1999 IMRF Comprehensive Annual Financial Report

Investments SectionInvestment Objectives and PoliciesThe Board of Trustees, operating within the “prudent person” framework, has adopted the following investmentobjectives and guidelines. The objectives and guidelines presented here are intended to be summarizations.Specific guidelines are in effect for individual investment managers.A. Investment ObjectivesThe IMRF Board of Trustees, pursuant to its fiduciary responsibilities, and in order to provide benefitsexclusively for its membership, has established the following objectives:1. To diversify the investment portfolio so as to optimize investment returns and at the same time to controlthe risk of large losses.2. To set investment and actuarial policies so as to assure the adequate accumulation of assets and achieve areasonable funded status.3. To achieve rates of return greater than the current actuarial assumption of 8 percent and to exceedinflation.4. To achieve rates of return consistent with expectations for each asset class used, without significantlychanging the expected risk profile of the asset class or the Fund as a whole.5. To achieve in U.S. equities a total return that exceeds the total return of the S&P 500 Stock CompositeIndex. In addition, the Board expects to earn a minimum of 6 percent in excess of inflation over a movingfive-year period.6. To achieve in international equities a total return that exceeds the total return of the MSCI EAFE Index.In addition, the Board expects to earn a minimum of 6 percent in excess of inflation over a moving fiveyearperiod.7. To achieve in fixed income securities a total return that exceeds the Lehman Aggregate Bond Index over amoving five-year period. In addition, the Board expects to earn a minimum of 3 percent in excess ofinflation over a moving five-year period.8. To achieve in equity real estate investments a real rate of return of 5 percent over inflation over a movingfive-year period.9. To achieve in alternative investments a 15 percent nominal return.10. To achieve in internally managed short-term securities relative performance better than 30-dayU.S. Treasury Bills.11. To minimize employer contribution volatility.12. To ensure continuing stability of employee contribution rates.13. To manage costs in an effective manner while providing high levels of service to members, employers,and taxpayers.40 Illinois Municipal Retirement Fund