PERAC Memo #8 - 1998: Pooled Fund Investments/Tobacco Statute

Pooled Fund Investments/Tobacco Statute

Summary

This memo clarifies PERAC's application of the Tobacco Statute (Chapter 119) to pooled fund investments, defining "pooled funds" as commingled vehicles (mutual funds, group trusts, real estate/limited partnership/venture capital funds) as distinct from segregated/separate accounts, which must comply individually. PERAC assesses the 15% tobacco holdings threshold against the entire pool rather than underlying individual holdings, and any pool exceeding this threshold will appear on the PERAC List. No direct action is required of retirement boards, as PERAC has already sent Tobacco Statute Compliance Reports directly to pooled fund managers for completion and submission.

Full Text

PERAC MEMO#8/1998 M E M O R A N D U M TO:All Retirement Boards FROM:Robert F. Stalnaker, Executive Director RE:Pooled Fund Investments/Tobacco Statute DATE:January 30, 1998 PERAC recently sent Memo #48 to all retirement boards with regard to the implementation of the Tobacco Statute. Section #4 of this memo states “In applying the statute to pooled funds, PERAC will assess the 15% rule against the entire pool as the board is purchasing shares in the pool not the individual holdings of the pool. Thus a pooled fund, if in violation of this standard, will be included on the PERAC List”. Please be advised that PERAC defines pooled funds for the purpose of the Tobacco Statute as commingled investments in investment vehicles such as mutual funds, group trusts, real estate funds, limited partnership funds, and venture capital funds. Funds that invest only for one retirement system, commonly referred to as “segregated funds” or “separate accounts”, are not considered pooled fund investments by PERAC and therefore must comply with Chapter 119 accordingly. PERAC has sent (copy attached) each pooled fund manager a Tobacco Statute Compliance Report. This report must be completed by each pooled fund manager and submitted to PERAC. If you have any questions in this regard, please call Robert Shaw, Director of the Pension Investment Advisory Unit at 727-9380 ext. 637. /msoffice

TOBACCO STATUTE COMPLIANCE REPORT NAME OF POOLED FUND: ________________________________ PORTFOLIO REVIEW DATE: ________________________________ SECTION #1SECTION #2 Securities on PERAC Tobacco Company List Percentage of Holdings (please attach additional pages, if necessary) SECTION #3 Section #1List any holding in the pooled fund portfolio that is included in the PERAC Tobacco Company List. Section #2For each holding in Section #1, list the percentage of the holding to the total market value of the fund. Section #3Add the percentage figures in Section #2. This figure should represent the percentage of total assets of holdings which are included in the PERAC Tobacco Company List. PRINT NAME: ___________________________________________ SIGNATURE: ___________________________________________ DATE: