Rauner adds his toadies to the TRS board.

Bruce Rauner


February 26, 2016

Governor Announces Appointments; Staff Hire

SPRINGFIELD ­ Governor Bruce Rauner announced he has made appointments to the Illinois Board of Higher Education and Illinois Teachers Retirement System Board. 

Name: Tom Cross

Position: Chairman ­ Illinois Board of Higher EducationGovernor Bruce Rauner  has appointed former State Representative Tom Cross as the Chairman of theIllinois Board of Higher Education. Crosss experience as a state legislator and fiscal reformer will be an asset to the board. Cross served in the Illinois General Assembly for 22 years and was the House Republican Leader from 2002-2013. He is currently a distinguished fellow at Aurora University where he promotes innovation in STEM education programs and a senior consultant at Culloton Strategies. Cross is also an attorney and a former prosecutor in the Kendall County State¹s Attorney¹s office. Cross earned his bachelors degree from Illinois Wesleyan University and his law degree from Samford University. He lives in Oswego.

Name: Ann Deters

Position: Board Member ­ Illinois Teachers¹ Retirement System Board

Governor Bruce Rauner has appointed Ann Deters to the Illinois Teachers Retirement System Board. Deters¹ experience in business, finance and consulting makeher an ideal choice for the position. Deters is the founder and CEO of Vantage Outsourcing, a medical service company and was previously named in the Top 500 Fasting Growing Small Businesses in the U.S. She founded the company in 1997, which has grown to include a customer base of more than 175 accounts across the country. Deters is a graduate of Southern Methodist University and earned an MBA from Northwestern University. She lives in Effingham.

Name: Randall Winters

Position: Board Member ­ Illinois Teachers Retirement System Board

Governor Bruce Rauner has appointed Randall Winters to the Illinois Teachers Retirement System Board. He brings over 20 years of financing and advisory experience to the board.Winters served as a senior member of the Financial Sponsors Group of Deutsche Bank and its predecessor entities. Winters has extensive experience working closely with private equity funds in a variety of financing roles as well as fundraising. He also served as an associate in investment banking for The Chicago Corp and for Barclays. In addition to his work, Winters is chair of the Governance Committee for the Illinois Holocaust Museum and Education Center and serves as their treasurer. He is also an advisor to the Rush Mini-Medical School program. Winters holds a bachelor¹s degree in accounting from Boston University and an M.B.A. from the University of Chicago. He lives in Highland Park.

In Illinois today we can only expect a little more than one-third of our new teachers will have a full career in education in our state.


TRS trustee Bob Lyons (left) and me at IRTA state convention last week.

– Bob Lyons. Bob is one of our elected member of the Teacher Retirement System’s board of Trustees representing current retirees.

I stayed in Springfield after the conclusion of the IRTA Convention for the October TRS meeting.  In the next days I will share with you the results of that meeting and some of the details of the actuarial study of education and the pension fund in Illinois.  

Today I want to tell you just one conclusion from the actuarial study.  For some years we have all heard the statistic that half of all starting teachers quit in the first five years, and of course that was before the advent of tier II.  Wednesday we learned from our actuaries based on their experience review that they assume that only 37% of our 25 year old teachers will retire from teaching in our state.  

It would be expected that only a couple percent will die or be disabled before they can retire, so the great majority that will leave will either quit all together, be dismissed, or transfer to another state. About 63% will never see a monthly  retirement check.   

I am sure that in recent years you have considered that if you were in college today would you go into teaching, and specifically in Illinois?  I would not and would not recommend that anyone become a teacher in our state.  

I have been retired from teaching for 21 years and from coaching for 13 years, so what I know of education today is hearsay, but based on that I can only consider that I was fortunate to have taught  in what was the Golden Age of education in Illinois.  

And all of those teachers that joined the profession since January 1, 2011, and are members of tier II are making full contributions to an inadequate pension and will need to go on and contribute to social security before they can retire.  

