Investments Under the Illinois Pension Code - Policy, Custody & Control

INVESTMENT POLICY
The Pension Code requires all pension funds to file a written Investment Policy with the Illinois Division of Insurance. An Investment Policy is a written document adopted by the board of trustees, which presents the investment goals established by the board, the strategies to be used in the pursuit of the goals, the persons designated to execute the board's policies, the entities with which the board had decided to conduct business, and the measures put into place by the board with which to evaluate periodically the success of its policies.
The Investment Policy shall be adopted by resolution of the pension board. The Policy shall be reviewed on an annual basis by the board and any modifications made thereto must be approved by the board and a copy forwarded to the Illinois Division of Insurance within 30 days.
CUSTODY OF INVESTMENTS INSTRUMENTS
1. Securities cannot be held by a broker/dealer/manager who has discretion over buying or selling securities for the fund. 2. The Investment Policy should include a clause that requires securities be held by a third party custodian designated by the pension board. 3. All trades, where applicable, should be executed via Delivery vs. Payment (DVP) to ensure that securities are deposited in the fund's custodial account prior to release of funds.
INTERNAL CONTROL OF PENSION FUND ASSETS
The pension board is responsible for establishing and maintaining an internal control structure designed to insure that the assets of the fund are protected from loss, theft, or misuse. The internal control structure shall be designed to provide reasonable assurance that these objectives are met.
ILLINOIS DIVISION OF INSURANCE - REPORTING
1. The Investment Policy - within 30 days of approval 2. Agreements with Investment Advisor/Manager - within 30 days of appointing
Full written disclosure of direct and indirect fees, commission penalties, and any other compensation that may be received by the Investment Advisor or any other person providing investment services must be filed.