CAFR - Fairfax County Public Schools

Introduction
$ in Billions
2.0
1.5
1.0
0.5
0
Educational Employees’ Supplementary Retirement System of Fairfax county
Strategic Review and Investment Policy
The members of the ERFC Board of Trustees
have jurisdiction over and ultimate fiduciary
responsibility for the investment of the System’s
assets. In carrying out their responsibilities, they
must adhere to applicable laws, regulations, and
rulings with respect to the duties of investment
fiduciaries. Accordingly, they are required to
“discharge their duties in the interest of plan
participants” and “act with the same care, skill,
prudence, and diligence under the circumstances
then prevailing that a prudent person acting in a
similar capacity and familiar with those matters
would use in the conduct of a similar enterprise
with similar aims.” The Board of Trustees has
established a Statement of Investment Policy
that identifies a set of investment objectives,
guidelines, and performance standards for the
assets of the fund. The objectives are formulated
in response to the following:
• the anticipated financial needs of the ERFC
• consideration of risk tolerance; and
• the need to document and communicate
objectives, guidelines and standards to the
investment managers.
Investment Objectives
The investment objective of the ERFC is to
ensure, over the long-term life of the fund, an
adequate level of assets to fund the benefits for
ERFC members and their beneficiaries at the time
they are payable. The Trustees seek to achieve a
high level of total investment return consistent
with a prudent level of portfolio risk. The fund’s
actuary uses an investment return assumption of
7.5 percent, compounded annually, of which 3.75
percent constitutes an assumed rate of inflation
and 3.75 percent reflects an assumed real rate of
return on investments. The fund’s objective is to
meet or exceed the assumed real rate of return
over time, while preserving the fund’s principal.
ERFC ToTal Fund GRowTh — ValuaTion assETs sinCE inCEpTion
(As reflected in the December 31, 2011 actuarial valuation)
'73 '78 '83 '89 '94 '99 '04 '09
Fiscal Year Calendar Year
39 INVESTMENT SEcTIoN
'10
'11
INVESTMENT