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<br />p, 04/12 <br /> <br />FAX NO. 6122418210 <br />A{fP04>1M f:M.r:" 1 <br /> <br />JUL-08-1999 THU 10:58 AM CRETEX PURCHASING <br /> <br />Supplemental Investment Fund <br /> <br />The Supplemental Investment Fund is a multi-purpose investment <br />program that oiters a ranga of investment options to state and local <br />public employees. The Fund servas more than 36]000 individuals <br />who partieipala in defined contribution or supplemental retirement <br />savings plans. On June 30] 1998] the mar.l(et value of the entirs Fund <br />was $1.25 bi/lion. <br /> <br />The diflcrcnt participatins s:roups <br />use the Supplemental Fund for a <br />v<ll'iety of purposes: <br /> <br />It functions as the sole <br />investment manager for nil <br />assets of the Unclassified <br />Employees Re(ir~mel\l Plan, <br />Public Employees Ddined <br />Contribution Pl:l.I1 and Hennepin <br />County Supplemental <br />Retirement Plan. <br /> <br />I( is one investmerlt vehicle <br />oCrcretl to public employees as <br />palt ofth~ stale's Dderrcd <br />Compensation Plan, as well a'i <br />the Individual Retirement <br />Account Plan and College <br />Supplemental Retirement Plnn <br />offered by Minnesota Srate <br />Colleges and Universities <br />(MnSCU). <br /> <br /> <br />/''''~.'''-''-- ..._H.,....____ <br /> <br />(-It serves :IS an external ~y <br />mal1<lger for a poriion of some <br />local police and tire tighter <br />'". retirement plans. <br />~''''' - <br /> <br />..-.----.-----............ <br /> <br />!... <br /> <br />Fund Slructura <br /> <br />10 <br /> <br />A witle diversity of investment goals <br />exists among (he Supplemental <br />Funu's participants. In order to meet <br />those needs, the Supplemental Fund <br />has been structured much like 3 <br />"family ofmutu:.\1 funds." <br />Participants rn::!y allocate their <br />inv\:stmcnt:s among Oll~ or more <br />accounts lh:.\t arc appropriate for their <br />needs, within statutory requirements <br />and rules cstllblishcd by the <br /> <br />~ <br /> <br />parlicipating organii:ations. <br />Pati icipll.tion in the Supplemental <br />fund is accomplished through the <br />purchase or sale of shares in each <br />account <br /> <br />Fund Management <br /> <br />The Supplemental Fund otTers seven <br />different investment options (See <br />Figure 23). The objectives, asset <br /><l11ocation, management and <br />pert"orm<lllCe of each ilCCO\1nt in the <br />Fund are explained in the following <br />sections. <br /> <br />Share Values <br />Each account in the Supplemental <br />fund establishes a share value and <br />participants may bu)' or sell shares <br />monlhly, based on the most recent <br />share V.\lllC. <br /> <br />In the Income Share Account, the <br />Growth Share Account, the Common <br />Stock Index Account, the <br />International Share Account and the <br />Bond Market Account, shares arc <br />priced monthly based on the market <br />value of each account. Individuals <br />measure thc performance of these <br />accounts by changes in share values, <br />which in turn are ;:\ function of the <br />income and capitalapprccimion (or <br />depreciation) generated by lhe <br />securities in the accounts. <br /> <br />In the Money Market ^ccount and <br />the Fixed Interest Account, share <br />values remain constant and the <br />accrued interest income is credited to <br />the accounts lhrough the purchase of <br />additional shares at predetermined <br />intervals. <br /> <br />Figure 23. Accourlts ill lite Suppletneflt'lllllveSlml!llt/;'ulld <br />ACCOW-'T~ I":} Cr'l-\= u ~fecr~ (,. ~lJl.{l <br /> <br />-J. Income SharD <br /> <br />.., Growth Share L <br /> <br />a balanced portfolio of stocks and bonds <br /> <br />a 1'0 11 folio ofaclively and semi'passively <br />m~l1llgcd cOlTlmon stock$ <br /> <br />~ Common Srock Index <br /> <br />International Share <br /> <br />:\ p~ssivcly managed l:Onlmon stocl.: portfolio <br /> <br />~ porlfolio of bOlh "clively .lI1d p,\ssivdy m:m<lged <br />non U.S. stocks <br /> <br />~ Bond Market <br /> <br />a fixed income portfolio utilizing ~\eti...c nnd semi. <br />passive management <br /> <br />Money Market <br /> <br />a P011folio of liquid. shorHCI1l\ debt ~ecul'ities <br /> <br />Fixed Interest <br /> <br />a pol'tl'olio (lr GlIaranh:cd ilw,:slmcnl C(llllr:lcl~ (GIC'~) <br />anJ (jIC lypc ilwc$lrtlcnlS <br /> <br />23 <br />