Today’s increasingly complex investment and regulatory landscape places greater pressure on the plan sponsors and fiduciaries overseeing defined contribution plans. Fiduciaries are not only re-examining their current investment decision-making practices, they are also seeking to ensure that those practices allow for enough flexibility in implementation to maximize the likelihood of investment success, while protecting the plan sponsor from potential litigation.
Central to the idea of a well-managed program, a clearly articulated investment policy statement (IPS) serves as the foundation of sound governance and a robust oversight process
In the complex and litigation-prone world defined contribution plans occupy, it is important to underline what the real focal points for fiduciaries should be. This paper is provided by T. Rowe Price.
1 ERISA § 404(a)(1)(A), 29 U.S.C. § 1104(a)(1)(A).
2 ERISA § 404(a)(1)(B), 29 U.S.C. § 1104(a)(1)(B).
3 ERISA § 404(a)(1)(D), 29 U.S.C. § 1104(a)(1)(D).
4 ERISA § 404(a)(1)(C), 29 U.S.C. § 1104(a)(1)(C)
This paper is sponsored by T. Rowe Price Associates, Inc. Contents of this paper are for informational purposes only and not for the purpose of providing legal advice. The analysis and conclusions are solely those of the author.
Whitepaper: Meeting Your ERISA Fiduciary ResponsibilitiesCBIZ, Inc.
This whitepaper discusses who is considered a "Fiduciary", what the significance of being a Fiduciary is and Fiduciary responsibility recommendations.
For more information, visit www.cbiz.com
In the complex and litigation-prone world defined contribution plans occupy, it is important to underline what the real focal points for fiduciaries should be. This paper is provided by T. Rowe Price.
1 ERISA § 404(a)(1)(A), 29 U.S.C. § 1104(a)(1)(A).
2 ERISA § 404(a)(1)(B), 29 U.S.C. § 1104(a)(1)(B).
3 ERISA § 404(a)(1)(D), 29 U.S.C. § 1104(a)(1)(D).
4 ERISA § 404(a)(1)(C), 29 U.S.C. § 1104(a)(1)(C)
This paper is sponsored by T. Rowe Price Associates, Inc. Contents of this paper are for informational purposes only and not for the purpose of providing legal advice. The analysis and conclusions are solely those of the author.
Whitepaper: Meeting Your ERISA Fiduciary ResponsibilitiesCBIZ, Inc.
This whitepaper discusses who is considered a "Fiduciary", what the significance of being a Fiduciary is and Fiduciary responsibility recommendations.
For more information, visit www.cbiz.com
NPA in Indian Banking Industry, Analysis of Bankruptcy Code, Resolution mechanism through Asset Reconstruction Company (including Valuation Techniques)
The presentation covers infrastructure project financing, typical configurations, key project parties, project contracts, It explains financing of a power project, security mechanism, SPV payment hierarchy and risk mitigation mechanism
Session 5 Presentation - Includes content related to Project Finance deals, in particular, Advising & Arranging Activities, Fee Structures, International Financial Institutions, Multilateral Banks and Bilateral Agencies (ECA\'s).
The process that most plan sponsors follow to govern their retirement plans is the one advocated by their retirement plan service providers. The purpose of this article is to raise awareness that there is an alternative process that that is well-established and regarded my many as a better approach, but it often remains hidden because it conflicts with the interests of most retirement plan service providers. Given the magnitude of the potential value that an alternative process may yield, it is worthy of serious consideration by plan sponsors.
Infrastructure Finance – Building for Growth - Funding of Infrastructure Proj...Resurgent India
Infrastructure projects were funded by equity, bank/institutional borrowings, loans from holding companies, viability gap funding, soft loans, revenue shortfall loans and funding from multilateral financial institutions, IIFCL etc
Institutionalizing DC Plans | A Starting Point for Addressing Fiduciary Issues The 401k Study Group ®
This article provides a basic framework for plan sponsors and fiduciaries interested in exploring perspectives on institutionalizing their DC plans. For those who would like further details, page 10 of this paper lists additional DCIIA resources on select topics.
sing Target Date Funds in Your Plan
Target date funds (also known as lifecycle funds) have become increasingly popular in retirement plans. Close to 70% of 401(k) and profit sharing plans offered target date funds in 2014, according to the most recent survey by the Plan Sponsor Council of America.*
Managing Defined Contribution Plan Investments: A Fiduciary HandbookCallan
Employee Retirement Income Security Act (ERISA) fiduciaries face a challenging task: They must familiarize themselves with ERISA's complicated rules of fiduciary conduct. They must understand and evaluate the performance of plan investments, and in doing so, they are subject to ERISA's prudent expert and exclusive purpose standards. In this handbook we focus on defined contribution (DC) plan investment fiduciaries and some of the key issues they face.
NPA in Indian Banking Industry, Analysis of Bankruptcy Code, Resolution mechanism through Asset Reconstruction Company (including Valuation Techniques)
The presentation covers infrastructure project financing, typical configurations, key project parties, project contracts, It explains financing of a power project, security mechanism, SPV payment hierarchy and risk mitigation mechanism
Session 5 Presentation - Includes content related to Project Finance deals, in particular, Advising & Arranging Activities, Fee Structures, International Financial Institutions, Multilateral Banks and Bilateral Agencies (ECA\'s).
