The California State Teachers’ Retirement System (CalSTRS) administers the largest teachers retirement fund in the U.S. and the eighth largest pension fund of any kind in the world, providing retirement as well as disability and survivor benefits for teachers: preschool up to the community college level. CalSTRS administers a comprehensive financial security package for its more than 850,000 members, which includes a traditional defined benefit plan, a defined benefit supplement program that acts like a 401K and a defined voluntary contribution plan. At the end of January 2012, CalSTRS’  assets were $149 billion. The pension fund is transitioning from the State and Consumer Services Agency to the Government Operations Agency by July 1, 2013, as part of a larger government reorganization.

Global 500 (Asset International Chief Investment Officers)

The state teachers’ retirement system began in 1913 with contributions from the state’s inheritance tax. Technically, the system was underfunded from its inception, since retirement payments ($500 a year paid in quarterly increments, to teachers who retired with 30 years of service) were made to teachers who had never paid into the new system. Social Security came along in 1935, but state and public employees were excluded from coverage until the 1950s. At that point, the California Teachers Association rejected joining Social Security by a vote of 4 to 1. The idea of adding Social Security and decreasing CalSTRS payments has been revisited many times since by the Legislature, and in fact is on the table now as the state’s budget is examined.

Starting in 1944, the Legislature revised the State Teachers’ Retirement Act and put the system on a better financial basis. Teachers with 30 years’ service now got $60 a month for their retirement. A death benefit was added in the 1950s, the retirement age was lowered to 60, and the minimum benefit rose substantially then changed to a percentage of income from the last year of service. Not until the 1970s, however, were serious efforts made to address inadequate funding. The E. Richard Barnes Act, enacted in 1972, fixed the state’s general fund contribution at $130 million for 30 years, and put contributions from members and employers at 8%. Member and employer contributions rose to 8.25% in 1980, and the state general fund amount changed many times until 1990. At that point, legislation set the general fund contribution at 2.5% of the previous fiscal year’s total teaching payroll, confident that this would pay off the unfunded obligation in 45 years. Of course, the figure changed often over subsequent years.

A 1982 law required CalSTRS to actively manage its own investments—up till that point CalPERS handled investing, and CalSTRS focused on administering retiree, disability, and survivor benefits. That same year, the Retiree’s Purchasing Power Protection Fund was established to supplement benefits if they fell below a certain percentage of the value of the original benefit, measured in purchasing power. That became the Supplemental Benefits Maintenance Account in 1989.

CalSTRS was rocked by scandal in 1983 when board Chairman Gilbert Chilton got a $1 million kickback on an investment deal, abandoned his wife and daughter and went on the lam for several years with his girlfriend, Cheryl Ann “Chickie” Ciccarelli. Chilton turned himself in four years later, pleaded guilty and was sentenced to 15 years in prison.

Afterward, CalSTRS switched investment decisions from a three-member panel to the 12-member investment committee.

In 1995, a health benefits program was added. CalSTRS further enhanced benefits by  adding things like a longevity bonus—for those who served more than 30 years—in 1999 and 2000 because of optimistic actuarial projections. The world-wide financial upheaval in 2008 hit all pension funds hard and left CalSTRS dangerously underfunded. In 2010, after much discussion, the Teachers’ Retirement Board—the body that sets policy for CalSTRS—sought legal advice about whose duty it was to fund the teachers’ retirement system. They found that the state was responsible for making good on benefits promised to CalSTRS members and beneficiaries.

Funding CalSTARS Benefits (CalSTRS publication) (pdf)

Overview of the California State Teachers’ Retirement System and Related Issues (CalSTRS publication) (pdf)

Pension Scandal in NY, What’s Up in CA? (by Ed Mendel, CalPensions)

The California State Teachers’ Retirement System (CalSTRS) is the largest teachers’ retirement fund in the U.S. It maintains a financially sound retirement system for California’s public school teachers, inclusive of those who teach preschool up through the community college level. The Teachers’ Retirement Fund pays for the administration of CalSTRS, as well as funding the benefits to members.

Manages Billions of Dollars

CalSTRS manages a portfolio of investments —$149 billion as of January 31, 2012 —which provides benefits for more than 850,000 members. About 603,000 are active and inactive members, and more than 253,000 are retirees and beneficiaries.

