Topic:	IMRF Board
Subtopic:	Ethics
Date:	1/28/1997
Status:	Active

(Retained for Historical Purposes)

ETHICS CODE FOR THE BOARD OF TRUSTEES AND STAFF OF THE ILLINOIS MUNICIPAL RETIREMENT FUND

Preamble

IMRF is administered by a Board of Trustees comprised of representatives of sponsoring employers, participants and annuitants. The members of the Board of Trustees and IMRF staff hold the highest positions of trust because they are stewards of retirement assets. They are also persons who by their mere position are required to exercise diligence and prudence. Their duties require attention to fiduciary standards. Those fiduciary standards extend to consultants and financial advisors who serve in the administration of the goals and objectives of IMRF.

Mission Statement

(40 ILCS 5/7-102)

It is the mission of this Fund to efficiently and impartially develop, implement and administer programs that provide income protection to members and their beneficiaries on behalf of participating employers in a prudent manner.(Adopted January 28, 1997)

Guiding Principles

1. Service to the beneficiaries of IMRF is the primary function of the Board of Trustees and IMRF staff.
2. The Board of Trustees and IMRF staff are ultimately responsible to the beneficiaries of IMRF.
3. In those situations where the law is not clear, the best interests of IMRF beneficiaries must be served. Conscience is critical. Good ends never justify immoral means.
4. Efficient and effective administration and investment management is basic to IMRF. Misuse of influence, fraud, waste or abuse is unacceptable conduct.
5. Safeguarding the trust of fund participants is paramount. Conflicts of interest, bribes, gifts or favors which subordinate IMRF Trustees or staff to private gains are unacceptable.
6. Service to IMRF participants demands special sensitivity to the qualities of justice, courage, honesty, equity competence and compassion.
7. Timely and energetic execution of fiduciary responsibilities is to be pursued at all times by the IMRF Trustees and staff.

General Provisions

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.

Article II “The Board of Trustees and IMRF staff are ultimately responsible to the participants of IMRF.”

Participants rely on and expect trustees and staff to act with integrity, objectivity, and due care. Integrity is an element of character. Integrity will not accommodate deceit or subordination of principle. Integrity is measured in terms of what is right and just. Integrity requires a trustee to observe the principles of objectivity, independence and prudence.

Objectivity is a state of mind, a quality that lends value to a trustee’s services. It is a distinguishing factor in the profession of public pension administration. The principle of objectivity imposes the obligation to be impartial and intellectually honest. Independence precludes relationships that may appear to impair a trustee’s objectivity in rendering fiduciary services. Subordination of judgment is to be avoided.

The maintenance of objectivity and independence requires a continuing assessment of fiduciary responsibility.

Possession of these attributes by trustees and staff will allow them to serve the uncompromising interest of participants of public pension funds in a responsible manner.

Article III “In those situations where the law is not clear, the best interests of IMRF participants must be served. Conscience is critical. Good ends never justify immoral means.”

Increasingly, we as a society look at the law to define right and wrong, moral and immoral; the notion that law sets the floor rather than the ceiling receives little credibility. By the same token, the tendency to focus on the law leads to a withering of interest and concern for the ethical. The implicit assumption increasingly becomes that, if government has not forbidden it, it must be acceptable. This results in increased dependence on legal process to define the limits, and the game becomes one of avoidance and loophole closing. The result is fundamental change in the mores of society.

Trustees and staff must decide, consciously and deliberately, what role ethical considerations will play in the decision making they are required to undertake. What is legal and what is ethical are not synonymous. If we tend to resort as trustees and staff to legality as our birth line, then ethics will wane and the legal technician will flower. If we take this route we are not being ethical. We avoid responsibility we should not avoid. Perhaps we would not be judged to be immoral but certainly we would be amoral or lacking moral fiber.

Maintaining the trust of those we serve requires more than adherence to minimal legal standards.

Article IV “Efficient and effective administration and investment management is basic to IMRF. Misuse of influence, fraud, waste or abuse is unacceptable conduct.”

Pension fund administration generally falls within the purview of a system’s retirement board. Elected board members come from all facets of life and the responsibilities may or may not be foreign to the elected or appointed trustee.

Nonetheless, the requirement that a pension fund operate within the cornerstones of efficient and effective administration is essential.

