Pension Fund Turmoil

Chicago Teachers Pension Fund Turmoil Continues

By Jim Vail

CTPF Dir. Mary Cavallaro just quit

The Chicago Teachers Pension Fund problems continue after the executive director Mary Cavallaro suddenly and unexpectedly resigned on January 5.

Her announcement was made just after the fund's trustees voted unanimously to increase her salary. There were two meetings to discuss her compensation and it was decided to increase it so that her pay would equal the previous executive director's salary, resulting in a significant increase.

Why the sudden exit after the interim director was just awarded a hefty raise?

The pension fund's claims and services committees noted in a monthly report that overpayments were made to hundreds of retirees, and some of those included pension payouts to people who had been deceased for a number of years.

During the claims and services committee meeting one trustee noted that Cavallaro was in charge of the benefits department that oversees pension payments made to retirees when the overpayments were being made, according to a source inside the fund. Cavallaro resigned shortly after that meeting.

Mary Cavallaro was named the interim executive director of the CTPF last October after Charles Burbridge also resigned unexpectedly. 

The CTPF will hold its monthly board meeting this Thursday and decide who will be the next interim director.

FundFire, an investment media that covers the fund industry, wrote about the recent resignation with the headline, "Departing Chicago Pension Executive Accuses Trustees of 'Vile Disrespect."

The fund has been rocked lately amidst charges of racism and whistle blower complaints between the fund's employees and trustees. CTPF President Jeffery Blackwell called it a 'cabal of evil' prompting Mayor Lori Lightfoot to express concern. 

There are six teachers, three retired teachers, one principal and two CPS board trustees who sit on the fund's board of directors that manages roughly $11 billion in teachers' retirement money.

Jeffery Blackwell told Second City Teachers that the problems at the fund centered on two trustees - Tina Padilla and Maria Rodriguez - who he said constantly disrupt the board meetings and antagonize staff members.

Insiders note that Padilla was battling Blackwell to be president of the fund, while Rodriguez disputed Blackwell's accusations by stating she cannot interupt the meetings since it is the president who controls the mics. 

Blackwell replaced Padilla with Phil Weiss, who upset the union's ruling party Core in the November pension fund election, to head the investments committee.

The CTPF Board of Trustees had voted unanimously to name Mary Cavallaro  the Interim Executive Director of the CTPF as part of a plan to seek a permanent successor through a national search after Burbridge left in October last year. Burbridge, who battled Tina Padilla and was forced to issue an official apology based on a prior altercation that was not detailed in the board's minutes, was charged with fostering a polarized fund where many employees have left due to a toxic work environment that has permeated the board of directors.

Cavallaro joined the fund in 2009 and served as the deputy executive director since 2017, where according to the fund's website, she worked with trustees to establish operational priorities and short and long-range plans for the organization. She had earlier served as the chief benefits officer (CBO) and the health benefits manager. That was the time overpayments were being made by the fund.

Cavallaro was named by Crain's Chicago Business as the 2020 Notable Woman Executive Over 50. Crain's has written about the teachers pension fund's connection to former Illinois House Speaker Mike Madigan. Blackwell claimed trustees were demanding the fund hire former Madigan staff members.

"Mary is a respected leader who has earned the trust of the Board of Trustees, members, partners and staff," stated Blackwell at the time she was named the acting director last October. "Mary has a track record of success in every role she has filled at the Fund. We are confident that her leadership skills, institutional knowledge, operational expertise, and collaborative style will serve the Fund well as we begin the search for a permanent Executive Director.

Blackwell told Second City Teachers he will comment on Cavallaro's sudden resignation after Thursday's board meeting. 

Blackwell may be interested in becoming the new interim director. Former CTPF President Jay Rehak, who was first elected to the fund's board of trustees on the Core ticket like Blackwell, became the fund's interim executive director for a brief stint and lobbied hard to be the permanent director. However, another similar scandal hit Rehak's short reign when pensioners were not receiving their checks for the first time in over 100 years.

Burbridge was then hired in 2015, and the pension fund's internal woes and toxic culture slowly took root.