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Village of Tequesta
General Employees' Retirement Plan
Investment~Policy Statement
I. PURPOSE OF INVESTMENT POLICY STATEMENT
The Pension Board of Trustees maintains that an important determinant of future
investment returns is the expression and periodic review of the Fund's investment objectives.
To that end, the Trustees have adopted this statement of Investment Policy.
In fulfilling their fiduciary responsibility, the Trustees recognize that the retirement
system is an essen±ial vehicle for providing income benefi±s ±o retired participants or their
beneficiaries. The Board also recognizes that the obligations of the Fund are long-term and
that investment policy should be made with a view toward performance and return over a
nurr-ber of years. The general investment objective, then, is to obtain a reasonable total rate
• of return -defined as interest and dividend income plus realized and unrealized capital gains
or losses -commensurate with the Prudent Investor Rule and any other applicable statute.
Reasonable consistency of return and protection of assets against the inroads of
inflation are paramount. However, the volatility of interest rates and securities markets make
it necessary to judge results within the context of several years rather than-over short periods
of two years or less.
The Pension Board of Trustees will employ a professional Investment Management
firm to invest the assets of the fund. Within the parameters allowed in this IPS, the asset
allocation of the fund is solely at the Investment Manager's discretion, including sector
weightings and investment style.
The Trustees, in performing their investment duties shall comply with the fiduciary
standards set forth in Employee Retirement Income Security Act of 1974 (ERISA) at 29
U.S.C. s. 1104(a) (]) (A) - (C). In case of conflict with other provisions of law authorizing
investments, the investment and fiduciary standards set forth in this section shall prevail.
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II. INVESTMENT PERFORMANCE OBJECTIVES
The below listed performance measures will be used as objective criteria for
evaluating effectiveness of the investment manager.
A. Total Fund Performance
The performance of the total Fund will be measured for rolling three
and five year periods. These periods are considered sufficient to
accommodate the market cycles experienced with investments. The
performance of this portfolio will be compared to the return of a
portfolio comprised of 60% Standard & Poor's 500 Stock Index, 40%
Lehman Brothers Government /Credit Intermediate Bond Index.
2. On a relative basis, it is expected that the money manager's
performance with regard to the total return of combined equity, fixed
income, and cash portfoiio, wiil be in the top 40°io of the Mobius
Universe over three to five year periods.
3. On an absolute basis, it is expected that total return of the combined
equity, fixed income, and cash portfolio, will equal or exceed
the
. actuarial earnings assumption (8 %), and equal or exceed the
Consumer Price Index plus 3% over three to five year periods.
B. Equity Performance
The equity portion of the portfolio, defined as common stocks and convertible
bonds, is expected to perform at a rate at least equal to the S&P 500
Index and be in the top 40% of the Mobius Universe.
C. Fixed Income Performance
The overall objective of the fixed income portion of the portfolio is to add
stability, consistency and safety to the total fund. The fixed income portion of
the portfolio, defined as fixed income and preferred stocks, is expected to
perform at a rate at least equal to the Lehman Brothers Government /Credit
Intermediate Bond Index, and in the top 40% of the Mobius Universe.
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