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TRS Names Consultant to Help Launch New Defined Contribution Plan

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SPRINGFIELD, IL – Teachers’ Retirement System has hired Cammack Retirement Group, of New York, New York, to serve as the System’s consultant to assist in the creation of a first-ever “defined contribution” retirement plan that TRS must make available to all 161,000 active members.

A 2018 state law requires TRS to establish, as soon as practical, a voluntary “DC” plan that will supplement the existing “defined benefit” pension plan. In general terms, a DC plan is akin to a 401(k) or 403(b) retirement savings account. Members joining the new benefit will make payroll contributions to both the DB and DC plans.

Before TRS can offer a DC plan to its members, the System must complete a major retooling of its IT systems. Currently, school districts report all active member information – salaries, service time, contributions – on an annual basis. The DC plan will require school districts to report the same information after each paycheck. TRS has set a tentative goal of summer 2020, for this conversion, as well as the launch of the DC plan.

In other action during the trustees’ regularly scheduled June meeting:

TRS will issue two official “requests for proposals” for consultants to assist the System with the administration of its $7.3 billion Real Estate Portfolio and its $6.6 billion Private Equity Portfolio. The RFPs will be issued over the summer months with a selection tentatively scheduled for late in 2019.

State law requires TRS to rebid all investment consulting contracts at a minimum of every five years. The contract with the System’s current real estate consultant, StepStone Real Estate, of Cleveland, Ohio, was finalized in 2014. The contract with the System’s current private equity consultant, TorreyCove Capital Partners, of LaJolla, California, was finalized in 2015. Both StepStone and TorreyCove are allowed to bid for the new contracts.

The TRS investment staff reported the following actions:

  • Within the $11.8 billion Global Income Portfolio:
    • The commitment of $100 million to Taurus Funds Management, of Sydney, Australia. Taurus currently administers $61.9 million in TRS assets.
    • The commitment of $50 million to Dignari Capital Partners, of Hong Kong.
    • The commitment of $50 million to Proterra Investment Partners, of Minneapolis, Minnesota. Proterra currently administers $68.4 million in System assets.
  • Within the $7.3 billion Real Estate Portfolio:
    • The commitment of $300 million to the Lone Star Funds, of Dallas, Texas. Lone Star currently administers $153.6 million in TRS assets.
  • Within the $6.6 billion Private Equity Portfolio:
    • The commitment of $100 million to Stone Point Capital, of Greenwich, Connecticut. Stone Point currently administers $229.2 million in TRS assets.
    • The commitment of $95 million to TA Associates, of Menlo Park, California. TA currently administers $66 million in TRS assets.
    • The commitment of £39 million to Inflexion Private Equity Partners, of London, United Kingdom. Inflexion currently administers $1.8 million in System assets.
  • Within the $5.4 billion Diversifying Strategies Portfolio:
    • The commitment of $100 million to Graham Capital Management, of Rowayton, Connecticut. Graham currently administers $202.4 million in TRS assets.
    • The commitment of $100 million to Trend Capital Management, of Boca Raton, Florida. Trend currently administers $201.4 million in System assets.
    • The commitment of $50 million to Informed Portfolio Management, of Stockholm, Sweden. IPM currently administers $196.8 million in TRS assets.
    • The redemption of $218 million from Carlson Capital Management, of Dallas, Texas. Carlson continues to administer $169.6 million in TRS assets.

About Teachers’ Retirement System

The Teachers’ Retirement System of the State of Illinois is the 37th largest pension system in the United States, and provides retirement, disability and survivor benefits to teachers, administrators and other public school personnel employed outside of Chicago. The System serves 417,292 members and had assets of $51.1 billion as of March 31, 2019.

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