Section 4430.10  Scope

This Part is applicable to all police and firefighter pension funds and pension fund boards which are subject to the provisions of Sections 1-113.1 through 113.10 of the Illinois Pension Code [40 ILCS 5/1-113.1 through 1-113.10].

Section 4430.20  Required Disclosures

No pension fund shall engage an investment advisor, registered broker-dealer, bank, insurer or any other person for the purpose of providing investment services unless the following written disclosure requirements are met:

a)         A description, expressed as a set amount or range in dollars or as a percentage of the dollar value of a particular transaction or transactions, of any and all commissions, fees, penalties, or any other items of compensation related to a particular transaction that may be received by any such person from the pension fund.  The written description must be furnished by any such person effectuating any transaction with a pension fund, and the written description need not be furnished with respect to each subsequent transaction to which the description applies.

b)         If the investment service contemplated is one which might result in the pension fund acquiring an asset from any inventory held by an investment advisor, registered broker-dealer, bank, insurer, or other person, the written engagement or contract must also include a statement disclosing:

1)         The possibility that the investment advisor, registered broker-dealer, bank or insurer may obtain a financial benefit from such sale beyond the items listed under subsection (a) above; and

2)         That the realization and extent of any such benefit is dependent upon market valuations as of the date the inventoried asset was acquired as compared to the price at which the pension fund acquires the asset; and

3)         That the pension fund should take steps to familiarize itself with the market in which any such acquisitions or investments are to be made.

Section 4430.30  Recordkeeping

When authorizing any investment transaction, every pension fund subject to the provisions of Sections 1-113.1 through 1-113.10 of the Illinois Pension Code shall:

a)         Establish, maintain and file with the Pension Division of the Department of Insurance by no later than April 1, 1998, its current investment policy as required by Section 1-113.6 of the Illinois Pension Code.  In addition, every pension fund shall file revisions to its investment policy with the Pension Division of the Department of Insurance 30 days after such revision is adopted by the pension fund board; and

b)         Establish and maintain such books, receipts, confirmations, statements, or other records in sufficient detail to verify and support all annual statements and investment and financial reports required to be filed with the Pension Division.  Such records shall include, but are not limited to, any of the following records received by the pension fund:

1)         The minutes of any meeting of the board wherein investment matters are discussed;

2)         All correspondence, orders or directions to or from any person providing investment or custodial services;

3)         Any documentation concerning the letting and acceptance of bids for investment services;

4)         Any bank or brokerage policy, contract or other account statement reporting the status of a pension fund investment;

5)         Any receipt, confirmation, transmittal advice, binder or other record which confirms, verifies or reports any investment transaction; any investment cost, expense, fee or penalty; or any investment transaction profit or loss.

Section 4430.40  Penalties

If any party fails to comply with the requirements of this Part, including either the substance or filing requirements contained herein, such party shall be subject to the penalty provisions of the Illinois Pension Code [40 ILCS 5/1A-113(d)] and 50 Ill. Adm. Code 4435.