Accountability is paramount in the public sector. The assets of the fund belong to the trust and by design are earmarked by law for the plan participants and their beneficiaries. The genesis of public scrutiny comes not from an inherent mistrust of the trustees, who by the very nature of their name connote a superior duty of care. Rather, the mistrust is often associated with the involvement of government. There is often no distinction between the public’s opinion of a trustee and that of a government official. Particularly today as we are undergoing the most significant transformation of government-from strong central government which people perceive to lend itself to corruption, waste and inefficiency, to a government of local control where accountability can be measured, and efficient and effective management can be restored.

The resulting impact of the transformation of government does not spare the trustee. Instead, the scrutiny has intensified, particularly in light of recent debacles in the investment of governmental funds by entities lacking in oversight and efficient administration. Even though these failures are not in the pension domain, still the perception persists that since trustees are overseeing funds representing billions of dollars, they are grouped together and are guilty by monetary association. Aggravating the situation are isolated instances of trustee abuse which are exploited by the media resulting in the public’s perception that there is a need to regulate the administration of public pension funds. The public perceives that there is a need to avoid what has transpired in central government, to avoid mismanagement, waste and inefficiency.

Trustees not only have to deal with accountability demanded by the public at large, they must also be accountable to their peers, to their participants and beneficiaries. This accountability not only extends to their role of representation, but it involves a myriad of responsibilities in order to effectuate the type of efficient administration expected by the law and by the constituents of the fund. To avoid the perception of misuse of influence the trustee must be willing to adopt rules and regulations that inhibit that type of activity. Furthermore, trustees must adopt policies and procedures that eliminate waste and embrace the concepts of sound cost effective measures, both as to their administrative staffs and as to their personal involvement as trustees.

Among the major areas of responsibilities that trustees must deal with are the following: the establishment of investment objectives, policies and guidelines to regulate the investment of the pension assets; the adoption of accounting standards and controls; the adoption of sound actuarial standards; the formation of procedures for internal reporting and control; the duty of providing benefits in a responsible fashion that does not cause an undue burden to the taxpaying community nor to the individual member; and compliance with the overall duties of the office.

Trustees must have the flexibility to interface with other members of the pension community whose actions can greatly impact the operation of a fund, to wit, auditors, consultants, financial advisors, oversight boards, and state and local government personnel and officials.

When government downsizes, effective management and administration presents a significant challenge which must be met and which must be preserved from erosion due to undue influence, fraud, waste or abuse.

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.

Article VI “Service to IMRF participants demands a special sensitivity to the qualities of justice, courage, honesty, equity, competence and compassion.”

Forms of conduct permissible for those acting at arms length should be forbidden to trustees and staff bound by fiduciary ties. A trustee or staff member is held to something stricter than the morals of the market place. Not honesty alone but fine, exacting observance of honesty is the standard of behavior. Undivided loyalty without disintegrating erosion of particular exceptions to the interests of participants is what is required.

Good faith requires that personal biases be cast aside and the objectivity regarding plan participants and their beneficiaries be uppermost in the conduct of the trustee and staff. Good faith requires that the trustees and staff have understanding, experience, and the ability to appreciate the nature of the decisions that are required. Trustees and staff are required to exercise care, skill and diligence.

Recognizing that others may lack the political courage and willingness to make tough decisions and avoid making pension assets vulnerable, public pension trustees and staff must be ever vigilant to protect against erosion of public pension fund assets. They must insist on funding levels, from whatever source, that guarantee the employer’s promise of security and efficient administration of investments and adequate funding levels.

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

Guiding Principle I “Service to the Participants of IMRF is the Primary Function of the board of Trustees and IMRF staff"

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.

Guiding Principle II “The Board of Trustees and IMRF Staff Are Ultimately Responsible to participants of IMRF.”

Rule 2.01 Trustees and staff must remove personal bias and function with total objectivity. Trustees and staff are bound to the principal of fairness for, by their work, the balance of a member’s dedicated career is molded to the obligation of the employer to provide security in retirement.

Trustees and staff as decision makers must be persons of conscience and intellectual discipline who shall objectively and fairly judge matters that affect participants of IMRF.

Trustees or staff can be shown to be biased if he or she does not have the ability to set aside personal feelings in deciding a matter involving a participant of IMRF.

