Chicago Public School Teachers Pension & Retirement Fund's board voted unanimously to ask its personnel and service providers committee to review a proposal to conduct a conflict-of-interest audit of Mercer Investment Consulting, the $10.3 billion fund's consultant.
The audit proposal, made by Benchmark Financial Services, would seek to determine if the plan "was harmed as a result of conflicts" surrounding Mercer, according to the proposal. Patricia Knazze, fund president, said the committee will assess, among other issues, what information Mercer has provided in regard to the allegations and the capability of Benchmark to conduct such a probe. The panel will report to the board at its March 17 meeting.
Benchmark President Edward A.H. Siedle wrote of "conflicts of interest present in the investment consulting industry involving undisclosed financial arrangements between pension consultants and money managers. In the past, your board has been concerned about these conflicts and has sought disclosure from your consultant. … Your board has, simply put, been unable to determine whether these undisclosed arrangements between your consultant and money managers might have had a detrimental impact upon the investment performance of your fund."
Brad A. Blalock, Mercer consultant to the fund, said the firm has disclosed its financial arrangements with money managers.