Ethics Code - Article I

"Service to the participants of IMRF is the primary function of the Board of Trustees and IMRF staff."

The Board of Trustees and IMRF staff have the obligation not only to safeguard the funds on which the plan participants’ security depends, but also to promote their rights, and to ensure the necessary services are provided for all plan participants and their beneficiaries.

This premise is embodied in the exclusive benefit rule of fiduciary law and the plan participants and beneficiaries are the constituencies to whom trustees and staff are accountable.

Adherence to the fiduciary service obligation of trustees is critical to our society in which accumulation and public commitment of resources is essential. Without the commitment to the fiduciary mandate that trustees may be relied upon to put their participants ahead of themselves, participants and employers would not be willing to commit funds to them for management. Such reticence would lead to a relatively inefficient allocation of resources, with resulting detriments to society as a whole. Consequently, the commitment by trustees to the service ideal is critical to society.

Rules and Interpretations

Rule 1.01 Trustees, and staff must serve with the highest degree of loyalty to IMRF, the plan participants and the present and future beneficiaries.

It is clear that the duty of loyalty should extend beyond a prohibition of self-dealing. Even if a trustee or staff member has no personal stake in a transaction, the duty of loyalty should bar him or her from acting in the interest of third parties at the expense of participants.

Rule 1.02 General Welfare.

The purpose of a retirement system is to establish a fund so that employees who serve a given number of years may then have an income during retirement, with the resulting beneficial effects upon the employee and the family, the institution they serve, and upon the social and economic welfare of society.

If retirement beneficiaries are divided into separate classes that bear some reasonable relationship to the objective sought to be accomplished, then trustees and staff should avoid individual discrimination by treating all persons within the same class the same way.

Rule 1.03 Entitlement.

Property interests are created by existing rules or understandings that stem from an independent source such as state law. These types of beneficiary entitlements should be vigorously defended by IMRF.

Balancing the real needs versus the perceived needs of plan participants and beneficiaries is crucial to the function of trustees and staff. The mere request for a favorable ruling by either party does not, in and of itself, justify the act nor does it accord it higher credibility than claims made by others. Decisions must not be made in isolation. They must be weighed against the overwhelming body of applicable law in order that the intent, the legality of the request and the motivation can be determined. Trustees and staff must have the intestinal fortitude to stand up to the claimant and challenge those actions not based on the law.