Head Of State's Largest Pension System Resigns After Being Put On Leave

From The Center Square:

By Brett Rowland

The head of the state's largest pension system resigned this week after being put on leave for performance reasons at the end of July.

The Teachers' Retirement System of the State of Illinois Board voted unanimously to put Executive Director Richard Ingram on administration leave on July 31 "due to performance issues covered by his employment contract," according to a statement released by the board on Thursday.

Ingram resigned on Monday.

The board named Stan Rupnik, the system's chief investment officer, interim executive director. The board said it would start a national search to permanently replace Ingram.

The pension system oversees $51.2 billion in assets for teachers, administrators and other school personnel employed outside of Chicago. It is the state's largest pension system and the 37th largest pension system in the nation.

Ingram, who was paid $303,000 per year, wrote in the June 2019 annual report that the system faced challenges because lawmakers had not fully funded the public system once since 1939.

"The system continues to be buffeted by funding and policy uncertainties within state government that raise the possibility of future insolvency," he wrote in the report.

That fiscal year, the system had a funded ratio of 40.6 percent, which Ingram noted was "one of the lowest in the nation for a retirement system its size."

"The System had an actuarial value of assets of $53 billion and a long-term benefit obligation of $131 billion, which creates an unfunded liability of $78 billion," Ingram wrote.

He said the primary issue was underfunding.

"Since 1939, Illinois officials have never, in any year, appropriated enough money to 'fully fund' the pension promises to be paid by TRS, as determined by the System’s actuaries," he wrote. "This annual underfunding of TRS and the state’s other public pension systems is, sadly, codified in state law. The statutory formula used to develop state government’s annual contribution to its pension systems artificially lowers the state’s cost of funding pensions."

The 2019 report also reported the system's return on assets for that fiscal year fell to $2.6 billion from $4 billion the previous year.

Ingram did not respond to a request for comment.

The focus of the work of The Center Square Illinois is state- and local-level government and economic reporting that approaches stories with a taxpayer sensibility. For more stories from The Center Square, visit TheCenterSquare.com.