2.73.05 Common Trust Fund
|The University will maintain a pooled fund through its endowment fund held by the Wayne State University Foundation. This fund will be known as the Common Trust Fund, and it will be for the purpose of pooling all liquid assets of endowment funds (true endowments, funds functioning as endowments, term endowments, living trusts, and similar assets) for investment purposes, unless a donor of an endowment specifies that such assets be maintained and invested separately and the President or his/her designee agrees to such special arrangement.|
The investment objective of Wayne State University is to generate an annual total rate of return for the fund sufficient to produce the following results on average, over long periods of time:
|The above financial results should be sought without incurring a level of rate-of-return volatility materially greater than that generally associated with peer institution assets. Since the University has transferred its endowment funds to the Wayne State University Foundation, the University expects that the Foundation will adopt an investment policy that incorporates these objectives.|
Generally, new endowment fund cash and/or securities will be placed in the Common Trust Fund as of the last day of the quarter unless a significantly large endowment is received. Then the assets will be placed in the Common Trust at the earliest possible date. The value of the Common Trust Fund will be appraised as of the last day of the quarter, or an earlier date in the case of significantly large endowments (equivalent to no less than 5% of the total endowment fund), and units of participation will be assigned to the new endowment fund(s) on the basis of the total market value of the Common Trust Fund and the total outstanding units of participation before the inclusion of the new fund.
Subtractions from the principal, when necessary and allowable, will be made on the last day of the calendar quarter, at which time a reappraisal is to be made as described above.
Income and capital gains from the Common Trust Fund will be distributed quarterly to each participating endowment fund on the basis of the number of units of participation in accordance with section 2.73.05.070, unless there are different requirements based upon exceptions in existing memorandums of agreement.
The annual amount of the distribution will be 5.0% of a moving average of the market value of the endowment fund. Of this annual distribution, 4.0% will be transferred to the beneficiary or spending account and 1.0% will be transferred to an administrative account as a fee to support the Division of Development and Alumni Affairs fund raising activities. The quarterly distribution amount of the market value of the endowment fund to be distributed to each individual endowment fund will be 1.0%, and the administrative fee to support the Division of Development and Alumni Affairs fund-raising activities will be 0.25% of the market value of the endowment fund.
The moving average is to be determined by dividing the twelve most recent quarterly market valuations by twelve. If there is no beneficiary or spending account, the distribution will be added to the principal. For quasi endowment funds, upon the request of the University official who has signature authority over the beneficiary or spending account, unspent funds in these accounts may be added back to the principal, provided the donor agreement does not prohibit this action.