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NOTICE FROM TREASURER REGARDING ADMINISTRATIVE FEES

VIEW LETTER (PDF)

MEMORANDUM

To: All participants of the State Pooled Investment Fund (SPIF) and
Local Government Investment Pool (LGIP)

From: David H. Lillard, Jr.
State Treasurer

Re: Administrative Fees

Date: December 21, 2015   


The Local Government Investment Pool (LGIP) presents a sound investment option for local government officials. The objectives of the fund are safety, liquidity, and a competitive return on investments. The LGIP is commingled with State funds to create the State Pooled Investment Fund (SPIF). By commingling all of the dollars into a single investment pool, the economies of scale that are formed create a fund that is cost-effective and provides ample liquidity for all participants. Plus, a larger fund has greater access to the largest investment brokerage firms in the industry which creates a more competitive environment and access to more research and opinions on market forecasts.

By creating a safe, liquid, and efficient opportunity available to all local government officials within the State of Tennessee, public finance officials are given an option to invest taxpayer funds until they are
needed while earning the same return on investments as the State Treasurer. Options such as the LGIP provide a tool to reduce the need to create additional tax revenue.

______________________________________________________________________________

I am pleased to announce that effective January 1, 2016, the administrative fee for the SPIF / LGIP will be lowered from 5 basis points (0.05%) to 4 basis points (0.04%).  The administrative fee is applied as a reduction to the gross interest rate earned monthly, resulting in the net interest that is credited to each account.  Each year, the administrative fees are evaluated to determine if they are sufficient to cover the expenses associated with managing the fund.  The balance of the entire fund has grown and likewise, the amount of administrative fees collected has also increased.  Even though interest rates have started to increase slightly, the rate set at the December 16, 2015 Federal Reserve meeting is still only a range of 25 basis points to 50 basis points.  The reduction in administrative fees is the latest effort in Treasury’s goal of providing the most cost-effective investment option that seeks to protect principal and provide the liquidity to meet the needs of all participants in the State Pooled Investment Fund and the Local Government Investment Pool.


 

CHECK FRAUD SCAM ALERT
LOCAL GOVERNMENT INVESTMENT POOL
August 2011

Important Notice to Consumers, Banks and Others – The Tennessee Treasury Department has become aware of a recent work-from-home scam utilizing the Internet classified website, Craigslist.com, and possibly other Internet sites, e-mails and other solicitations. The scam uses fraudulent checks that appear to be written by the Treasury Department’s Local Government Investment Pool with a Nashville, Tennessee address. The Tennessee Treasury Department does not issue or honor these fraudulent checks for payment. You can find further information on how to protect yourself from these scams and to report suspicious activity at: http://www.ic3.gov/media/2010/WorkAtHome.pdf


 

INTRODUCTION

The State Treasurer operates the State Pooled Investment Fund of which the Local Government Investment Pool (LGIP) is a part. The legislation providing for the establishment of the LGIP (Tennessee Code Annotated, Title 9, Chapter 4, Part 7) authorizes investment in the LGIP for local governments and other political subdivisions.