Pension Fund Debate

MF Trustee Calls out Core at CTPF Board Meeting on Fossil Fuels

By Jim Vail

CTPF Trustee Phil Weiss

When Chicago Teachers Pension Fund Trustee Jim Cavallaro made a motion at the October 21st board meeting for the pension fund to divest from the fossil fuel industry, there was push back.

Cavallaro on his last day serving as a pension fund trustee made the motion that was similar to the resolution the Chicago Teachers Union delegates passed the previous month at the House of Delegates meeting.

CTPF President Jeffery Blackwell then suggested that the resolution be sent to the Investment Committee to be further studied. Resolutions and bills that political leaders consider unfriendly are sent to committees to die or get watered down.

But CTPF Financial Secretary Jacqueline Price-Ward quickly seconded the motion that her party Core considers one of their five top reasons to vote for their teacher candidates in the pension board election that ends Nov. 5 - "Working to divest from the harmful fossil fuel industry."

Cavallaro said the CTPF should engage with a consultant to review its investment portfolio in the fossil fuel industry and then recommend to divest and support investments in renewable energy sources that are considered more environmentally friendly.

"I think it's something on a lot of members minds," Cavallaro said. "It's on a lot of younger members minds. It's not something out of the norm."

He added that the New York teachers pension fund has committed to divest from the fossil fuel industry and Illinois Governor JB Pritzker has pledged to move away from supporting the fossil fuel industry. He said it would also support many minority communities who are affected on the SW Side of the city where factories pollution has led to chronic illnesses in the children.

However, another pension trustee said that to compare the NY Teachers Pension Fund to Chicago is ridiculous. The NY pension fund is the best funded public pension plan in the nation at 97 percent funded ratio whereas the Chicago teachers pension is funded at less than 45 percent.

Retired teacher pension trustee Mary Sharon Reilly who is up for re-election as a Core candidate said everyone agrees we should divest from the industry, but "it's not overnight."

The new CTPF Director Carlton Lenoir said he agreed that the issue had to be further studied and benchmarks looked at to see how divesting will affect the fund's bottom line.

Members First Trustee Phil Weiss said this was a "Core issue" and that it should be looked at in the investment committee. 

Trustee Gervaise Clay, who like Cavallaro was at her last pension board meeting, said Weiss's comment was a "cheap shot and unnecessary."

Clay, who is a member of Core and was one of the trustees censured by the board that was led by Blackwell and Weiss, said the motion should be voted on because they have made motions in the past that did not have to be sent to a committee.

The CTPF Counsel Joe Burns then stepped in and suggested that the board vote on a friendly alternative measure that recommends that the pension board formalize a commitment to study divesting in a way that is practical and prudent and report back to the board. 

Cavallaro agreed with the suggested change.

"I have never heard this board address this issue," Cavallaro said. "I never saw a report to see it's something we're looking at."

Retired Trustee Maria Rodriguez who is also up for re-election and was a target of the board's censure said she "was embarrassed" that Weiss would call out another caucus at the board meeting.

"I wish the caucus wouldn't target me," Weiss said at the board meeting. "I saw their emails. They are negative emails."

After Price-Ward told Weiss it should have been addressed at the fund's Investment Committee, Weiss then asked Price-Ward why she didn't bring this issue up under new business during the last investment committee meeting before the CTU held a public forum on divesting from fossil fuels. Ward told him that the issue was not yet brought up.

"I don't buy that," Weiss said.

Core appears to be split on divesting from fossil fuels despite their election rhetoric. While Price-Ward and Cavallaro were in favor of the original motion, Blackwell and Reilly were both against it.

The final vote passed on the amended motion for the Chicago Teachers' Pension Fund be committed to ask an investment consultant and its staff to study divestiture in a prudent manner and then make a report to the board.

Clay voted against the motion and Weiss abstained, while the rest of the trustees voted in favor of the motion.

"I have no problem studying it," Weiss told Second City Teachers. "I abstained because I feel the investment committee is the appropriate place to do that."