The review considered the basis for the interpretation of the Prudent Person Rule, legal and regulatory frameworks, information gathered for assessment, assessment methods and supervisory actions taken.
The IORP Directive therefore requires these institutions to adhere to the Prudent Person Rule and lists a limited number of investment rules that must be respected by all IORPs.
With its focus on minimizing risk, the prudent person rule
forces trustees to adopt conservative fixed-income approaches to investing trust assets.
Each of the Systems Board of Control, therefore, have full power, through each Systems secretary-treasurer, to invest and reinvest System funds in accordance with the Prudent Person Rule
: with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.
In 1996, the Committee worked with a state representative to change Public Act 55 to incorporate the prudent person rule. This action would give more discretion to fiduciaries, thus allowing the city to increase its equity holdings to the 70 percent target.
It still wanted to pursue the prudent person rule or at least get the law changed to permit equity holdings of 70 percent.
The Board is responsible for developing the Investment Policy Statement, with the assistance of the Investment Advisor, consistent with the "prudent person rule
," as set forth by the Employee Retirement Income Security Act of 1974 ("ERISA"), which requires that a fiduciary act with the care, skill, prudence, and diligence, under the circumstances then prevailing, that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.