That is more than sad, it is a travesty.

TRS investment returns.


TRS board of trustee member, Bob Lyons (right).

Illinois teachers mainly rely on their Teacher Retirement System pensions for income in their retirement years.

As I constantly remind people, we get no Social Security if we have always worked as a teacher.  Our benefits are severely reduced if we are career changers, like me.

We are prevented by federal law from receiving any Social Security spousal benefits.

I constantly remind people of this because each time I do, somebody in the crowd will express surprise.

The Illinois Teacher Retirement System released the results of their investment returns the other day.

My friend Bob Lyons, who is one of the annuitant (us retired folks) representatives on the TRS board of trustees, sent out the following:

The accounting team sent me what I believe will be the final performance returns for fiscal year 2015.  I am passing these along as there was some meaningful uplift in numbers since the preliminary discussion at the August meeting.  Relative to peers, the final data has pushed TRS into the top quartile over all time periods (the consultant notes that it is a pretty small peer group for the 30 year observation with only 18 funds reporting data for that long of a time period).

Returns for the fiscal year ended June 30, 2015 are as follows:




TRS (gross)


TRS (net)


Ranking (Percentile)






3 Year





5 Year





10 Year





20 Year





30 Year





The long term numbers are especially significant when you consider those legislators that try to attribute our unfunded status to poor investment returns

Bob Lyons

Bob’s last point is an important one.

While I have problems with the lack of transparency involving those who manage our investments – which at one time included our current governor – the returns on our investments have never been the problem.

“The problem” being that we are somewhere around 60% underfunded

The underfunding of TRS and other state pensions is the result of our elected officials spending our money elsewhere, failing to meet their payment obligations for decades and decades.

If we lived in a different, humane and saner system, older retired people would not have to pay attention to investment returns or worry about the flavor of cat food.

Whether the stock market went up or down might be of interest to those retirees who liked to gamble.

I do. Vegas is fun for a weekend.

But I don’t like gambling with all my retirement savings.

Wall Street investments are Vegas on steroids.

A humane system would have a government that guaranteed every older person a retirement with financial security and without fear.

There are countries in the world that do that. Most countries in the industrialized world do that.

For the present, it looks like our returns are doing pretty well.

Imagine what our retirement fund would look like if TRS could have received those investment returns on all the money the politicians owed us.

Northwest Herald backs Illinois Policy Institute’s Pension theft Plan B. TRS’ Ingram calls it out.


The Northwest Herald’s editors have decided that the stink tankers from the Illinois Policy Institute – which was funded by Governor Bruce Rauner – is right about moving state employees to a 401(k).

The state’s pension systems are underfunded by at least $111 billion. That number grows by the millions daily, and doesn’t count the $56 billion of unfunded debt for retirees’ health benefits.

Current pension benefits are, frankly, unaffordable. Each year, more and more tax money the state collects goes to pay nonworking retirees as opposed to services. The only way the current system can be sustained is through significant – and by significant, we mean huge – tax increases. Any tax increase would only drive more jobs out of Illinois and break the backs of hardworking Illinoisans, many more of whom also would flee the state.

Maintaining the status quo has one – and only one – eventual outcome: State retirees and employees will lose all of their retirement benefits, creating an economic crisis so big that 2008-2009 would seem like boon years in comparison.

The biggest obstacle to meaningful pension reform is language in the state constitution that says public employee benefits “shall not be diminished.”

So what’s Plan B?

During his campaign for governor, Rauner discussed a defined contribution option, a 401(k)-type retirement plan similar to what most employers in the private sector offer. This is the way to go.

An optional defined contribution plan could be offered to all state employees almost immediately, without legal challenge, as more meaningful, longer-term pension reform is adopted. One of the state’s public pension systems, the State University Retirement System, already offers it on an optional basis, and more than 18,000 university employees have opted in. Why wouldn’t they when the pension systems are in danger of crashing?

The Illinois Policy Institute, a conservative policy think tank, also has recommended adopting legislation that would move all state workers into a defined contribution plan moving forward.

 “The pensions earned to date would be protected and treated as though they retired today,” wrote Diana Rickert, vice president of communications for the Institute. “All new retirement benefits would be earned under the defined contribution plan, so when the current workers ultimately retire, they will have both a pension and a 401(k). All new workers would be on a 401(k).”

The institute says its plan would pay down the unfunded liability by 2045, and reduce the state’s annual pension payment to $4.1 billion. This fiscal year, the state is paying more than $6 billion on pensions only, none of which addresses the unfunded liability.

Because already accrued benefits would not be “diminished,” the institute’s plan passes constitutional muster.

Rauner should open up an optional 401(k)-style plan to all state employees as soon as possible, and work with lawmakers to pass legislation similar to what the Illinois Policy Institute proposes.

They are the best options we’ve seen to save Illinois from insolvency.

Illinois Teacher Retirement System’s Executive Director calls them out on the facts.

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Governor Wall Street moves to seize control of the Teacher Retirement System board of trustees.


Millionaire Governor Bruce Rauner made much of his private fortune by investing public employee pension funds.

Inaugurated just a few days ago, he is now moving to seize control of the Illinois Teacher Retirement System’s board of trustees.

The following email is from Bob Lyons who is elected by current retirees as their representative on the TRS Board.

Monday we had two open seats on our board and the outgoing governor appointed one of his people to the TRS Board that morning, though he should have known that the appointment was made too late.  Today that person and also two Quinn appointees, Marcia Campbell and Mark Harris, that were appointed, but never confirmed by the senate were told that they are no longer TRS trustees.  Campbell of course is a state officer of the IFT and has served with distinction for some years.  That means that now we have four openings for gubernatorial appointees that Rauner can make. Two Quinn appointees still have two years on their term.  Recall that there are a total of thirteen seats on the board with the State Superintendent of Education as our president.  Chris Koch was appointed superintendent under a Democratic administration and Rauner will have new appointments to state school board as well.  Six seats on the TRS are held by active and retired teachers.

Bob Lyons

TRS’s missing pension checks.

I received word yesterday that there might be as many as 5,000 retired members of the Teacher Retirement System who did not receive their March 1st check.

On Friday all TRS members were notified that because March 1st fell on a Saturday, our checks would not be posted to our accounts until the 3rd if we used automatic electronic deposit.

Of the over 100,000 retirees, roughly 5,000 still receive their checks by mail.

As of yesterday they had not received them.

What happened to them? Nobody seems to know.

Richard Ingram, TRS Executive Director, sent this out:

Our staff, especially Sally Sherman and Tom Gray, have continued to follow up through various channels on whether or not there is a problem with the delivery of the March 1 benefit checks.  The Comptroller’s office insists they were delivered to the Postal Service.  The Postal Service is trying to confirm delivery of these approximately 5000 checks.  If they cannot locate them by tomorrow, the Comptroller’s office has indicated they will reissue them immediately. We have been taking calls and members generally seem to understand that it is not a TRS created circumstance. We will update the website and Facebook as we learn more.

The problem is that those 5% of TRS members who receive checks by mail are more than likely those who can least afford the delay.

Another hit, although unplanned, on retirees.


Scott Reeder is up to no good when it comes to TRS.

Scott Reeder has made a career out of bashing teacher unions. So, it was no surprise to find this piece of pseudo-journalism in something called Cornerstone Media – Lincoln Trails Publishing.

Of course, Reeder is no journalist. He is a horse shit salesman for the right-wing stink tank, the Illinois Policy Institute.

Reeder has several arguments going in this article.

One is that there is somehow something wrong with taxpayers, in the form of the state, paying into the retirement systems of those who work for the state.

Illinois taxpayers contributed three times as much money to the Teachers’ Retirement System, or TRS, last year than did participating teachers, even as the makeup of the board tasked with overseeing the state’s largest pension fund tilted more heavily in favor of teacher union representation.

