October 3. 2019 RETIREMENT BOARD Via Hand Deliver 1' Lawrence L. Wilson, CPA, President Robert DeGraff The Honorable Toni Preckwinkle 10333132253215: President. Cook County Board of Commissioners Bill Kouruklis 118 N. Clark St. Room 537 Chicago. IL 60602 Patrick McFadden Joseph Nevius The Honorable Bridget Gainer Kevm Oehalla Chair. Pension Committee ol'the Cook County Dennis Whlte Board of Commissioners Regina Tuczak, Execufjpg Director 1 18 N. Clark St. Room 567 Chicago. IL 60602 Mr. Ammar Rizki Chief Financial Of?cer Cook County Bureau of Finance 118 N. Clark St. Room 1127 Chicago. Il. 60602 Re: Communications on Pension Reform Legislatior Dear President Preckwinkle. Commissioner Gainer and Mr. Rizki. The Retirement Board of the County Employees? and ()flicers? Annuity and Bene?t Fund ofCook County (the Cook County Fund) appreciates the efforts ofthe President and Cook County Board of Commissioners to negotiate lntergox'ernmental Agreements (IGA) between the Cook County Board and the Cook County l'und since 2016 with 1espect to additional funding. Unfortunately. the Forest Preserve District Employees Annuity and Benefit and 01 Cook County (the F01est Prescrye Fund) does not hay an IGA \and continues to experience issues 1elating to additional funding. The purpose ofthis letter is to con?rm that the Retirement Board is willing to continue working with Cook County on pension reform legislation. The Retirement Board has a fiduciary duty to its participants and beneficiaries. and acknowledges that the President and the Board ofCommissioners also have a responsibility to manage Cook ounty's ?nances wisely. As you know. the Retirement Board has prepared legislation to address the funding requirements ofthe Cook County Fund and the Forest Preserve Fund (collectively. the Fund). However. such legislation has not yet been introduced to the Legislature pending any 111eaningful effort to work with Cook County on a mutually agreed upon legislative proposal. County Employees? and Officers? Annuity and Benefit Fund of Cook County Forest Preserve District Employees? Annuity and Benefit Fund of Cook County 70 West Madison, Suite 1925 ChiCago, 1L 60602 312.603.1200 312.603.9760 fax 1 We have been provided draft legislation by Chief Financial Officer Ammar Rizki that provides for actuarial-based funding ofthe Fund. along with other matters. The following details the communications regarding such draft legislation proposed by Cook County: 0 March 7, 2019 A summary ofsix strategic long?term goals. drafted by Mr. Ammar Rizki. was provided to the 'l?rustees with respect to legislation being drafted by Cook County. 0 April 4, 2019 Mr. Rizki appeared before the Retirement Board and discussed a PowerPoint presentation that he provided which included the six proposed legislative goals. 0 May I, 2019 Draft legislation was received from Mr. Rizki and distributed to the Retirement Board. 0 May 2, 2019 The Retirement Board scheduled a special meeting on Friday. May 10. 2019. to discuss the draft legislation received. I May 10, 2019- The Retirement Board convened a special meeting to discuss the draft legislation. A letter and table ofconcerns regarding the draft legislation was reviewed and approved. The letter was hand-delivered that day to the President ofthe Cook County Board. with copies to the Commissioners on the County Board and Mr. Rizki. a May 17, 2019-A meeting was held at the office of Mr. Rizki to discuss the letter and table of concerns that were delivered to the President ofthe Cook County Board. Attending the meeting were Mr. Rizki and members of his staff and various representatives from the Cook County Pension Fund. 0 September 5, 2019-The Retirement Board approved draft legislation which provides for actuarial-based funding ofthe Cook County Fund and the Forest Preserve Fund. A letter regarding the draft legislation was reviewed and approved. he letter. along with a copy ofthe draft legislation. was hand?delivered that day to the President ofthe Cook County Board. Commissioner Gainer. and Mr. Rizki. with copies to the Commissioners on the County Board. Using the format ofthe initial document prepared by Mr. Rizki and distributed to the Retirement Board on March 7. 2019. attached to this letter is an overview ofthe Board?s response to the six points articulated by Mr. Rizki. We believe this response clearly outlines the matters on which the Retirement Board would be willing to engage in further discussions with Cook County. Over the past few months, the Retirement Board has been responsive to the draft legislation presented by Mr. Rizki. providing the County with detailed written communication documenting the Retirement Board's administrative and ?duciary concerns. The Retirement Board has not received any written communication from the Cook County representatives on its concerns and whether Cook County is interested in learning more about those ?duciary and administrative concerns regarding the draft legislation. These require further discussion ifthe Fund is to avoid arriving at the vanishing point in about 2040 as shown in our attached projection of Funded Status Chart. Again. the Retirement Board wishes to reiterate that the Board believes there are opportunities for further discussion on some of the County's proposed revisions to County Employees? and Of?cers? Annuity and Benefit Fund of Cook County Forest Preserve District Employees? Annuity and Benefit Fund of Cook County p.2 Articles 9 and 10 ofthe Pension Code and we await con?rmation from the County as to whether it believes such further discussions would be bene?cial to both parties. Sincerely. he Retirement Board County Employees? and Of?cers" Annuity and Bene?t Fund ot?Cook ounty Ex of?cio for the Forest Preserve District Annuity and Bene?t Fund of Cook County c: Cook County Board of Commissioners Mr. Arnold Randall. Superintendent oi?tlie Forest Preserve District County Employees? and Officers? Annuity and Benefit Fund of Cook County Forest Preserve District Employees? Annuity and Benefit Fund of Cook County p.3 Overview of Retirement Board?s Position Regarding Cook County?s Draft Legislation Preliminary Response Regarding Legislation: 1. Actuarial funding: Actuarial funding is the number one priority of the Retirement Board. The Retirement Board is willing to discuss any actuarial- based funding that seeks to improve the long-term funding status of the Fund. Attached is Exhibit 1 that documents the projections of the Cook County and the Forest Preserve Funds, given the current statutory funding requirements. 2. Forest Preserve District: The Retirement Board is willing to discuss consolidation of the Forest Preserve Pension Fund with the Cook County Fund, assuming such consolidation is executed in a manner that protects the interests of all participants and beneficiaries and is legally and administratively feasible. 3. Shared governance: The Retirement Board is not supportive of a Taft-Hartley composition. The Retirement Board believes the elective process as defined in the current Illinois statutes best represents and aligns the interests of the participants with the Retirement Board. 4. Retiree healthcare: Healthcare for retirees has been a priority of the President of the Cook County Board and the Retirement Board. In order to ensure adequate funding, the Retirement Board is willing to discuss how best to fairly, efficiently and economically administer this valuable benefit for annuitants. 5. Permit bargained-for-exchange: This matter is not within the jurisdictional scope of the Retirement Board as defined by the pension code and is a matter best determined between the employer and representatives of active participants. The Retirement Board is willing to discuss administrative matters relating to implementation of any agreements made. 6. Fix tier II: This matter requires consideration of many stakeholders and is relevant to many retirement systems in the State of Illinois. EXHIBIT I WW COOK COUNTY FUND PROJECTION OF FUNDED STATUS 70. 00% Ill.-. 0: <9 0; um 19$ ??903 061/190) ?65 0909 $05 r195 11"} 30.00% -80.00% ~130.00% FOREST PRESERVE DISTRICT FUND PROJECTION OF FUNDED STATUS 00.00% 50.0060.00% 00.00?.?o -l 50.00% December 31. 20l8 Actuarial Valuation