Policy
on Business and Educational Functions
The Board of Trustees acknowledges it is responsible for the administration
and operation of a specialized business involving great sums of money
for the exclusive benefit of the plan participants and beneficiaries
of the trust (Fund), and are responsible for defraying reasonable expenses
which arise from the performance of duties and responsibilities under
applicable trust law and universal tenets of fiduciary responsibility.
In the context of running the business of retirement systems and satisfying
on an ongoing basis the requirements embodied in the mandated standard
of prudent/expert person rules of law, one major conduit by which this
is accomplished is through travel.
One cannot, individually or collectively, adequately discharge fiduciary
duties in a cloistered state. Trustees cannot rely solely on others to
execute their fiduciary functions. While authority can be delegated,
fiduciary responsibility rests solely on the shoulders of the trustees.
The Board of Trustees strongly encourages attendance and participation
in business and educational functions which will further the performance
of duties and responsibilities under applicable trust law. At a minimum,
the trustees are required to attend at least 8 hours of ethics and fiduciary
training per year. Trustees shall annually certify to the Board compliance
with this training requirement.
Examples
of Categories and Definitions
I. Business Operations:
Business Meetings:
- Gatherings for discussions or negotiations on
potential investments.
- Formal
litigation procedures.
- Internal retreats of Board with or without
advisors or consultants.
- Instructional gatherings to develop business
acumen.
Due Diligence:
- Personal investigatory
appearances by board members to the actual site(s) of a prospective
venture, which could include the operational office of a prospective
new advisor, consultant or business venture.
- This function should be repeated with existing relationships
particularly when a material change has occurred, such as a change
in personnel.
Site Inspections:
- Primarily reserved for real estate investments in
order to "kick
the tires", meet the tenants and the property management
teams, check out the condition of the building(s) and other data
relating to any proforma items of the investment.
II. Educational
Operations:
Conferences:
- Usually week long events of an annual nature
dealing with a multitude of topics and current trends and developments
in the pension industry.
- One of the best forums within which to interact with peers
from other jurisdictions (networking).
Workshops and
Symposiums:
- Events of two to three days of sessions involving discussions
surrounding a single theme- or a specific topic or subject matter.
Trustee Ethics and Fiduciary Training
Trustees are required to attend at least 8 hours of ethics and fiduciary training
annually. Each trustee is expected to maintain adequate documentation of such
training, received in increments of no less than one-half hour of actual instruction.
Training may be conducted during Board and Board Committee meetings
and Board Roundtables, provided the topic is clearly delineated as
trustee ethics and fiduciary training.
Training may be undertaken at independent conferences, seminars and
symposiums.
Trustee ethics and fiduciary training includes presentations by staff
or consultants or training at outside seminars and conferences on topics
of:
- IMRF ethics and travel policies and best practices in the industry;
- Fiduciary duties;
- Investment issues including asset allocation, training on potential
investment vehicles, investment procedures, and best practices;
- Illinois pension Code;
- Actuarial issues, including presentations concerning the annual
actuarial report, gain/loss analysis, and triennial experience
analysis;
- Medical matters to assist in hearing disability claims;
- New trustee orientation; and
- Other issues of pension fund administration,
as determined by the Board.
Not included are presentations covering:
- IMRF processes and procedures;
- Board agenda items unless specifically delineated as a training
program.
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