The Connecticut General Assembly created the Investment Advisory Council (IAC) through Public Act 73-594 to assist the State Treasurer regarding investment policies (CGS Sec. 3-13b). The membership of the IAC consists of the Secretary of the Office of Policy and Management (ex-officio), State Treasurer (ex-officio), five public members to be appointed by the Governor and legislative leadership, all of whom shall be experienced in matters relating to investments, three representatives of the teachers' unions and two representatives of the state employees' unions.

Members of the IAC are not compensated for their services. Members of the IAC are public officials and, as such, are subject to specific prohibitions relative to the State's campaign finance laws, as well as to the State's Code of Ethics for Public Officials. This includes the annual filing of a Statement of Financial Interests and certain restrictions on the receiving of anything paid for by individuals and firms doing business (or seeking to do business) with the Office of the Treasurer. Members of the IAC are statutorily prohibited from participating in discussions or votes related to any direct or indirect contract with a Member or a Member’s business organization of affiliate for the investment of trust funds of the State.

Public Act 00-43, enacted in 2000, established additional oversight and disclosure requirements for state pension investments and requires the Treasurer, with IAC approval, to adopt a policy for investing the Connecticut Retirement Plans and Trust Funds (CRPTF), which is the Investment Policy Statement, or IPS.

The IAC has four distinct roles: approval, review, advice and notification.

Approval Role
The IAC exercises its approval role in three specific instances:

  • When the IPS is amended in any way, including revisions to investment policy, guidelines or strategies; asset allocation or the inclusion of new asset classes; or when new or unique investment opportunities are to be considered that are not specifically addressed in the IPS;
  • When a chief investment officer, deputy chief investment officer, principal investment officer, investment officer, or other personnel is hired;
  • When real estate and private equity investments are made during the "lame duck" period of the State Treasurer's term, rendering the IAC members fiduciaries in this situation. Connecticut Statute requires that the IAC make investment decisions regarding private equity and real estate investments during such a "lame duck" period of a State Treasurer's term of office.


Review Role
The IAC is also charged with a review role, regarding compliance with Connecticut statutes concerning the investment of the trust funds as well as compliance with the provisions in the IPS. Among the areas that the IAC reviews are:

  • All recommendations for contracts with investment consultants, external money managers, custodians, brokers, legal counsel and other service providers. The IAC has up to 45 days to "review and comment" on any proposed contract.


Advice Role
As an entity that renders advice to the State Treasurer, the IAC focuses on the high-level investment and shareholder policy issues, institutional investment procedures, performance benchmarks and applicable processes that are found in the IPS. The IAC is also asked for advice about investment managers, custodian banks, consultants, or others who are considered for providing investment related services to the Office of the State Treasurer, as well as the compensation ranges for such personnel.


Notification Role
As directed by Connecticut statute, the IAC has a notification role if any unauthorized, illegal, irregular, or unsafe handling or expenditure of the trust funds comes to its attention. In such cases, the IAC must notify the Auditors of Public Accounts and the Office of the State Comptroller.