ATRS hires veteran staffer, IT chief to lead state’s largest retirement fund

Arkansas Teacher Retirement System (ATRS) trustees on Wednesday (Oct. 31) hired veteran staffer Clint Rhoden as its new executive director, replacing longtime ATRS chief George Hopkins who will retire at the end of the year.

In a statement on the ATRS website, ATRS Board Chairman Jeff Stubblefield said Rhoden was hired from a pool of 26 applicants from a nationwide search that was then whittled down to six leading candidates.

“Mr. Clint Rhoden was the unanimous choice for executive director after the interviews were concluded. The Board was highly impressed with Mr. Rhoden’s 17 years of work under the ATRS umbrella including his leadership in the last 4 years as a part of the executive team under the current executive director,” said Stubblefield. “Mr. Rhoden’s background, skill set and dedication stood out to the (ATRS) board.”

As the system’s new chief executive, Rhoden will bring 17 years of experience with ATRS to his position. As the former head of the retirement fund’s IT team, Rhoden is credited with saving ATRS millions of dollars by developing internal software and migrating away from expensive third-party software.

“As Executive Director of ATRS, I will continue to focus on providing exemplary member service for all ATRS members, continue and expand member outreach, and maintain day-to-day business as usual with the help of an outstanding staff already in place,” Rhoden, a Sheridan native, said in a statement.

The ATRS board said Rhoden also has as extensive knowledge of the day-to-day operations of ATRS including member issues, ATRS legislation, actuarial analysis, ATRS investments. He was also a key member of the current executive director’s policy team and has obtained Juris Doctorate degree that he earned while working at ATRS due to the legal issues he had to address, Stubblefield said.

HOPKINS’ LEGACY
Hopkins took over the helm at ATRS in December 2008, two months after former ATRS executive director Paul Doane submitted his resignation during a Legislative Joint Audit Committee meeting that questioned him about travel expenses and reimbursements.

Hopkins, a former State Senator from Malvern who once chaired the Joint Public Retirement Committee, said leadership problems and mounting financial woes had caused the ATRS board to lose the support of then-Gov. Mike Beebe and the Arkansas General Assembly.

“When the board voted to hire me on Dec. 2, 2008, when I came onboard and in my talking with Dr. (Ralph) Abernathy, he emphasized ATRS had some issues and he wanted me to look at the system from all sides and figure out what we could do to restore faith in the system and the General Assembly, the governor’s office and especially with our members,” Hopkins recalled in a previous interview with Talk Business & Politics.

Under Hopkins’ tenure, the ATRS system has returned to full solvency after nearly serious financial troubles following the Great Recession. At the end of fiscal 2009, the system’s net assets had fallen to $8.8 billion with an unfunded liability of more than $3 billion, or 75.7%. At the time – when there was a total of 115,870 ATRS participants, including 28,818 retirees, 4,631 T-DROP participants and more than 70,000 active members – the system saw total investment declines of 18.7%.

According to ATRS’ investment summary as of June 30, 2018, the market value of the teacher retirement fund is now at $17.3 billion, up 11.6% or $1.2 billion from $16.11 billion in the same period of fiscal 2017. In just the first half of fiscal 2018, the system has seen robust investment earnings of $585 million.

Hopkins has also increased the number of “deal flow” opportunities in Arkansas and collaborative efforts with the state’s economic development arm. In July 2016, Hopkins urged the ATRS board to hire Little Rock-based Stephens Inc. and New York City-based Neuberger Berman Alternative Advisers to manage the newly created Arkansas Opportunity Fund. That fund provides opportunities for companies seeking investments between $5 million and $12 million, but is authorized to make investments up to $100 million.

The system’s first eye-opening investment in Arkansas occurred in 2013 when the system decided to take a 20% interest in the ground-floor investment of $800 million to finance production facilities for Big River Steel. That deal included an initial investment of $60 million with an option to invest up to $125 million.

Since then, ATRS has also invested in two other large economic development projects that were targeted by state and local economic developers. In July 2016, ATRS approved a 31% equity stake worth $25 million in Highland Pellet Inc., the East Coast investment group behind the state’s first full-scale wood pellet mill in Pine Bluff.

Three months later, the system approved an additional $26 million investment to help Highland refinance its long-term debt. That deal also allowed Highland investors to make scheduled payments on a contract with Chattanooga, Tenn.-based Astec Industries to deliver and construct the company’s modular, multi-line manufacturing plant in Jefferson County.

Earlier this year, the ATRS board backed another $150 million Highland loan that originated with a Wall Street investment group that offers financing for large infrastructure projects mainly in the power and energy sectors. Originally set to be operational in late 2017, construction on Highland’s Pine Bluff plant has seen several delays due to ongoing loan negotiations between New York-based Global Infrastructure Partners, Astec, ATRS and other investors in the project.

Hopkins and the ATRS board have also come under fire from some state lawmakers on the system’s participation in several class action litigation involving initial public offerings and other Wall Street investments. In April, ATRS reached a $35 million pact with Facebook Inc. and other class-action plaintiffs concerning allegations that the social media giant propped up growth projections ahead of its much-anticipated initial public offering (IPO) in the summer of 2012.

In August 2016, ATRS also participated as a lead plaintiff in a $300 million lawsuit with Wall Street financial service giant State Street Corp. A month later, ATRS filed a lawsuit against Tesla Motors to halt the electric carmaker’s $2.6 billion acquisition of SolarCity Corp. That lawsuit-filled deal eventually closed in November 2016.

Since first announcing his retirement on Oct. 1, Hopkins has shied away from interview requests concerning his efforts to pull the state’s largest public retirement fund out of the red over the past decade. He told Talk Business & Politics last week that the focus should be on the new executive director.

“My time at ATRS is winding down. I think the vision and leadership of the new executive director are the important things now,” said Hopkins. “My Daddy died over 42 years ago when I was 18. I will follow the advice he gave me a few days before he died. He told me to work extra hard, cut my own path, work cooperatively, share credit, and let the results speak. His advice leads me to humbly and gratefully retire from ATRS without trying to claim the accomplishments of the ATRS Board and ATRS staff are mine.”