Policy 735 -Investment of Perpetual Endowment Trust Fund Corpus

I. PURPOSE

The purpose of this policy is to establish guidelines for the investment of the Perpetual Endowment Trust Fund Corpus that is being held into perpetuity for the purpose of earning investment income which can be used to maintain programs of significance for all students.

II. GENERAL STATEMENT OF POLICY

The School Board believes that an effective investment program is important to the financial stability of the District, and to maintain program offerings to students for the long-term. Effective investment of the Perpetual Endowment Trust Fund Corpus will ultimately help to maintain and enhance opportunities for students.

It is the policy of the School Board that the Perpetual Endowment Trust Fund Corpus be managed in a manner designed to attain a market rate of return throughout budgetary and economic cycles while preserving and protecting the Corpus of The Trust Fund. Investments shall be made based on statutory constraints outlined in Minnesota Statutes 118A.04. The Board’s primary investment criteria are listed in priority sequence:

Safety
Yield

III. REQUIREMENT

Scope of Policy: This policy covers the Corpus of the Perpetual Endowment Trust Fund.
Investment Officer: The Executive Director of Finance & Operations is designated as the Investment Officer of the School District and is responsible for investment decisions and activities. The Investment Officer shall be assisted by a three-member Perpetual Endowment Trust Fund Advisory Committee consisting of financial professionals with experience investing funds on behalf of others. The Perpetual Endowment Trust Fund Advisory Committee shall be assisted by a professional wealth management organization recommended to and approved by the School Board.

The Prudent Investor Rule: Circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived.
Investments: The Perpetual Endowment Trust Fund investments will be limited to investments authorized under Minnesota Statutes 118A.04.
At any point in time when Minnesota Statutes may allow investments under MS 356A.06, Subdivision 7 for other post-employment benefit trust funds to be used for a perpetual endowment trust fund, the Perpetual Endowment Trust Fund may utilize those additional investment options.
Diversification: To the extent possible, the Perpetual Endowment Trust Fund investments will be diversified in order to limit its risks.
Prudent Investments: The standard of prudence to be applied by the Investment Officer shall be the “prudent investor” defined above.
Limited Liability of Investment Officer: The District Investment Officer will not be held specifically responsible for a specific security credit risk or market price changes.
Reports: The District Investment Officer will generate a bi-annual report to the Board on the progress of the investment earnings and growth in the corpus of the Perpetual Endowment Trust Fund.