The Investment Advisory Council (IAC) was created by Public Act 73-594 to advise 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.
State law requires that "no public member or such member's business organization or affiliate shall directly or indirectly contract with or provide any services for the investment of trust funds of the state of Connecticut during the time of such member's service on said council and for one year thereafter."
Public Act 00-43, enacted in 2000, established additional oversight and disclosure requirements for state pension investments and placed additional ethics, revolving door, and campaign donation limits on the members of the Investment Advisory Council (IAC), as well as the treasurer, candidates for treasurer, and treasury employees and contractors. The act requires the treasurer, with IAC approval, to adopt a policy for investing state retirement and benefit funds (Investment Policy Statement). It requires the treasurer, with IAC approval, to appoint a chief investment officer for the Connecticut retirement, pension, and trust funds and set his compensation. It enhances the IAC's authority to review investments and investment services contracts and requires IAC approval for certain investments by lame-duck or acting treasurers.
State law also prohibits the appointed members of the IAC (the 5 union and 5 public members) from making campaign contributions to, or soliciting contributions for, a candidate for treasurer. It also prohibits IAC members from soliciting campaign contributions from owners and employees of investment services firms that do business with the Treasurer's Office. The law also subjects the IAC's appointed members to the State Ethics Code and requires all IAC members to file annual financial disclosure statements with the State Ethics Commission.