Section 2500.50 Investment Policy

Section 2500

Section 2500.50  Investment

Policy

a)         The

Treasurer will select the investment options to be offered by the Pool to the account

owners.

The Treasurer shall develop, publish, and implement an investment

policy covering the investment of the moneys in each of the programs in the

Pool. The policy shall be published each year as part of the audit of the Pool

by the Auditor General.  The policy shall be distributed to all account owners

in each program. The Treasurer shall notify all account owners in the program

in writing, and the Treasurer shall publish, in a newspaper of general

circulation in both Chicago and Springfield, any changes to the previously

published investment policy at least 30 calendar days before implementing the

policy.

[15 ILCS 505/16.5(g)]

b)         The

investment policy is a written statement describing the risk management and

oversight program and should be designed to:

1)         ensure

that an effective risk management process is in place to monitor the risk

levels of the Pool;

2)         ensure

that risks taken are prudent, properly managed, and adequately compensated

compared to applicable performance benchmarks and standards;

3)         describe the Treasurer's

investment objectives; and

4)         describe

the process of evaluating performance of employees and contractors that provide

investment management services to the Pool.

c)         The

Treasurer will utilize the following investment principles when constructing,

evaluating, and selecting the investment framework, investment options, and

investment funds for the Pool:

1)         Low

Cost –

The Treasurer must use his or her best efforts to keep fees as low as

possible and consistent with the administration of high quality competitive

college savings programs

.

c)         The

Treasurer will utilize the following investment principles when constructing,

evaluating, and selecting the investment framework, investment options, and

investment funds for the Pool:

1)         Low

Cost –

The Treasurer must use his or her best efforts to keep fees as low as

possible and consistent with the administration of high quality competitive

college savings programs.

[15 ILCS 505/16.5(e)]

2)         Open

Architecture – The Pool's investment framework shall utilize an open

architecture plan design, meaning it shall not be required to select

proprietary investment funds or investment options.  The open architecture

design shall allow the Treasurer to select the underlying investment options

and investment funds. The open architecture design is intended to provide the Treasurer

with:

A)        Access

to best in class portfolio managers;

B)        The

ability to use nonproprietary products;

C)        Increased

flexibility when choosing underlying investment strategies; and

D)        The

ability to minimize account owner fees on underlying investment funds and

accounts.

3)         Various

Investment Options – The Pool's investment options may include, but are not

limited to:

A)        Dynamic

age-based portfolio;

B)        Static

portfolios with varying target allocations (i.e., aggressive, moderate or

conservative risk profiles); and

C)        Individual

fund portfolios.

4)         The

portfolios listed in subsection (c)(3) may include some or all of the following

asset categories:

A)        Deposits

with financial institutions (e.g., FDIC-insured savings accounts);

B)        Short-term

investments (e.g., money market funds);

C)        Fixed

income investments;

D)        Real

estate investments;

E)        Domestic

equity investments; and

F)         International

equity investments.