As of June 30, 2011, CalSTRS diversified investments were:

·     53.0% in global equities

·     17.6% in fixed income

·     14.8% in private equity

·     12.1% in real estate

·     1.8% in inflation sensitive

·     0.7% in cash equivalent

The largest equity holdings were:

·     Exxon Mobil ($1.2 billion)

·     Apple ($987 million)

·     Chevron ($659.7 million)

·     IBM ($656.7 million)

·     Microsoft ($597.2 million)

·     Johnson + Johnson ($594.3 million)

·     AT&T ($592.2 million)

·     General Electric ($583.2 million)

·     Proctor & Gamble ($521.5 million)

·     JP Morgan Chase ($512.5 million)

Disburses Benefits

CalSTRS pays benefits to members, retirees, and their beneficiaries through its Defined Benefit Program. The fund also keeps members informed about their benefits, which include retirement, disability and survivor benefits. Retirement pay calculations depend on the member’s age, years of service and final compensation. Joint and survivor annuity options may be selected by the member. A Defined Benefit Supplement Program was mandated by law in 2000, providing either lump sum or annuity payments to members when employment ends. Members can use online tools to calculate their benefits, attend workshops, or order or download booklets and information. Links to the status of any bills before the Legislature that may impact CalSTRS or pensions are also listed on the website.

Corporate Governance

CalSTRS maintains a corporate governance program, believing that good corporate governance “is essential to the safety of the portfolio.” The program uses the influence of CalSTRS’ investments to urge companies both domestic and abroad to adhere to certain principles and support reforms that will benefit shareholders. CalSTRS supports reviews of executive pay practices, board diversity and transparency of environmental risk data by actively exercising its proxy voting rights.    

The Board

The CalSTRS Teachers’ Retirement Board controls both the investment and the operations of the Teachers’ Retirement Fund. The 12-member board is comprised of three representatives elected by active (working) members of CalSTRS, as well as five governor-appointed members: one retired, one from either a school board or community college trustee board, and three public members. All five appointees are confirmed by the Senate; all of these appointed and elected members serve four-year terms. In addition, the state Superintendent of Public Instruction, Treasurer, Controller and Director of Finance sit on the board as ex-officio members. The board meets in Sacramento several times a year and the agenda and minutes are posted online.

The board regularly elects, from its own membership, a board chair and vice chair. It maintains eight standing committees: Appeals, Audits and Risk Management, Benefits and Services, Board Governance, Compensation, Corporate Governance, Investments, and Legislative. In addition, the board selects a Chief Executive Officer and a Chief Investment Officer whenever those positions become vacant, and may fire those officers at will. The Chief Executive Officer coordinates with both staff and the board to implement a business plan, issue reports, deal with problems that arise, and oversee the work of CalSTRS—and do all in ways that align with the board’s policies and priorities.

To operate the fund, CalSTRS maintains an efficient administration system that handles day-to-day business. All administration policies and decisions are made by the CalSTRS board, however, and the Board Policy Manual is online, including investment and ethics policies. The board also holds hearings regarding applications for benefits.

2011 CalSTRS Annual Report (pdf)

CalSTRS administers the world’s eighth largest pension fund, with $155.5 billion in assets as of June 30, 2011. It’s broadly diversified portfolio generated a return of 23.1% in fiscal year 2010-11, but the dismal economic years that preceded it lowered the CalSTRS’ overall three-year returns to 1.2% annually. Its return in 2008-09 was a negative 25.03%.

About 30% of CalSTRS’ 856,360 members were receiving either retirement, disability or survivor benefits as of June 2011. The average monthly benefit paid to one of the 13,896 retiree in fiscal year 2010-11 was $4,088. The median age of recipients was 61.9, with 25.5 years of service credit.

Of the projected $12.6 billion in expenses for FY 2012-2013, most will be paid out in benefits to CalSTRS members: $12.3 billion in retirement, $51.3 million in health benefits, and $8.2 million in teachers’ replacement benefits, for a total of $12.4 billion. Administration accounts for $45.9 million.

Fast Facts (CalSTRS website)

3-Year Budget (pdf)

CalSTRS’ $56 Billion Unfunded Liability
In 2008, CalSTRS lost a quarter of its portfolio value when the economy tanked. And that, wrote John Fensterwald, “created too big a hole to count on the growth of investments to keep up with obligations to current teachers and administrators and those already retired. As a result, payments into the system must be raised.”

That’s a general solution. Does it mean payments from current teachers, larger employer contributions, or a chunk o’ cash from the state’s general fund? Or all three? A consensus is still being hammered out.

