1999 IMRF Comprehensive Annual Financial Report

Financial SectionC. Cash1999 1998Carrying amounts at December 31:Cash $6,737,785 $3,036,204Bank balances at December 31:Custodial credit risk category 1 $4,004,316 $4,297,082Custodial credit risk category 3 5,869,695 1,783,349$9,874,011 $6,080,431All non-investment related bank balances at year-end are insured or collateralized with securities heldby the Illinois State Treasurer or agents in the name of the State Treasurer. The Illinois State Treasurer isex-officio Treasurer of the IMRF. These balances are classified as custodial credit risk category 1 as definedby GASB Statement 3. Cash held in the investment account is neither insured nor collateralized. Thesebalances are classified as custodial credit risk category 3 as defined by GASB Statement 3.D. Investments1. Investment PoliciesThe Illinois Pension Code prescribes the “prudent expert rule” as IMRF’s investment authority, effectiveAugust 25, 1982. This rule requires IMRF to make investments with the care, skill, prudence and diligence,under the circumstances then prevailing, that a prudent person acting in a like capacity and familiar with suchmatters would use in the conduct of an entity of like character with like aims. Within the “prudent expert”framework, the Board of Trustees adopts investment guidelines for IMRF investment managers. TheInvestment Section contains a summary of these guidelines.2. Investment SummaryIMRF’s investments in securities are categorized below to give an indication of the custodial credit risk level.GASB Statement No. 3, Deposits with Financial Institutions, Investments (including Repurchase Agreements) andReverse Repurchase Agreements, defines “securities” and standard categories of custodial credit risk.A security, for purposes of classification below, is a transferable financial instrument that evidencesownership or creditorship. “Securities” do not include investments made with another party, real estate ordirect investments in mortgages or other loans. Investments in open-end mutual funds are also not consideredsecurities for purposes of custodial credit risk classification. Such investments are shown below as “notcategorized.” Some pending purchases of stocks and fixed income securities are shown as “not categorized”because the securities purchased have not been delivered and cannot be registered.Securities are divided among three categories indicating the type of custodial credit risk.Category 1: Insured or registered, or securities held by the entity or its agent in the entity’s name.Category 2: Uninsured and unregistered, with securities held by the counterparty’s trust department oragent in the entity’s name.Category 3: Uninsured and unregistered, with securities held by the counterparty, or by its trustdepartment or agent but not in the entity’s name. Pending security purchases are thesecurities IMRF holds in this category.The following tables present a summary of the Fund’s investments and related category of custodial creditrisk at December 31, 1999 and 1998.22 Illinois Municipal Retirement Fund