City of Coral Springs, Florida Notes to Financial Statements Note 3.
Cash, Cash Equivalents and Investments (Continued)
The Pension Plans utilize portfolio diversification to limit investments to the highest rated securities as rated by nationally recognized rating agencies. The Pension Plans’ investment policies have no limits imposed on fixed income securities issued directly by the U.S. Government or any agency or instrumentality thereof. General Employees’ Plan The investment policy limits corporate fixed income securities to investment grade or higher by Standard and Poor’s, Moody’s, or Fitch. On September 30, 2022, the portfolio met the credit rating limitations of the investment policy. Police Plan The Police Plan limits corporate fixed income securities to the top four ratings classification by a major rating service and limits money market funds to a rating of “A1” by Standard & Poor’s or “P1” by Moody’s. On September 30, 2022, the portfolio met the credit rating limitations of the investment policy. Firefighters’ Plan The Fire Plan limits corporate fixed income securities to investment grade or higher as reported by a major credit rating service and limits money market funds to a rating of “A1” or higher by Standard & Poor’s or “P1” by Moody’s. On September 30, 2022, the portfolio met the credit rating limitations of the investment policy. Custodial Credit Risk. For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the government or Plan will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. Primary Government The City’s investment policy requires securities, except for securities related to overnight repurchase agreements, be held by a third-party custodian and be properly designated as an asset of the City and held in the City’s name. As of September 30, 2022, the City’s investment portfolio was held with a third-party custodian, and designated as City assets, as required by the City’s investment policy. Pension Funds The Pension Plans do not have an investment policy for custodial credit risk. As of September 30, 2022, each of the Pension Plans’ investment portfolios was held with a third-party custodian in the Pension Plans’ name.
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