The unprecedented events that have taken place in eastern Europe, with the invasion of Ukraine, by Russia have sparked global outrage and international response. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) prohibited certain investments due to a round of international sanctions. The sanctions and moral imperative are impacting pension funds across the country, as they evaluate and consider reinvesting assets which may be currently invested in Russia.
CTPF is taking similar steps to make prudent decisions regarding these assets. At this time, the Fund believes its exposure is limited, at approximately $4.5M. The Fund is working with our investment managers to understand how they are dealing with this information from a long-term investment strategy perspective.
Volatile Markets
The attack is shaking global financial markets, and we expect volatility as the markets react. Members may be concerned about the security of their pension.
“Today I want to restate for our members that even in the face of this turmoil, CTPF pensions are secure,” stated Carlton W. Lenoir, Sr., CTPF Executive Director. “When members vest, they qualify for a lifetime pension, guaranteed by the Illinois Constitution. Pensions are determined by a formula, and do not change with market conditions. There is also no immediate impact on our funded ratio. We are still on a path to 90% funding by 2059.”
CTPF utilizes professional fund managers to implement the Fund’s investment policy, designed to obtain the highest expected return on investments with an acceptable level of risk. CTPF invests prudently in a diversified portfolio designed to weather market volatility over the long term. The Fund has stress-tested this policy with a variety of scenarios and remains confident in the strategy.
CTPF is also aware that at this critical moment, the world faces increased threats to cybersecurity, and the Fund has systems and processes in place to monitor and mitigate these threats, and staff is on heightened alert for the warning signs of these attacks.
“I want to share that while we view this threat from an institutional perspective, we also appreciate and sympathize with the human cost of this tragedy,” said Lenoir. “Our metropolitan area hosts the second-largest Ukrainian population in the nation, with more than 54,000 people identifying as having Ukrainian ancestry. Chicago is a sister city to Kyiv, the capitol of Ukraine, currently under siege, and we know that this war is personal to so many who have family and loved ones in Ukraine. As citizens of the global community, we share our thoughts and prayers and wish strength and support to the heroic people of Ukraine during this difficult and uncertain time.”