. They
invest in buyouts, growth equity, and special situation funds. Through
commingled funds and separate accounts, they manage money for an august group
of sophisticated investors. They currently manage 11 pools of capital 9 of 11
outperforming the Russell 3000, 1 investment is too early to evaluate and 1 is
underperforming. 7 of the pools of investment exceed the benchmark by 6.50% and 3 pools of investment exceed the benchmark
by 10%.
Newport's investment strategy invests
in neighborhood retail centers, located in densely populated submarkets, targeting
necessity-based, non-cyclical tenants. Focus on Middle Market investments
($5-$20 million equity in primary/secondary markets allows LPs to benefit from
pricing inefficiencies. The Firm’s extensive experience as an investor operator
drives its mission to proactively manage tenancy and increase property net
operating income (“NOI”). Their passion is revitalizing neighborhood centers
with tenants that serve community needs while generating attractive racist-adjusted
returns for its investors.
6.5. Adjournment
at approximately 1:00 pm.
If you believe anything in these notes is inaccurate, please email us at PensionAdvocacyGroup@gmail.com with "Correction Request" in the subject line. Thank you
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.
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.505Meetings 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 BOARDCHAPTER A: BYLAWS
II.A.504Investment 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:
On January 18, 2024, during the CTPF Board of Trustees
Meeting, investment decisions were being made in the executive session. The
Pension Advocacy Group raised concerns about this and filed several Freedom of
Information Act (FOIA) requests. The story starts with the FOIA request that
was made on January 18, 2024.
FOIA
2024-012 –
1. The CTPF investment staff's due diligence write-ups on Farol Fund II.
2. The presentations of International Value (ACEI ex-US) investment managers'
Services, #6 B of the agenda [there is a typo ACEI ex-US should be ACWI wx Us]
After waiting the appropriate time as required by law, I followed
up with an email regarding my FOIA request. CTPF staff responded with an email:
On Wed, Jan 31, 2024 at 4:35 PM Sandy McNamara <mcnamaras@ctpf.org>
wrote:
Hello Ms. Padilla,
After your email inquiring about your FOIA request from January
18, 2024, we followed up with the Funds Communication Team. They were able to
look into this and did find two FOIAs submitted by you on January 18, 2024.
We apologize but these request never made it to us. We are
working with the vendor to resolve this issue.
FOIA 2024-012 –
1. The CTPF investment staff's due diligence write-ups on Farol Fund II.
2. The presentations of International Value (ACEI ex-US) investment managers'
Services, #6 B of the agenda
Thank you
FOIA 2024-014-
I am requesting CTPF staff due diligence write-up on Farol Fund
III.
We are working on gathering these materials. Please expect
a response by February 7, 2024.
We appreciate your patience.
Thank you,
On February 8, 2024, I received a denial
letter from CTPF Daniel Hurtado Chief Legal Officer.
This denial and the upcoming Investment
Committee Meeting raise more questions and concerns. For example, why are
investment committee materials being discussed in the executive session? Is it
because all board meeting recordings can now be accessed on the CTPF website?
Or is it because they will be investing our hard-earned retirement savings with
Public Equity managers who have not acted in the best interest of Defined
Benefit plans or teachers?
Please help protect and grow the
"Gold Standard of Retirement Security" by sending an email to the
Chair of the Investment Committee, Trustee Jacquelyn Price-Ward at
WardJ@ctpf.org, and copying all trustees.
Everybody has to be somewhere, if possible, please be
at the February 27, 2024 CTPF investment committee meeting. If you choose to
attend in-person or online you may register at https://www.ctpf.org/event/investment-committee-meeting-22
Director Carlton W. Lenoir Sr.’s reply, led to more unanswered
questions, that I will present inanother episode. For this podcast, I
would like to shed some light on the fiduciaries who allowed this scandalous
event to happen. Then end with actions that will help hold our fiduciaries accountable and end Tier 2 once and for all.
The first paragraph of the Executive Director’s reply states, “CPS asked
us to include their supplemental savings vendor in the upcoming Tier 2 webinar”. My understanding is that the CTPF Board of
Trustees governs our pensions, NOT CPS. In addition, during the webinar, Kristina Betke, member service representative and pension counselor
said, “I’d like to thank Jack Silver for this important collaboration as well
as the representative that we have here from Corebridge Financial David
Oulvey.” Jack Silver is the Chair of
CTU’s Pension-Insurance
Committee. David Oulvey per his linkedIn profile is District Vice President at
VALIC Financial Advisors, Inc.
Second, why would we “hand-off” anything to (what all fiduciaries should
know to be) the industry that has replaced many Defined Benefit pension
plans? As we researched the history of
403(b) and the like, we found that, over time, through regulation changes
and plan design mandates,
the three predominant types of defined contribution retirement plans: 403(b),
401(k), and 457(b) have grown more similar.
Third, if our Executive Director Carlton W. Lenoir Sr. is promoting “three-legged
stool” marketing scheme, then he is doing a great injustice to our
members. Most working Americans are far
behind in saving for retirement, not only in their supplemental plans but in
terms of their total
assets. We also know teachers have been negotiating to reinstate extended pay,
so they are not struggling over the summer months.
Our responsibility and loyalty are to the members. We must ensure that
all contributors can, if they choose, live on the income they have saved for,
and guaranteed when they retire in this Defined
Benefit plan. Let’s NOT follow what private companies have done with the profit
and nest eggs of hard-working Americans.
Actions: Attend the January 31,2024 Town Hall Meeting. Bring your questions and suggestions on how we can collaborate to end Tier 2.
Thank you for listening. Look for more news and activity from the Pension Advocacy Group on Facebook using PensionAdvocacyGroup@gmail.com, and on X (formerly known as Twitter).
This is Tina Padilla – until next time. Ciao, Ciao for now!
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