Illinois' Levine: We're Removing Honey Pot From Politics

The Illinois State Board of Investment has shifted its 401K plan to a passive index fund to simplify its portfolio and reduce management fees. The board aims to depoliticize the pension system and improve investment performance. Despite political gridlock, the board has made significant changes to ease trustees' responsibilities. Constitutional protections limit changes to pension benefits, but the board focuses on responsible investment management. The strategy includes a mix of passive and active management, with a target return of 7%. Cost-cutting measures have been implemented to improve performance.

What was the primary reason for the Illinois State Board of Investment to shift to a passive index fund?

• To simplify the portfolio and reduce fees

• To increase political influence

• To tackle the pension shortfall

• To diversify investments

How has the board managed to simplify the portfolio despite political gridlock?

• By hiring more investment experts

• By focusing on active management

• By moving funds into passive investing

• By increasing the number of trustees

What is the board's stance on potential constitutional changes affecting pensions?

• They are indifferent to any changes

• They focus on managing investments responsibly regardless

• They believe it will solve all pension issues

• They are actively lobbying for changes

What is the board's approach to active management in their portfolio?

• They have completely eliminated active management

• They prioritize active management over passive

• They focus entirely on hedge funds

• They maintain a smaller portion for active management

What is the board's view on indexing the entire portfolio?

• They think it is too risky

• They have never considered it

• They see it as a viable option

• They believe it is a poor strategy

What significant action has the board taken to reduce costs?

• Increased management fees

• Increased investment in hedge funds

• Terminated underperforming active managers and hedge funds

• Hired more financial advisors

What is the board's target return, and how does it relate to their strategy?

• 5%, focusing on high-risk investments

• 7%, focusing on responsible management

• 10%, focusing on aggressive growth

• 3%, focusing on low-risk bonds