Scott. Here’s news that will shock you: When I was a teacher, taxpayers through the school district contributed 100% of what I earned. Not even most. All of it. 

That’s because I worked for them.

Then Reeder wants you to be suspect that teachers would sit on the board of trustees that run the pension system. And that some of those teachers are also members of the largest teachers union in the state.

If it weren’t for the right of teachers and retirees to elect members to the TRS board of trustees, it would be run by political appointments like Blago’s Rezko, Cellini and Rosenberg.

Reeder cites criticisms by former TRS Executive Director Jon Bauman.

So I asked Bauman, “Reeder makes you sound pretty anti-union. Was that your intent?”

Absolutely not. I was reluctant to talk to him because it sounded like he already had his mind made up about the story, but he had spoken well of me in the past so I felt like I owed him one.

His premise was that unions, especially IEA, hold too much power in TRS. I don’t think this article made that case.

The comments of mine in quotes appear to be correct.

I don’t know where he came up with this stuff about AFSCME and the law firm – we did hire one, but only for the purpose of making sure that management did not violate any labor laws as AFSCME pursued representation.

Reeder also omitted that I was terminated by legislation. People have speculated that Ken Swanson may have asked Quinn to make this happen. I have no way of knowing to this day. Swanson and I were not close, though I enjoyed good relationships with Anne Davis and Cinda. I also don’t see what he was getting at with the bit about “fact-checking.” We did that for Cinda and other trustees routinely – seems to me it’s both a good idea and part of staff’s job.

In my 31 years in State Government, across three agencies, I worked with almost all the unions representing State employees, including all the trades, Teamsters, and AFSCME. I never had a grievance filed against me personally and we had good labor relations in all my areas. I am not anti-union.

It’s no secret that some of us have have concerns about IEA President Cinda Klickna wearing two hats as IEA President and member of the TRS board of trustees. The responsibilities and interests of those two jobs often diverge in ways that are different than for the other teacher reps.

But Reeder is doing a hack piece here.

He misrepresents both the nature of the retirement system and the role of those who make sure TRS is run honestly and gets a good return on investments for its members.

Which it is and does.

Reeder on the other hand is just up to no good.

Jon Bauman. More on the suit.


I need to think about this some more (already past my bedtime) and talk to a “real lawyer” but I’m wondering aloud if the correct TRS defendant, if there needs to be any for the suit to be complete, is the Executive Director (no offense intended Director Ingram) instead of the Board of Trustees. Article 16 states that the ED, not the BOT, is responsible for the “detailed administration of the system.”

The TRS Board will have to possibly promulgate rules with JCAR implementing some aspects of the law, but that is a staff-driven process carried out in collaboration with major stakeholder groups. The buck stopped with the ED’s recommendations to the BOT.
Although the relationships are apples to fruit salad, IRTA’s suit also names IRTA member, friend of retirees, my friend, and TRS Trustee Bob Lyons as a Defendant, unfortunately. Not right.

Good work from Glen.

– Jon Bauman

Jon Bauman is the former Executive Director of the Teacher Retirement System.

IRTA pension suit names TRS board as a defendant which includes Cinda Klickna. What’s up with that? Glen Brown explains.

From my friend Glen Brown’s blog:
“The lawsuit names Quinn, Illinois Comptroller Judy Baar Topinka and the Illinois Teachers’ Retirement System’s (TRS) board of trustees as defendants and seeks preliminary and permanent injunctive relief. It was filed as a class action, representing retired and active members of TRS, who are not currently members of any teachers’ labor union” (Reuters).
It’s the way the law works: IRTA is suing TRS Board. Why? The Board will become administrators of the law.
Is the fact that Klickna is both president of IEA and a TRS trustee a conflicting and disadvantageous set of circumstances for herself, as well as for members of both the IEA and TRS?
Read the entire post here.