Current through Register Vol. 48, No. 38, September 20, 2024
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.
[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.
