US- James (Jim) Lee, chairman of the board of the US$80bn Texas Teachers' Retirement System (TRS) resigned last week in order to launch a new business venture.
Lee said: "This is a personal and business decision that Amy and I have made in light of an exciting new business venture that will require my full attention."
His resignation was announced one day before the Austin bureau of Hearst Newspapers reported Lee had a $110,000 legal judgement against him for gambling debt to the famed Las Vegas casino, the Bellagio.
The debt has already been settled, according to a source familiar with the matter, and a TRS official said the resignation is unrelated to the judgement.
TRS spokesman Jeff Hunt said of the debt: "It happened prior to his appointment at TRS. It had nothing to do with his service at TRS."
The source said Lee incurred the debt in 2005 and that there had been a dispute over the payment, but that Lee had not been aware of any legal proceedings against him until December 2008.
By that time, the Bellagio had been trying for a year to contact Lee at his Houston home. Lee, meanwhile, had moved to his New Jersey home and never received the Bellagio's correspondence.
In a letter to lee from the Bellagio, Bruce Aguilera, vice president and general counsel for the casino, wrote: "We are pleased that our dispute has been fully resolved."
According to a transcript obtained by Global Pensions, he continued: "It is regrettable we did not connect with you in Texas prior to late 2008, despite our repeated attempts. We appreciate that you moved promptly to completely resolve the dispute." Mr. Aguilera declined to comment.
About the retirement system, Lee described the past year as "a time when TRS was tested as never before by a deep and broad-based economic downturn. The board's commitment to diversification and reduced long-term risk has helped cushion the impact of recent market volatility and provided TRS with greater flexibility to navigate turbulent markets now and in the future."
Aside from its heavy push into alternative investments, the pension fund's board last year was among the first to approve investments in strategic partnerships, a set-up that typically allows managers more leeway over the types of investments they manage and input over aspects like risk management and asset allocations.
Lee has been replaced by Linus Wright, a TRS trustee since 2005.
Wright said: "I see my service on the TRS Board as one of the highest callings of my professional career. I have big shoes to fill when I succeed Jim Lee, and I want to express my gratitude to him for his leadership over the past year."
Many single-employer trust-based DC schemes will move to a master trust in coming years. Stephen Richards looks at the pitfalls they need to avoid
Robin Ellison says it is not unreasonable for schemes and their trustees and sponsors also to expect an improvement in the tone of regulation
The Pensions Regulator (TPR) has ordered a firm to pay back more than £700,000 of pension contributions after it miscalculated the amounts due for more than a year.
Insurers are set to face a "flood of requests" from pension schemes for buy-in contracts to be restructured to allow for guaranteed minimum pension (GMP) equalisation, Aon warns.