Pensions & Investment - October, 2005

In the article titled "Indictment of ex-trustee sparks outrage and questions at plan", Samuel W. "Skip" Halpern, executive vice president, Independent Fiduciary Services, Inc., Washington said that many of the issues raised about the Illinois Teacher Retirement System in the Levine scandal were addressed by his firm's 1998 evaluation of the System's processes and investment practices. One key recommendation was to establish an extensive and independent internal audit process, for example. Although the TRS assignment did not ask IFS to examine the role of political contributions in the manager search process, Mr. Halpern noted that IFS recommended-- among many suggested changes-that the System develop model request-for-proposal forms for real estate and private equity managers because manager screening, search and selection in those asset classes was not standardized. The implication was that the board was reviewing managers in those asset classes without a systematic and rigorous process, he said.