Article
V
"Safeguarding the trust of fund beneficiaries is paramount.
Conflicts of interest, bribes, gifts or favors which subordinate IMRF
Trustees or staff to private gains are unacceptable."
One can never catalogue all the conduits by which trustees or staff
may be induced to manage participant’s assets in ways that benefit
the trustee, staff member or a third party rather than the participants.
The variations on this theme are endless. However, defining how trustees
and staff should act in such situations requires no novel interpretation.
Rather, it requires recognition of the fact that trustees and staff
cannot act in accordance with the morals of the market place but must
instead meet the higher standards of loyalty, integrity and prudence.
Under the duty of loyalty, trustees and staff are required to act in the best
interest of another. Fullness of disclosure, honesty of intentions, the payment
of an adequate price, the lack of damages and in no cases ethical excuses. Honest
but imprudent trustees and staff can dissipate the assets of a fund at the same
speed as dishonest trustees and staff.
The relation between trustees or staff and participants is particularly intimate.
The participant is obliged to place great confidence in the trustee and staff.
The trustee and staff have a high degree of control over the affairs of the participant.
The relationship should be treated as one requiring the highest of moral and
ethical commitment.
Rules
and Interpretations
Rule 5.01 Trustees and staff must safeguard assets for the current
and future generations of participants.
The trustees and staff have an obligation to manage IMRF funds so
as to enable IMRF to meet its obligations not only to retirees, but
also to those scheduled to retire in the future, (members whose pension
and annuity rights will be earned over the years of active service).
To exhaust assets of an actuarially underfunded pension system on a single
class of participants violates a fiduciary obligation.
Rule 5.02 Safeguarding
Assets.
Trustees and staff are charged with statutory and common law duties
to exercise fiduciary responsibilities over assets of the fund.
Trustees and staff should only distribute assets from IMRF for the benefit of
the participants.
Rule 5.03 Conflict
of Interest.
As fiduciaries, the trustees and staff must discharge all their duties
solely in the interest of the participants and beneficiaries for the
exclusive purpose of (1) providing benefits to participants and their
beneficiaries; and (2) defraying reasonable expenses of administering
IMRF. Trustees and staff must act honestly and with undivided loyalty
to the trust and must serve the interest of all beneficiaries excluding
self interest.
Trustees and staff must not deal with the IMRF assets for their individual benefit.
Rule 5.04 Statements of Economic Interests
Trustees must file annual statements of economic interests
with the DuPage County Clerk, following the requirements of Article
4A of the Illinois Governmental Ethics Act.
| 