The problem—not unique to CalSTRS—is unfunded pension liabilities. The Legislative Analysts’ Office (LAO) defined this as “an estimate of the portion of future benefits already earned by current and past workers that are not funded from available system assets. Put another way, . . . an estimate of the additional amount of money that employers, employees, and/or the state would have to contribute in one lump sum today in order to generate enough investment returns to fund all future pension benefits already earned by current and past workers.”

As of June 2010, that unfunded liability stood at $56 billion, which will grow into more billions if left unaddressed. The figure varies depending on projections of investment growth over the years. For example, if the CalSTRS board lowered the assumed investment return from 7.75% to 7.5%, $5.9 billion would be added to the amount of unfunded liability.

Other pension funds can set rates each year, ensuring that unfunded pension liabilities “are amortized within a reasonable time frame,” said the LAO. But CalSTRS has a unique problem: the state sets the rates paid by members and school districts. If this continues unchanged, actuaries guess that by the early 2040s, CalSTRS would be unable to pay the benefits it promised to retirees and their families.

“Whenever we transmit the valuation and submit our financial statement, the cover letter that goes to the Legislature is, ‘You got to do something about this,’ ”  CalSTRS Deputy Chief Executive Officer Ed Derman said to the media in January 2012. “We’re here to help you figure out how to do it, but you’ve got to solve the problem. The sooner you solve the problem, the less costly.”

Brown’s CalSTRS Problem (by John Fensterwald, Silicon Valley Education Foundation)

Governor Brown Releases Twelve-Point Pension Reform Plan (Press Release, Governor’s Office)

Summary of LAO Findings and Recommendations on the 2011-2012 Budget (Legislative Analyst’s Office)

Lower Returns to Raise CalSTRS’ Unfunded Liability (Associated Press)

Pension Reform Initiatives Abandoned

Claiming that they didn’t trust the Legislature to pass the governor’s plan on pension reform, activists began gathering signatures to put two pension reform initiatives on the November 2012 ballot. The first, the Government Employee Pension Reform Act of 2012, Option No. 1, would have prohibited funds from taking on any new debts or increasing their unfunded liabilities. Employer contributions would be capped at 6 or 9%  of base pay. (The 9% would apply to safety employees, like fire fighters and police.) Employers and current employees would split contributions equally, and the retirement age would be raised. Also, the base pay would be calculated on the last three years of employment.

The Government Employee Pension Reform Act of 2012, Option 2 followed the governor’s proposals even more closely. New hires would be put into a hybrid program, with smaller defined benefits in a managed 401(k)-style plan. Social Security, which CalSTRS members currently forfeit, could be optional.

But in February 2012, the signature gathering and campaigning came to an abrupt halt. The president of California Pension Reform, Dan Pellissier, made that decision “after determining that the Attorney General’s false and misleading title and summary makes it [the ballot initiative] nearly impossible to pass.” He promised to fight for an initiative on the 2014 ballot if the Legislature fails to reform the pension system, and finished his statement in bold print: “California taxpayers face more than $240 billion in pension debts that grow every year, a brutal math problem that requires courageous leadership instead of the special interest politics that is blocking meaningful reform today.”

Columnist Steven Greenhut reported that Attorney General Kamala Harris “titled the reform measures: ‘Reduces pensions for public employees.’ That’s flat-out wrong. Her summary was filled with distortions meant to sway voters against them.” In addition, Greenhut worries that Harris’ “distortion” and the pulling of the initiatives from the November ballot means “that Gov. Jerry Brown’s modest pension reform measures are also dead.” He said the initiatives gave the governor’s measures leverage: “You don’t want my reforms? the governor could ask. Then you’ll be stuck with tougher reforms at the ballot.

“That leverage is gone.”

California Group Moves to Put Pension Overhaul on 2012 Ballot (by Jon Ortiz, Sacramento Bee)

California Pension Reform Suspends Campaign (California Pension Reform)

Harris Distorts Democracy to Aid Unions (by Steven Greenhut, Orange County Register op-ed)

Little Hoover Commission Assails Public Pension Funds

In February 2011, the independent state Little Hoover Commission released a report titled “Public Pensions for Retirement Security” and wasted no time in getting to the point in its introduction: “California’s pension plans are dangerously underfunded, the result of overly generous benefit promises, wishful thinking and an unwillingness to plan prudently.”

“Pension costs to state and local governments are rising at a pace that has grown unmanageable for public agencies to maintain services, and unacceptable for taxpayers,” according to the report. Elected officials and other factors have “put pensions on a path toward unsustainability.”

