Ethics
Code: Article VII
"Timely and energetic execution of fiduciary
responsibilities is to be pursued at all times by the IMRF trustees
and staff."
The quest for excellence is the essence of due care. Due care requires
trustees and staff to discharge fiduciary responsibilities with competence
and diligence. Competence is derived from a synthesis of education
and experience. It begins with a mastery of a common body of knowledge
which is required of all trustees and staff.
Accordingly, trustees and staff have the duty to educate themselves
on a continuing basis on all aspects of fund operation, in order to
be in compliance with the prudent person/expert standard to which they
are called, and to be involved in those functions which require action
in the operation of fund business.
Rules
and Interpretations
Rule 7.01 Trustees and staff should act in a prudent manner
which includes:
- Employing proper methods to investigate, evaluate and structure
the investment;
- Acting in a manner as would others who have a capacity and familiarity
with such matters; and
- Exercising independence when making investment decisions.
Rule 7.02 Trustees and staff have an obligation to learn,
comprehend and remain abreast of all component aspects relating to
the discharge of their duties through attendance and participation
in classes, workshops, forums, seminars and conferences which afford
the trustees and staff the opportunity to become familiar with the
necessary expertise to exercise independent enlightened judgment on
matters regarding IMRF business.
Trustees must obtain, at a minimum, at least
8 hours of ethics and fiduciary training annually.
This training may be on topics of ethics, finance, investments, actuarial
and accounting principles, and other issues of pension fund administration.
Rule 7.03 When a trustee or staff member does not possess the
education, experience, or skill required to make a decision concerning
any operation of the plan, he or she, due to the applied prudent standards
of fiduciary trust law, has an affirmative duty and an obligation to
seek independent counsel in making the decision.
The failure to seek outside counsel is imprudent when, under the circumstances
then prevailing, a prudent trustee or staff member acting in like capacity
and familiar with such matters would seek such counsel.
A trustee or staff member unfamiliar with an unusual or difficult investment
is charged with making an independent inquiry into the merits of the
particular investment rather than relying solely upon the advice of others.
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