11-24-2004 Council Agenda - Laserfiche WebLink

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INVER GROVE HEIGHTS VOLUNTEER FIREFIGHTER'S RELIEF ASSOCIATION PENSION FUND Investment Policy Investments made by the Inver Grove Heights Volunteer Firefighter's Relief Association are to be made in a manner that seeks to insure preservation of capital in the overall portfolio. Safety of principle is the foremost objective. Liquidity and yield are also very important considerations, Since it is essential that cash is always available when needed, it is the investment goal of the Inver Grove Heights Firefighter's Relief Association Pension Fund to maximize yield while matching maturity dates with expenditure needs. All participants in the investment process (the Treasurer and Board of Directors of the Relief Association and the Merrill Lynch special account representative) are expected to act responsibly as custodians of the fund. The policy of the Inver Grove Heights Volunteer Firefighter's Relief Association, from inception until 1994, was to allow investment only in fixed income securities that were insured either by the FDIC or were direct obligations of the U.S. Government. The life of the securities were limited to short and intermediate maturities (approximately 2 to 8 years), This decision was made to allow the flexibility to be sensitive to interest rate changes and to provide the liquidity needed for paying retirees. In spring 1998, this policy was amended to diversify into high quality equity mutual funds and equity defined asset funds. The asset allocation decided upon was approximately 25% in fixed income securities (insured or government backed with short or intermediate maturities) and up to 75% in high quality equity mutual funds and equity defined asset funds. The equity portion of the portfolio may diversify into high quality foreign securities, but not to exceed 30% of the equity portfolio or 10% of the total portfolio. The policy change in 1998 is intended to increase the return on investments while remaining within reasonable, acceptable risk limits. Review of the asset allocation percentages will be made by the treasurer of the Inver Grove Heights Volunteer Firefighter's Relief Association and the Merrill Lynch investment advisor on a semiannual basis. Changes to the asset allocations are discussed and voted upon during meetings of the Board of Directors of the Relief Association. Revision Date: 7 -12 -98 7