The prejudice of a single trustee will taint the action of an entire board. To avoid this result the trustee should recuse him or herself from the matter at hand.

Rule 2.02 Arbitrary and capricious interpretations of IMRF statutes must be prevented by an exercise of independent judgment supported by substantial evidence.

The interpretation of the Illinois Pension Code made by trustees or staff should neither be irrational nor unreasonable.

Guiding Principle III “In those situations where the law is not clear, the best interests of IMRF participants must be served. Conscience is critical. Good ends never justify immoral means.”

Rule 3.01 Trustees and staff must call upon the cornerstones of fair play in evaluating every decision made as a trustee or staff member. When the law is unclear, the decision must rest with the analysis of the evidence viewed against the backdrop of one’s conscience.

A fiduciary relationship exists where there has been some special confidence reposed in one who in equity and good conscience is bound to act in good faith and in regard to the one reposing confidence.

Guiding Principle IV “Efficient and effective administration and investment management is basic to IMRF. Misuse of influence, fraud, waste or abuse is unacceptable conduct.”

Rule 4.01 Notice and Hearing. Notice and opportunity to be heard are core components necessary to be provided to participants when benefits may be deprived by the action of a board of trustees.

Three factors should exist in administrative proceedings impacting benefits of IMRF members:

1. Pre-termination notice,
2. An opportunity to respond in writing prior to the termination,
   and,
3. A post-termination evidentiary hearing.

Guiding Principle V “Safeguarding the trust of fund participants is paramount. Conflicts of interest, bribes, gifts or favors which subordinate IMRF trustees or staff to private gains are unacceptable.”

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.

Guiding Principle VI “Service to IMRF participants demands special sensitivity to the qualities of justice, courage, honesty, equity, competence and compassion.”

Rule 6.01 Trustees and staff must protect the retirement fund by complying with every provision of the trust document as created by the Illinois Pension Code.

Trustees and staff shall protect IMRF. In carrying out this mandate, trustees and staff are held to the highest standards of fiduciary conduct.

A practical application of a protection duty requires that trustees and staff meet the responsibility to maintain the terms of the trust as spelled out in the statute.

Guiding Principle VII “Timely and energetic execution of fiduciary responsibilities is to be pursued at all times by the IMRF Trustees and staff.

Rule 7.01 Trustees and staff should act in a prudent manner which includes:

1. Employing proper methods to investigate, evaluate and structure the investment;
2. Acting in a manner as would others who have a capacity and familiarity with such matters; and
3. Exercising independence when making investment decisions.

Rule 7.02 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 trustees and staff further 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.

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.

Standards of Conduct and Conflict of Interest

IMRF Trustees and staff shall not:

1. accept or solicit any gift, favor, or service that may reasonably tend to influence them in the discharge of official duties or that they know, or should know, is being offered with the intent to influence their official conduct;
2. accept other employment or engage in a business or professional activity that they reasonably expect would require or induce them to disclose confidential information acquired by reason of their official position;
3. accept other employment or compensation that could reasonably be expected to impair their independence of judgment in the performance of their official duties;
4. make personal investments that could reasonably be expected to create a substantial conflict between their private interests and the interests of the plan participants and beneficiaries; provided, however, no trustee or staff member is precluded from making any personal investment that will not create a substantial conflict.
5. intentionally or knowingly solicit, accept, or agree to accept any benefit for having exercised their official powers or for having performed their official duties in favor of another;
6. transact any business in their official capacity with any entity or person in which they have an economic interest;
7. appear before the body of which they are a member while acting as an advocate for himself or any other person, group, or entity;
8. represent any business entity before the Board of Trustees, for pay;
9. represent, directly or indirectly, any business entity in any action or proceeding against the interest of the Board of Trustees, or in any litigation in which the Fund is a party;
10. use their official position to secure a special privilege or exemption for themselves or others or to secure confidential information for any purpose other than official duties; on
11. intentionally or knowingly disclose any confidential information gained by reason of their position concerning the property, operations, policies or affairs of the Board of Trustees, or use such confidential information for pecuniary gain;
12. represent a firm or solicit business on behalf of a firm (including affiliates) for whom he or she previously voted in favor of entering into a business relationship or negotiated or signed a contract binding IMRF for a period of two (2) years following the term of office or employment;
13. solicit donations for charities, not for-profit organizations and other causes from any person, organization or entity which does, has done or may do business with IMRF, including but not limited to, investment advisors and managers;
14. solicit or accept political contributions or donations for himself or herself or others from any person, organization or entity which does, has done, or may do business with IMRF, including but not limited to, investment advisors and managers; nor may he/she solicit or accept political contributions or donations from employees or IMRF; or
15. profess or imply that he/she has the endorsement of IMRF with respect to any candidacy for which he or she is running.

