Chicago Treasurer Kurt Summers.
– Mark Anderson writes for the Ward Room, an on-line site for NBC Chicago.
As he settles in for his first 90 days as Chicago’s newly-appointed Treasurer, Kurt Summers has made it clear he has big plans for the office he holds and the investments and financial transactions he oversees.
Summers, formerly chief of staff to Cook County Board President Toni Preckwinkle, comes to the job after a long history in the private sector, most notably as a senior vice president with Grosvenor Capital Management, one of the city’s biggest financial services firms.
The mayor appointed Summers to replace outgoing Treasurer Stephanie Neely in October, and, in doing so, all but guaranteed Summers will remain in the job for years to come as Neely faced no opposition to reelection in the upcoming municipal elections.
As part of his responsibilities, Summers sits on the boards of four city pension funds—the Municipal Employees’ Annuity & Benefit Fund of Chicago (MEABF), Laborers’ & Retirement Board Employees’ Annuity & Benefit Fund (LABF), Policemen’s Annuity & Benefit Fund (PABF) and the Firemen’s Annuity & Benefit Fund (FABF).
Shortly after taking office, Summers began outlining big plans for the role of Treasurer in helping to solve Chicago’s financial woes, including a renewed focus on ensuring the City invests its capital locally and fixes chronic problems with the city’s pension funds through a mixture of fee reductions and investing in the “right kind of assets.”
On his first day in office, Summers released a 13-point action plan that highlighted “securing lower investment fees”, “identifying and investing in emerging investment managers” and “working to ensure the long-term security of our pension funds” as part of his goals for the office.
The city’s pension funds are woefully underfunded and in crisis, with the funds significantly underfunded by as much $37.3 billion. The firefighters fund is in the worst shape, with assets to cover just 24 percent of future liabilities.
For Summers, finding the right kind of assets for pension funds to invest in is likely to mean significantly changing how the funds’ portfolios work, and moving from more traditional investment choices to riskier, less liquid “alternative” investments. Much of the problem lies in the funds’ receiving less-than-expected returns from investments over the years, and boosting returns is an area Summers hopes to be able to fix with his particular brand of expertise.