Here’s a bit of interesting news. The head of the Teachers Retirement System, Illinois’s largest public employee pension fund, has resigned. Crain’s Chicago Business reports:
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.
Should the fund become insolvent, the teachers should not concern themselves. One way or another the state is on the hook for the pensions. The ones who should be worried are Illinois residents.
Illinois’s public pensions have many, many problems. For years the state deferred its notionally mandated payments into these funds. That creates a hole hard to dig out of. Poor returns on investments are just the icing on the cake.
In the particular case of the TRS its structure, in which the individual districts set pay rates while the state is on the hook for the pensions, creates some very perverse incentives. But, as I say, it’s not the teachers’ worry—it’s the taxpayers’.
For the record, Mr. Ingram’s pay as head of the TRS was $300,000 per year for which he is eligible for a $225,000 per year pension. The taxpayers are on the hook for that, too. Sweet gig.