Interpretation of Policy (Determination of Substantial Interest)

An individual has a substantial interest in a business entity if he or she or his or her spouse:

1. has a controlling interest in the business;
2. owns more than 10 percent of the voting interest in the business entity;
3. owns more than $25,000 of the fair market value of the business entity;
4. has a direct or indirect participating interest by shares, stock, or otherwise, regardless of whether voting rights are included, in more than 10 percent of the profits, proceeds, or capital gains of the business entity;
5. is a member of the board of directors or other governing board of the business entity;
6. serves as an elected officer of the business entity; or,
7. is an employee of the business entity.

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.

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.
• Special Missions:
  • usually involve excursions to foreign lands to provide trustees with an otherwise unobtainable learning experience and which increases the trustee’s perspective to the global marketplace.
• Trustee Training:
  • usually reserved for new trustees to acquire the basics of trust law and fiduciary requirement, as well as matters involving finance, administrative and actuarial issues.
  • sometimes good for tenured trustees to revisit as a refresher, particularly on the heels of new case law.

Travel Policy

I. STATUTE [Ill.Rev.Stat. 40 ILCS 5/7-174(g)]

Trustees shall serve without compensation, but shall be reimbursed for any reasonable expenses incurred in attending meetings of the Board and in performing duties on behalf of the Fund and for the amount of any earnings withheld by any employing municipality or participating instrumentality because of attendance at any board meeting.

II. GENERAL POLICIES APPLICABLE TO ALL CLASSES

1. Trustees are fiduciaries, accountable to the beneficiaries of the Fund, who serve without compensation and/or financial gain.
2. "Reimbursement" of reasonable expenses means IMRF will pay back to the Trustee such expenses he or she incurs as a result of his or her activities as a Board member subject to dollar limits adopted by the Board.
3. "Documented" means submission of factual or substantial support for expenses which includes but is not limited to canceled checks, vendor receipts, charge card receipts, ticket stubs, or such other evidence acceptable to IMRF. Airplane, bus and train tickets, hotel bills and registration fee receipts, and receipts for individual meals greater than $25.00 must be submitted in order to be reimbursed. Travel agent
   itineraries and credit card receipts for airfare charges are not acceptable documentation. Auto mileage shall be documented by a statement as to departure point and destination and mileage by a direct route along major interstate highways.
4. Any expenses which a Trustee foregoes because he or she receives free or complimentary goods or services may not be reimbursed. For example, if a Trustee travels to a location other than their home town and stays with a friend or relative, they cannot be reimbursed for the equivalent value if they had stayed in an hotel.
5. Typically, travel is limited to one day before and after the day of the opening sessions and closing sessions of conferences and seminars, investment meetings and due diligence meetings. However an exception is allowed to travel earlier or later when there is a savings to IMRF in an amount which exceeds the cost of an additional nights stay plus meals and incidental expenses. Arrangements exceeding a one day variation must be approved in advance by the Board.
6. For Board meetings, Board members shall submit an itemized statement for expenses after the meeting and shall be reimbursed by Fund check. For conferences and seminars, Board members may request an advance not in excess of the estimated travel expenses, lodging, registration fee and $75.00 per day. An itemized statement should be submitted after the conference. Any difference between the advance and the itemized expenses shall be either returned to the Fund or reimbursed to the Trustee as the case may be.
7. If a trustee flies to a conference, or seminar, he or she may stop over at other cities as long as the airfare does not exceed the cost of coach fare obtained with a two week advance purchase or such other advance purchase standard recognized at that time by the airline industry. No incidental expenses at such other cities are reimbursable.

