If Senate Bill 2152 is passed by the Illinois legislature, the responsibility for proxy voting by the state's public pension funds will shift to Michael W. Frerichs, the state's treasurer.
The pension funds that will be affected by the measure should the bill be passed are the $63.3 billion Illinois Teachers Retirement System, Springfield; the $23.9 billion Chicago-based Illinois State Board of Investment, which manages the assets of the State Employees' Retirement System, the General Assembly Retirement System and the Judges' Retirement System; and the $22.4 billion Illinois State Universities Retirement System (SURS), Champaign.
The board of trustees of Illinois State Universities Retirement System voted unanimously to oppose Senate Bill 2152 during a March 10 board meeting, according to a news release.
"Funds in the SURS trust come from employee contributions, employer contributions, state contributions and investment income," said John Atkinson, chairman of the board, in the release, adding "the SURS Board of Trustees has a legal responsibility to vote proxies due to their role as fiduciaries for SURS members. The state treasurer does not serve on the SURS Board and is not a fiduciary to SURS members."
"Under this legislation, SURS does not have control over how the state treasurer votes SURS' proxies. We cannot tell the treasurer how to vote and we cannot hold the treasurer accountable for how the treasurer votes. It gives one statewide elected official unilateral control over the long-term value of SURS' assets," said Mr. Atkinson.
Regarding the bill, Illinois TRS' spokesman said in an email that "the system's fiduciary duty to its members prevents it from commenting on any legislation that does not affect funding for TRS" and otherwise declined to comment in an email.
Investment officers from Illinois State Board of Investment did not respond to a request for comment.
Mr. Frerichs said in an interview that he supported SB 2152 stressing "this bill fights for workers' security" and noted that his office manages $50 billion in a variety of state funds with a strong focus on active proxy voting to urge corporations the funds are invested in to make long-term decisions in managing their companies.
He stressed that he has a long track record in proxy voting adding that "CEOs aren't evil, but do need to be pushed to create long-term growth within their companies" year round, not just once a year during proxy season.