Financial Investment News (FIN) has filed suit against the Cook County Pension Fund, alleging the Fund violated the Illinois Freedom of Information Act (FOIA) by refusing to disclose performance reviews sought by FIN.
Matt McCue, Managing Director of FIN, told the Cook County Record that the FOIA was filed as part of FIN’s “ongoing coverage of the pension fund.”
FIN submitted the FOIA request to the Pension Fund on May 14, 2015, requesting the fund’s 2014 first quarter performance review. FIN then amended its request to also include the fund’s 2014 third quarter and fourth quarter performance reviews, as well as its 2015 first quarter review.
In July 2015, the Pension Fund refused to produce the records, claiming the reviews expressed the opinions of its investment consultant, Callan Associates. Illinois’s FOIA law exempts records in which opinions are expressed.
In response to the Pension Fund’s refusal to produce, FIN submitted another request for the performance reviews, this time requesting that any opinions expressed be redacted. The Pension Fund again refused.
FIN then sued the Fund on Nov. 17 in Cook County Circuit Court.
FIN accuses the Cook County Pension Fund of “improperly withholding information on the basis of deliberative process,” and has filed a complaint asking the court to order the Fund to produce the requested records, and pay the civil penalty for violating the FOIA.
According to McCue, this type of reaction from a public pension fund is not normal.
“Each specific plan is unique,” he said. “Overall, we are able to obtain these reports from nearly all public pension funds.”
Historically, Cook County has struggled with unfunded pension liability. The unfunded liability has increased by 915 percent since 2001. In 2012, the figure sat at just under $7 billion, according to a report issued by Open Pensions.
FIN’s suit came two days before Cook County passed a 2016 fiscal budget that significantly increases its pension payment by $270.5 million, according to a November release from Fitch Bond Ratings. The payment would be funded by a 1 percent increase in the county’s sales tax.
This increase in payment is controversial, and the county remains vulnerable to potential litigation from taxpayers who challenge the constitutionality of increased tax payments to fund pensions, Fitch said.
“The county’s pension strategy is notable, as it includes actuarially determined funding of the pension liability, but appears to ignore the restrictions imposed by the current pension statute, leaving the county vulnerable to potential litigation from taxpayers challenging the increased payments,” read Fitch’s release.