The Oregon Investment Council voted Thursday to name Portland developer John Russell to replace the board’s outgoing chair, Rukaiyah Adams.

Gov. Kate Brown has appointed Cara Samples, the chief financial officer for Fulcrum Wealth Management, to fill the empty seat on the council. The appointment requires Senate confirmation.

Adams, chief investment officer at Meyer Memorial Trust, was originally appointed to the five-member citizens panel that oversees investment of the state’s pension fund assets in 2013. She has been chair since Feb. 2017.

The investment council doesn’t control the administration of the Public Employees Retirement System or set the system’s assumed earnings rate – both responsibilities of the PERS Board.

Instead, the council sets investment policies for the fund, allocates its investments among various asset classes, approves outside money managers selected by Oregon State Treasury staff, and tries to manage the fund to achieve the assumed rate – currently 7.2% – while minimizing risk.

Nevertheless, Adams has been an outspoken advocate of the state taking action to shore up the underfunded system, calling on the governor and legislature to take immediate steps to deal with what she said was becoming “a moral issue.”

The governor has proposed a number of ways to pump more money into the system, but legislators have made little headway, choosing instead to delay the repayment of the system’s debt to lessen its immediate burden on schools and other public services.

At the end of 2019, entering the 12th year of an economic expansion and financial bull market, the pension system had about 73 cents in assets for every dollar in liabilities, with a funding deficit of $24 billion. The investment portfolio generated returns of 13.6% in 2019, an average 6.8% over the last two years and 7.5% during the last five years.

During Adams’ tenure on the board, treasury’s investment division has undergone substantial institutional changes, formalizing and professionalizing what had been a more ad hoc and sometimes dysfunctional organization dominated by long-tenured personalities. In the process, the division has added staff, beefed up its back office, and pulled more investment management in-house, versus using more expensive outside managers.

Over the same period, the board and treasury staff under Chief Investment Officer John Skjervem have taken steps to diversify the pension fund’s investment portfolio and lower its risk profile. Time will tell whether that strategy delivers higher or more consistent returns.

Members of the board and Treasurer Tobias Read congratulated Adams Thursday on her “consistent and courageous” leadership on the board. She said she pleased with the growth of the division, its new diversity, and staff’s commitment to embrace the organizational changes that had taken place.

Adams has recently clashed with Read and his staff over attempts to add pro-union management rules in the properties in which the pension fund has a controlling interest, a move that Adams considered political meddling in the council’s affairs. Read is up for reelection in November and is mentioned as a potential candidate for governor - elections in which he will be vying for union support. The disagreement was first reported by Willamette Week.

Nevertheless, Adams said Thursday that she had no big concerns about the way the investment division and board operate, but that the state continues to need a deep conversation about the way it funds the pension plan.

Russell, the president of Russell Development Co. and a fixture in Portland political circles, was appointed to the board in 2015. His term will expire in March 2023.