 | Board of Visitors minutes April 1, 2005 |  |
APPROVAL OF 
ENDOWMENT SPENDING POLICY 
WHEREAS, the University’s existing endowment spending
policy , approved by the Board of Visitors in April 2001, must be revised
to align with reduced investment return expectations and to allow the
University an opportunity to make strategic adjustments from time to
time;
RESOLVED that the endowment spending policy , effective
July 1, 2005, shall be as follows:
The spending policy calls for a percentage
increase in the annual distribution from the endowment , unless
such increase causes the distribution to fall outside a range
defined as 3.5 percent on the low end and 5.5 percent on the
high end of the market value of the Pooled Endowment Fund. If
the distribution falls outside of this range, the Finance
Committee may recommend either raising or lowering the rate of
increase. The first distribution under the new policy would be
made in January 2006.
For Class A shares, the annual increase is pegged to inflation, where “inflation” is defined as the Higher Education Price Index or its equivalent. It is set initially at 3.6 percent and will be reviewed in five years.
For Class B shares, the annual payout is set at the level of the June 2005 distribution, until such time that the payment has been reduced to a unit distribution identical to that of the Class A shares, from which point the annual distribution will remain the same for Class A and Class B shares.
| Board of Visitors minutes April 1, 2005 | |