The state of Illinois has launched its pension plans into the electronic age. The Illinois State Department of Insurance, along with Evare Portfolio Management and Communications Software, has developed an intranet system by which pension funds statewide can monitor compliance, perform investment accounting functions and execute trades.
"This could end up being something other states will want to look at," said Thomas R. Jones, deputy director of the public pension division of Illinois, Springfield.
The state's 564 pension funds can use the system, called Winternet, to file 1998 annual statements. For funds with less than $2.5 million in assets, a separate service unit will accept faxed statements and transfer them electronically to the system.
Winternet also will provide links to pension fund custodians, brokers, investment advisers and actuaries, as well as serve as a hot line between pension funds and state regulators.
Custodian Citibank will be the first outside provider to be able to log on to the system. The holdings of each fund will be verified automatically by the custodian and earnings will be calculated daily. The state and Evare have been testing the linkup with the bank and expect the system to be fully operational in the first quarter.
In the future, fund officials will have trading capabilities through selected brokerage houses, said Craig Welch, president of Evare, Burlington, Mass. The brokerage ties should be in place in the first quarter as well, rolling out a full range of services by midyear.
The impetus for Winternet was legislation that now allows Illinois' police and fire pension funds to invest in equities. With the new law, officials wanted to make sure they had a better way to monitor compliance, Mr. Jones said.
The paperless system will be able to red-flag compliance problems instantly. Previously, the state was forced to follow a complicated audit trail.
Evare officials hope to promote the package nationally, and are talking with other state officials.