III. TRAVEL CLASSIFICATIONS

CLASS I: BOARD MEETINGS, INCLUDING BOARD COMMITTEE MEETINGS

1. TRANSPORTATION EXPENSES
   Actual transportation expenses by train, bus, airplane, cab, etc...including transportation to airport or train station and to meeting place. If all or part is by automobile, reimbursement is at $0.315 per mile or the current amount permitted by the Internal Revenue Service.
2. LODGING
   Members residing within 50 miles of the meeting place, will receive no reimbursement for lodging for a one day meeting. For a two day meeting, lodging for one night will be reimbursable.
   
   For members residing more than 50 miles from the meeting place, normally one night's lodging is reimbursable. However, if travel arrangements necessitate two nights, lodging will be reimbursed.
3. MEALS
   Actual meal expenses are reimbursable up to a reasonable amount.
4. INCIDENTAL EXPENSES
   Tips, personal phone calls, and other incidentals not specified above shall be reimbursed up to a limit of $15.00 per day for those days when overnight lodging is reimbursable.
5. OUT-OF-STATE TRAVEL
   Notwithstanding the foregoing, transportation expenses, lodging, meals, and incidental expenses will be reimbursed to a member to attend only two Board meetings or committee meetings each calendar month (not to exceed twelve such meetings in one calendar year), if travel to such meeting begins outside the State of Illinois.

CLASS II: CONFERENCES AND SEMINARS

1. PERMITTED CONFERENCES AND SEMINARS
   Board members shall be allowed to attend, at Fund expense, five pension or investment conferences or seminars each calendar year. But in no case more than two selected from the following: (a) the National Conference of Public employee Retirement Systems, (b) Government Finance Officers Association, (c) National Conference on Teachers Retirement, or (d) International Foundation of employee Benefit Plans. A Board member who wishes to attend a particular conference or seminar will submit a request which will be placed on the Board’s meeting agenda for approval.
2. TRANSPORTATION EXPENSES
   Actual transportation expenses shall be reimbursed but the amount reimbursable shall not exceed ordinary airplane coach fare. Provided, however, for international flights exceeding 10 hours, or when medically necessary or when meeting schedules prevent adequate adjustment for jet-lag, actual transportation expenses will be reimbursed for business class fare. Trustees are encouraged to make arrangements one day early in order to avoid such higher fare charges. The purchase of upgrade certificates for domestic flights including Alaska and Hawaii shall be reimbursed. For automobile travel, reimbursement shall be $0.315 per mile (or the current amount permitted by the Internal Revenue Service), but not more than the highest airfare incurred by a trustee attending the conference, or if no other trustee attends, then to an amount equal to airfare charges based on a two week advance purchase or such other advance purchase standard recognized at that time by the air line industry, plus the normal and reasonable charges which would have been incurred for transportation to and from the airport, parking, tolls and cabs at the destination. For automobile travel less than 2000 miles round trip, reimbursement shall be $0.315 per mile (or the current amount permitted by the Internal shall also be reimbursed. For automobile travel, reimbursement shall be Revenue Service).
3. LODGING
   Reimbursement for lodging shall be limited to conference or seminar hotels at conference rates for double rooms. Anyone wishing to upgrade to more expensive accommodations will be required to pay the difference. For conferences and seminars, reimbursement shall be allowed for one day prior through the one day after the conference period only at the conference hotel.
4. MEALS AND OTHER EXPENSES
   Actual expenses shall be reimbursable but the total shall be limited to $75.00 per day for all expenses other than basic transportation (airplane, train, bus, auto, cab or transportation to and from airport) lodging and convention registration. This limit shall apply to meals, tips, and incidental expenses. For conferences and seminars, reimbursement shall be allowed for one day prior through the one day after the conference period.

CLASS III: INVESTMENT SEMINARS AND CLIENT CONFERENCES SPONSORED BY INVESTMENT MANAGERS, THIRD PARTY ORGANIZATIONS OR ANONYMOUS SPONSORS

