Illinois State Universities Retirement System, Champaign, has adopted a set of legislative principles — sort of "thou shall" and "thou shall not" tenets for trustees and staff to use as a guide for determining and communicating SURS' position on legislative proposals.
The idea is to provide a consistent framework for trustees and staff to use in evaluating legislative proposals, said Dan M. Slack, executive director of the system, which consists of a $15.3 billion defined benefit plan and a $475 million 401(a) plan.
One principle is: "SURS investments should not be constrained by legislative restrictions, mandates or directives other than the trustee's fiduciary duties." That's because "political or economic mandates can reduce the likelihood of success in optimizing investment return." Others include: "Legislatively promised contributions should never be cut or delayed" and "Current and proposed benefits should be paid as they accrue."
The idea came from Kelly Jenkins, who joined SURS last May as its general counsel, and then the trustees expanded on it, Mr. Slack said. One issue they were reacting to was the state law forcing public funds to divest their Sudan-connected investments this year. Also, years of legislative chronic shortchanging of contributions have left SURS only about 68% funded.