1999 IMRF Comprehensive Annual Financial Report

Financial Section2. Fixed AssetsFixed assets are capitalized at their cost at the time of acquisition. Depreciation is computed using the straight linemethod over the estimated useful life of the related asset. The estimated useful lives are:1) furniture: ten years, 2) equipment: five to eight years, and 3) automobiles: two years.Year ended December 31 1999 1998Equipment, furniture and automobilesBeginning balance $7,041,888 $6,845,877Additions 107,296 594,122Deletions (442,974) (398,111)Ending balance $6,706,210 $7,041,888Accumulated depreciationBeginning balance $5,515,750 $5,214,192Additions 486,792 698,705Deletions (435,020) (397,147)Ending balance 5,567,522 5,515,750Fixed assets, net $1,138,688 $1,526,1383. Lease AgreementsThe Fund leases its facilities at the Drake Oak Brook Plaza, which it owns, under an agreement with thebuilding’s management. The agreement covers the period May 1, 1993, through December 31, 2005. Thebase rent was abated until December 31, 1995. The Fund is amortizing the abated rent over the periodcovered by the agreement. Total rental expense for 1999 was $1,462,761 and for 1998 was $1,457,419.4. Risk ManagementIMRF carries commercial, business, and automobile liability insurance coverage provided by private insurancecarriers. These policies limit the risk of loss from torts; theft of, damage to, and destruction of assets; errors andomission; injuries to employees; and natural disasters. There have been no material insurance claims filed orpaid during the last three years. The Fund is also exposed to investment risk. This risk is limited bydiversification of the portfolio, establishment and monitoring of investment policies and guidelines, andmonitoring of investment performance. In addition, investment consultants and fiduciary counsel monitor theFund’s activities and advise the Board of Trustees.5. ContingenciesIMRF is a defendant in a number of lawsuits which, in management’s opinion, will not have a material effect onthe financial statements.G. Ten-Year Historical Trend InformationTen-year historical trend information designed to provide information about IMRF’s progress made inaccumulating sufficient assets to pay benefits when due is presented as required supplementary informationfollowing the footnotes.28 Illinois Municipal Retirement Fund