“A public pension, like a house, is not a get-quick-rich investment,” the report continued, claiming that the level of benefits “have become more generous than reasonable.” The report predicts salary freezes, layoffs, and local government bankruptcies if the problem is not addressed.

State Treasurer Bill Lockyer strenuously disagreed with the commission’s report, calling it “long on rhetoric and short on thoughtful analysis.” First, it “makes no attempt to answer a fundamental question: What should be the goal of public pension systems?” In other words, what percentage of an employee’s salary constitutes an “adequately secure retirement?”

The main recommendation of the commission—that government must cut into the future benefits of current employees to meet the state’s financial needs today—is not quantified in any way. Lockyer asked questions that he said the report did not address: “How much would the move save immediately or in the long run?” He wondered how much savings are needed, and “needed to do what, exactly? To avoid what, exactly?”

Lockyer claimed the report distorts some testimony, and “omits or ignores inconvenient data.” The commission used 2008-09 data on the size of unfunded liability at the pension funds, ignoring data that was available from two subsequent years of market and fund gains. And the report ignores reforms adopted a year earlier by CalPERS that will save up to $13.5 billion by 2040 by increasing workers’ contributions and lowering benefits for new workers.

He accused the authors of undermining their own arguments with “rhetorical pot shots” and an “inappropriate, inaccurate comparison to the subprime mortgage debacle” when talking about public pension problems.

Further, he said, the report makes inflammatory comments that the facts do not support. “About half of CalPERS retirees receive annual pensions of $18,000 or less. 78% receive $36,000 or less. Only 1.7% of CalPERS retirees receive annual pensions of $102,000 or more. The report omits this data.”

CalPERS, CalSTRS Trash Little Hoover Report on Pensions (by Steven Mavigilo, California Progress Report)

Public Pensions for Retirement Security (Little Hoover Commission) (pdf)

Treasurer Bill Lockyer Hammers Little Hoover Commission (by Jon Ortiz, Sacramento Bee)

Bribery at the Top

After four years on the lam, former CalSTRS Chairman Gilbert W. Chilton pleaded guilty in 1987 to accepting a $1 million bribe for arranging a $50 million loan of state funds for a questionable oil drilling scheme. The 42-year-old savings and loan executive was sentenced to 15 years in prison by U.S. District Judge Raul Ramirez and a subsequent appeal was rejected in 1989.

Chilton abandoned his wife and daughter and fled with his girlfriend, 26-year-old former Las Vegas hat check girl Cheryl Ann “Chickie” Ciccarelli, in 1983 when the bribery scandal first broke. He surrendered to federal authorities, saying that he was penniless and “tired of being a fugitive,” and was arraigned on three counts of bribery and extortion for the pension scheme, as well as 70 counts of embezzlement in the theft of $440,000 from his former employer, Guarantee Savings & Loan in Fresno.

Chilton was appointed to the CalSTRS board in 1982 by Governor Jerry Brown and became chairman six months later. Shortly thereafter, he pushed through the $50 million loan to Txpacco Inc., a Denver oil company with almost no assets. The state subsequently recovered nearly all the loan money.

An accomplice of Chilton, Beverly Hills lawyer Anthony J. Truex, pleaded guilty in 1986 to two counts of extortion, received a three-year sentence and cooperated with authorities as part of a plea bargain agreement. 

At his sentencing, Chilton told the judge that he had given away nearly $500,000 of the ill-gotten gain to poor people because he felt remorse for his deeds. Judge Ramirez called the confession “ridiculous, ludicrous” and said, “It was white-collar, high-class thievery – no more, no less.”

Chilton’s girlfriend, who was not charged in the case, told reporters that she remained committed to their relationship and still planned to marry him. “I'll stand by him. I love him,” she said.

Among the spectators in the courtroom for the sentencing was Chilton’s now ex-wife, who quietly sobbed. 

