Chicago Laborers’ Annuity & Benefit Fund delayed action on private equity commitments at its board meeting Thursday following the Illinois Supreme Court’s ruling May 8 that pension reform legislation is unconstitutional.
The board of the $1.4 billion pension fund put off action on the commitments at least until its June 11 meeting “so we they can digest the Supreme Court ruling and see if it impacts us,” said Michael Walsh, executive director and chief investment officer. Mr. Walsh would not identify which private equity funds would receive commitments or how much each would get.
“There’s no direct impact on investments right now, but it’s such a recent development, it’s kind of hard to ignore,” Mr. Walsh said in a telephone interview Friday. “The funding component (of the ruling) has the potential to have a material impact from an investment standpoint, but we just need time to rethink what we’re doing in regards to the private equity commitments. It’s really pushed all our investment agenda back.”
There are two lawsuits against a Chicago pension reform law passed last year that would directly impact the Laborers’ board. A hearing on the cases will be held July 9 before Cook County Circuit Court Judge Rita Novak.
“If that law is ruled unconstitutional, it’s back to the drawing board,” Mr. Walsh said. “Asset allocation, everything would be on the table then.”
At Thursday’s meeting, Michael LoVerde, trustee, said the board currently is acting within the Chicago pension reform law, but other trustees said they expect the Chicago reform case eventually to go before the state Supreme Court.