CTU Pension

CTU Pension Fund Forum Highlights CTPF Successes & Challenges

By Jim Vail

CTPF Trustee Jaqueline Price-Ward

The Chicago Teachers Union hosted an online forum entitled 'Making pension funds work for educators and communities' on August 11 that touted the Chicago Teachers Pension Fund's success with hiring minorities and divesting in hedge funds.

The virtual workshop discussed how pension funds are invested in companies that destroy the environment and harm communities.

"Public pensions are the biggest investors in fossil fuels," said Elizabeth Parisian, a pension specialist for the American Federation of Teachers.

The panelists included AFT's Parisian, CTPF Trustee Jaqueline Price-Ward, and former CTPF President Jay Rehak.

Hedge funds are run by Wall Street billionaires and are known to charge excessive fees. The CTPF was the first public pension fund to stop investing with hedge funds. However, why is the CTPF investing in KKR, a notorious private equity fund that organized a buyout of RJR Nabisco that resulted in thousands of layoffs and disrupted lives. 

The panelists said the CTPF has only invested $23 million in KKR, which is considered a small amount in the $13 billion pension fund's portfolio. If teachers and other stakeholders in CTPF do not like certain companies, they need to express their opposition and put pressure on the fund to divest.

"Trustees can only invest in what is being offered to us by our consultants and staff," Price-Ward said.

Former President Jay Rehak said the CTPF is the second oldest pension fund in the country and is one of the only funds run by teachers. He noted that the fund is a national leader in diversity, earned a whopping 28% return this year and were the first to stop investing in private prisons.

"We have a lot of power," Rehak said. "We act and a lot of people follow."

He said it is important to let their consultants and investment managers know what are the fund's priorities. They decided to divest from gun manufacturers despite earning a 29% return, and Navient, a rapacious student loan operator.

"I'd rather invest with people who aren't trying to kill us," Rehak said.

Rehak said the CTPF has invested in one company where they discovered the workers were on strike, and once they voiced their concerns the strike ended in a week. Rehak also made sure the fund cut its ties with companies that were supporting charter schools after he was first elected in 2009.

At the Callan Pension Fund Conference in Salt Lake City last week, the topic was raised about the concern with fossil fuel investments.

Former CTU Recording Secretary Michael Brunson, who retired a year ago, told the workshop that he worked at Nabisco when it suffered the KKR buyout. He said the difference between private equity funds and hedge funds is similar to the difference between a vampire and a werewolf.

The Chicago Teachers Pension Fund has been rocked lately after President Jeffery Blackwell claimed the fund was a 'cabal of evil' filled with racist and misogynist trustees. The board then voted to censure three women of color trustees for alleged unprofessional and disrespectful behavior. They also reprimanded a fourth white female trustee for racism.

Blackwell and Trustee Phil Weiss, who Blackwell named to be the Investment Chair, did not attend the virtual workshop, while two of the censured trustees, Tina Padilla and Maria Rodriguez, were in attendance.