Fugitive Ex-State Official Gives Up on Bribery Charge (by Leo C. Wolinsky, Los Angeles Times)

Ex-Teachers Pension Chief Pleads Guilty in Loan Case (by Douglas Shuit, Los Angeles Times)

Former Chief of State Teachers Retirement System Sentenced (Associated Press)

Ex-Head of California Board Sentenced for Embezzlement (Associated Press)

United States v. W Chilton (OpenJurist)

CalSTRS: Remembering Gilbert Chilton (by Ed Mendel, CalPensions)

Governor Brown’s 12-Point Plan

To stop practices such as pension spiking—wherein a worker cashes in all unused vacation and sick time during the last year of employment, inflating the final year’s pay—Governor Jerry Brown introduced a pension reform plan in 2011 which is now being considered in the Legislature. In the governor’s plan, retirement benefits would be figured on the last three years of employment, not just one year. Some of the other points in Brown’s plan include raising the retirement age, a ban on returning to work while collecting a pension, and a ban on retroactive pay increases, such as the ones that made headlines when Bell city officials abused them—although that affected the California Public Employees’ Retirement System (CalPERS), not CalSTRS.

Brown’s plan does not address all aspects of the unfunded liability issue in CalSTRS’ defined benefit program. After meetings with the Legislature and discussions about the governor’s 12-point program and other solutions, CalSTRS compiled examples of how different scenarios might play out over the years. The scenarios involve increasing member, employer and state contributions at different levels starting in 2016, as well as different rates of return, and time frames of up to 75 years.

Governor Brown Releases Twelve-Point Pension Reform Plan (Press Release, Governor’s Office)

Presentation of Legislatively Requested Funding Scenarios (Teachers’ Retirement Board Regular Meeting, February 2, 2012)

Accounting Reform

Conforming to the need to put more money into the fund and to clarify contributions, the Governmental Accounting Standards Board proposed new rules in September 2011 that “will require school districts and other employers in the system to begin reporting pension liabilities on their balance sheets.” This could add millions to school board budgets, according to CalPensions. However, the change may not take place until the 2013-2014 fiscal year.

Who Pays CalSTRS Debt: State, Schools, Teachers? (by Ed Mendel, CalPensions)

Home Loan Program

CalSTRS operated a home loan program for members from 1984 until its suspension in October 2011. The program funded 430,000 loans involving $5.9 billion worth of mortgages since its inception, but Bank of America, which serviced the loans, announced it was getting out of the business.

Although no new loans are being made, already existing loans are unaffected.

The centerpiece of the CalSTRS program was a so-called “80/17” plan, first offered in 2001. Loans were made for as little as 3% and consisted of an initial mortgage for 80% of the purchase price and a second mortgage at 17%. The big selling point was that there was no payment on the second loan for five years.

As the housing crisis deepened after 2008, fears arose that the loans were helping put CalSTRS members in homes they couldn’t afford, and lenders became more wary of making those kinds of deals.

But CalSTRS officials said it was only a question of when, not if, the program would be revived. “This is a disappointing outgrowth of the many problems confronting the housing and mortgage industries, however CalSTRS is committed to the member home loan program and will resume new loan activity as soon as a new partnership can be established with an administration servicing and compliance agent,” said CalSTRS Chief Investment Officer Christopher J. Ailman.

CalSTRS Home Loan Program for Teachers (by Mortgage loan originator Doug Bullwinkel)

CalSTRS Home Loans: Too Risky, Unaffordable? (Ed Mendel, CalPensions)

CalSTRS Suspends Home Loan Program (CalSTRS website)

Teachers’ Benefits: Well-Earned Rewards or a Drain on the System?

A mix of teacher contributions, employer contributions and state funds make up the pensions paid out by CalSTRS. Are teachers being fairly supported for their years of service, or is this another inflated giveaway?

Teachers Earn Their Pensions

“Teachers and public employees are being scapegoated for problems caused by Wall Street, and pensions are being used as a wedge issue to divide working class Americans,” says the California Teachers Association (CTA) website. “Why the attack on public employee pensions? Who really benefits by their elimination? The answer is Wall Street.”

“The real problem is not that teachers, firefighters, and other public servants have pensions (‘defined benefit plans’), the problem is that private sector workers do not. That’s because the private sector systemically eliminated defined benefit pension plans in favor of risky 401(k) plans—reducing costs to corporate America at the expense of the American worker. Instead of attacking teachers over the retirement benefits that they have earned, we should be having discussions about how to create better retirement options for everyone.”

“The median CalSTRS pension replaces about 60 percent of our working income,” wrote public school teacher Dana Dillon in Thoughts on Public Education. “Unlike most workers, teachers in California do not earn any Social Security benefits. . . . Moreover, most public school educators in the state retire without employer-sponsored health care after age 65.”

