Monitoring Investment Performance
Relief association trustees should understand their fund managers’ investment strategies and hold investment advisors accountable for the performance of the assets being managed. Relief association trustees are not relieved of their fiduciary duties by hiring professional consultants or investment advisors. Trustees, including municipal trustees who serve on a relief association’s board, should regularly compare the investment performance of their advisors with the performance of passively-managed index funds and other benchmarks.
The OSA provides two educational tools to help relief association trustees compare investment performance. One tool, an “Investment Report Card,” is sent by email to each relief association after our review of the relief association’s financial and investment reporting forms is complete. The report card provides one-year and multi-year rates of return calculated for the relief association, as well as a custom benchmark rate of return. The custom benchmark rate of return can be used to measure the relief association’s actual investment performance against market returns.
Another tool is the annual “Financial and Investment Report of Volunteer Fire Relief Associations” that is published annually by the OSA. The report includes one-year and multi-year rates of return, calculated custom benchmarks, asset allocations, and market values for each relief association in Minnesota.
Published last in the July 2016 Pension Newsletter