1. PERMITTED CONFERENCES AND SEMINARS
   Board members shall be allowed to attend such seminars with the approval of the Board of Trustees.
2. TRANSPORTATION EXPENSES
   If transportation costs are paid by the conference host, only actual transportation expenses from the Board member's home to the point of departure (and return) shall be reimbursable. For automobile travel, reimbursement shall be $0.315 per mile (or the current amount permitted by the Internal Revenue Service). If ground transportation at the conference destination is not provided by the conference host, the actual cost to the attendee shall be reimbursable. If transportation costs are not paid by the conference host, Actual transportation expenses shall be reimbursed but the amount reimbursable shall not exceed ordinary airplane coach fare. Provided, however, for international flights exceeding 10 hours, or when medically necessary or when meeting schedules prevent adequate adjustment for jet-lag, actual transportation expenses will be reimbursed for business class fare. Trustees are encouraged to make arrangements one day early in order to avoid such higher fare charges. The purchase of upgrade certificates for domestic flights including Alaska and Hawaii shall also be reimbursed. For automobile travel, reimbursement shall be $0.315 per mile (or the current amount permitted by the Internal Revenue Service), but not more than the highest airfare incurred by a trustee who attends, if no other trustee attends, then to an amount equal to airfare charges based on a two week advance purchase or such other advance purchase standard recognized at that time by the air line industry, plus the normal and reasonable cost which would have been incurred for transportation to and from the airport, parking, tolls and cabs at the destination. For automobile travel less than 2000 miles round trip, reimbursement shall be $0.315 per mile (or the current amount permitted by the Internal Revenue Service).
3. LODGING
   If lodging for this type of conference is provided by the conference host, it shall not be paid for by IMRF.
4. MEALS AND OTHER EXPENSES
   Because most, if not all, meals are provided by the conference host, expenses in addition to those identified above shall be reimbursable, but the total shall be limited to $15.00 per day for both U.S. conferences and for non-U.S. conferences. This limit shall apply to additional meals, tips, cab fares, and incidental expenses. Reimbursement shall be allowed for those days identified by the conference host as conference and/or travel days. Any expenses related to the acquisitions of passports, visas, etc. are not reimbursable.

CLASS V: INVESTMENT SEMINARS AND/OR MEETINGS SPONSORED BY IMRF

1. PERMITTED MEETINGS AND TRIPS
   From time to time the Board of Trustees may determine that it is in the best interest of IMRF for Board members to attend special investment educational seminars and conferences or to visit investment managers in their offices. Such conferences or meeting shall not be included in the calendar year limit of five specified under Class II paragraph A.
2. TRANSPORTATION EXPENSES
   Actual transportation expenses by bus, airplane, train, etc. to and from the point of departure shall be reimbursable as it is for Class II Meetings and Transportation. When IMRF Board Members visit investment managers at their place of business, lodging arrangements and payment shall be handled by IMRF staff.
3. LODGING
   For investment educational seminars, reimbursement for lodging shall be limited to conference hotels at conference rates for double rooms. Anyone wishing to upgrade to more expensive accommodations will be required to pay the difference. When IMRF Board Members visit investment managers at their place of business, lodging arrangements and payment shall be handled by IMRF staff.
4. MEALS AND OTHER EXPENSES
   For investment educational seminars actual expenses shall be reimbursable as they are for Class II Meals and Expenses. When IMRF Board Members visit investment managers at their place of business, meals are normally charged to room bills or paid for by staff or the investment manager. Incidental expenses including additional meals, tips, etc. shall be reimbursable, but the total shall be limited to $15.00 per day. Additional meals of a reasonable amount shall be reimbursable.
   
   Reimbursed incidental expenses and additional meal charges begin and end on the days for which transportation costs are reimbursable or provided to and from the meeting.

CLASS VI: DUE DILIGENCE MEETINGS TO INVESTIGATE INVESTMENT CATEGORIES SPONSORED BY POTENTIAL INVESTMENT MANAGERS

1. TRANSPORTATION EXPENSES
   Actual transportation expenses by bus, airplane, train, cab etc. shall be reimbursable as it is for Class II Conferences and Seminars. Reasonable expense for ground transportation coordinated by meeting sponsors will not be reimbursed.
2. LODGING
   Actual lodging expenses shall be reimbursable as it is for Class II Conferences and Seminars.
3. MEALS AND OTHER EXPENSES
   Because most, if not all, meals are provided by the meeting host, expenses in addition to those identified above shall be reimbursable, but the total shall be limited to actual expenses not to exceed $75.00 per day for both U.S. meetings and for non-U.S. meetings. This limit shall apply to but is not limited to snacks, tips, and incidental expenses. Reimbursement shall be allowed for those days identified by the meeting host as meeting and/or travel days. Any expenses related to the acquisitions of passports, visas, etc., are not reimbursable.