Dillon insisted that her pension is not a “taxpayer giveaway:” “CalSTRS members contribute 8 percent of their monthly pay to help finance their retirement.” She outlined the other contributions: 8.25 percent from the school district, of which three quarters is offset by not having to pay Social Security taxes, 2 percent from the state, and the rest from the return on CalSTRS’ investments.”

Ed Mendel at CalPensions pointed out. “Teachers and non-teaching school employees in California are in unions that do not bargain pensions. Instead, their pensions are in big statewide pools that have some of the lowest costs for employers and some of the lowest pension formulas for retirees.”

Teacher Lynne Formigli brought up another point: “What do teacher pensions have to do with student learning? They provide an incentive to retain good teachers in the classroom, which directly benefits our students. We need teachers willing to make teaching their profession, not just something to build their resumes for a year or two before they go on to make real money elsewhere.” Formigli emphasized the benefits of teacher experience, not just in the classroom but in mentoring new teachers and carrying institutional knowledge and stability.

“We will need pension reform, not because greedy teachers are gaming the system, getting cushy payouts . . .  but because the dot-com bust and more recent Wall Street economic crisis have devastated the value of all investments,” she said. “This is the real reason CalSTRS faces a $56 billion unfunded liability. . . . Teachers pay 8% of our salaries into the system, districts contribute 8.25%. It’s our money, it’s a good system. Don’t believe the lies designed to take it away from us.”

The Truth About Teachers’ Retirement (CTA website)

CalSTRS Is Not in Crisis: Do Not Begrudge the Teacher’s Pension that I Earned (by Dana Dillon, Thoughts on Public Education blog)

School Pensions: An Argument for Not Bargaining (by Ed Mendel, CalPensions)

California Teacher Pensions: Are We Really Breaking the State? (by Lynne Formigli, InterACT blog)

CalSTRS CEO Says: Don’t Mess With Teachers’ Pensions (by Michael Dunn, Modern School)

Teachers Are Milking the System!

“The number of retires earning $100,000 or more from the California State Teachers’ Retirement System (CalSTRS) has increased dramatically,” announced the OC Watchdog blog of the Orange County Register. In 2009, 3,010 retirees got pensions of $100,000 a year or more. In early 2011, the number had jumped to 5,308. “That’s a 76 percent increase in less than two years.”

“And that’s not all. . . . Guess how many CalSTRS pensioners are earning between $75,000 and $99,999.99.

“19,503.

“Combined, you’re looking at 24,811 retired California teachers earning more than $75,000.”

“How much is that sweet retired teacher who lives down the street draining from your bank account?” asked Larry Sand of Publius’ Forum. He claimed that it’s not well known “just how much of Joe and Jill Taxpayers’ dollars are going into the pockets of retired teachers.”

Yes, they contribute 8% of their pay, but where does the rest of the money come from? “The current rates include 8.25 percent from the teacher’s employer and 2 percent from the state. But wait a minute. Who is the teacher’s employer? It’s the school district. . . . Hence, the employer’s contribution is all really the taxpayer’s burden, as the state, city and feds generate no money on their own. So it would be much more honest to say that 10.25 percent comes from the taxpayer.”

Sand described a teacher who retired after 24 years. Her contribution to retirement, including interest, would be paid out in just four years. After that, the taxpayers are footing the bill. Should she live to be 80, “her pension will be coming from the taxpayer—about $600,000 worth. . . . Can anyone justify this? Hardly.”

Sand suggested that “those who are retired need to show good will and agree to take a cut in their pensions.”

Number of $100,000 Retirees Skyrocket in Teacher Pension System (by Brian Joseph, Orange County Register)

More Pension Truths and Why You Should be Very Angry (by Larry Sand, Publius’ Forum)

James D. Mosman, 1989-2001

Larry Kurmel, 1985-1988

Rick Cohen, 1984 (Interim)

Robert F. Roberts, 1984. (Appointed acting director for 90 days)

C. Michael McClaren, 1984. McClaren, former CEO of the Minnesota Public Employees’ Retirement Association, was fired after only three months on the job, once the board learned that he was under investigation in Minnesota by a state Senate committee. He allegedly gave confidential names and information to a union official, who used the data to raise political campaign money. In addition, the committee found certain expenses of McClaren’s questionable.

Michael Thorne, 1967-1983

Leo J. Reynolds, 1957-1965

Prior to 1957, there were no executive officers. “The Secretary of the State Board of Education was designated Secretary of the Teachers’ Retirement Board, and the board could authorize its secretary to administer retirement benefits and perform other routine acts necessary to the administration of the system.”