The process that most plan sponsors follow to govern their retirement plans is the one advocated by their retirement plan service providers. The purpose of this article is to raise awareness that there is an alternative process that that is well-established and regarded my many as a better approach, but it often remains hidden because it conflicts with the interests of most retirement plan service providers. Given the magnitude of the potential value that an alternative process may yield, it is worthy of serious consideration by plan sponsors.
Infrastructure Finance – Building for Growth - Funding of Infrastructure Proj...Resurgent India
Infrastructure projects were funded by equity, bank/institutional borrowings, loans from holding companies, viability gap funding, soft loans, revenue shortfall loans and funding from multilateral financial institutions, IIFCL etc
Institutionalizing DC Plans | A Starting Point for Addressing Fiduciary Issues The 401k Study Group ®
This article provides a basic framework for plan sponsors and fiduciaries interested in exploring perspectives on institutionalizing their DC plans. For those who would like further details, page 10 of this paper lists additional DCIIA resources on select topics.
sing Target Date Funds in Your Plan
Target date funds (also known as lifecycle funds) have become increasingly popular in retirement plans. Close to 70% of 401(k) and profit sharing plans offered target date funds in 2014, according to the most recent survey by the Plan Sponsor Council of America.*
Managing Defined Contribution Plan Investments: A Fiduciary HandbookCallan
Employee Retirement Income Security Act (ERISA) fiduciaries face a challenging task: They must familiarize themselves with ERISA's complicated rules of fiduciary conduct. They must understand and evaluate the performance of plan investments, and in doing so, they are subject to ERISA's prudent expert and exclusive purpose standards. In this handbook we focus on defined contribution (DC) plan investment fiduciaries and some of the key issues they face.
Running Head Research on problems on public funds investing in Lo.docxtoltonkendal
Running Head: Research on problems on public funds investing in Local government 7
Research on problems on public funds investing in local governments
Shekima Jacob
South University
Introduction
Due to the office of the office of the state’s Treasurer interest on the idea to develop a resource to guide the local government in consideration of the statutory investment plans and strategy for the experienced problems in local government funds ("RCW 39.59.01.", 2017). This article covers all sorts of the investments related to the local government state of law, potential risks investment sound programs elements and the public fund's investment pitfalls. The research goes ahead and provides sources to other resources which are experienced by the investors who have a mind of having best industry implementation minds, therefore the article develops plans as a guide to the investors in the local government of various sections in more significant ways and other investors to be specific.
The prudence of investments
In the process of successful investment there have been the existence of the problem for the investors to have liquidity and safety funds in the first and foremost objective whereby there is the maximization of returns of which tend to operate on the legality bounds. The right thing in this process is the definition of the procedures and strategies on objectives pursuit. The opportunities and investing and risks are supposed to be managed so that there is adequate security because of the fund's availability where the next step must be adding to revenue stream to the individual objectives. The local government managers in investment plans found not to be cooperative to the standard of “prudent person” where the recommendation should be of return and risk in time horizon decisions to be followed by the investor accurately.
The policy of investment
As a requirement of investment strategy is to be anchored by an investment policy that is structured well. In this case, there was a failure in the parameters, objectives, and benchmarks of the portfolio as it was not reviewed frequently. Since the policy is set for the protection of the officers in the entity local government involved and has secured information to the community dealer for much coverage, it was not followed by the suit. The best witnessed for this case is through the local government encouragement by the State Treasurer when the submission of the policies was made thus offering the investment certification system program. Therefore, the major aspect that acted as hindrance to many was financing plans undermined for application.
Finding of eligible investments
Since there is the restriction on the local government to ensure that public assets liquidity, a section of the responsible officers in the ministry reasonable to undertake eligible test to list the investment into the statute list, acted as a hindrance in this process thus making it an inconvenience. ...
Promoting & Evaluating The Success of Your Plan | The Wagner Law GroupThe 401k Study Group ®
Plan sponsors and other responsible fiduciaries should consider establishing voluntary goals to help evaluate and
promote the success of their Plans. Focusing on the right goals can substantially improve a Plan’s performance and help assure a Plan’s success as an employer sponsored
benefit arrangement for employees.
Running head1Running head Financing Managers4.docxagnesdcarey33086
Running head1
Running head: Financing Managers 4
FINANCING MANAGERS
MARK S. LASKY
AMERICAN PUBLIC UNIVERSITY
FINC300 I002 Spr 15
DR. STANLEY
May 9, 2015
Managing finances in an organization is a significantly important and complex activity. A financial manager should perform all financial activities of an organization. He should assure that the organizations assets are fully appropriated to what is best for the company. Their actions affect growth, goodwill, and benefits. He has to plan, procure, utilize and control finances (“Role of a Financial Manager,” 2013). Comment by Dr. Sean A. Stanley: You must have a heading here! Comment by Dr. Sean A. Stanley: You never put quotations in your citation, see APA manual for citations. Please note that in text citations should mainly consist of the Author, Publication Year and Page or paragraph number, which is only required for “direct quotations”. This information appears either in the sentence (in text) or parenthetically. For quotations of a source, the page or paragraph numbers also is included parenthetically. This information will help direct the reader to the particular source in the reference list.
Capital Budgeting
It is the process a business decides on its long-term investments to promote growth. It influences an organizations return and its survival in a recession. It is important on selecting business projects. Cash flows are expected over several years from these potential long-term investments (“Capital Budgeting,” n.d). An analysis is made on the cash flows to be generated via the project and its cost. Long-term investments may be for new buildings, machinery, merchandise, and research and development projects. Comment by Dr. Sean A. Stanley: In text citations do not have quotations, also, you must have only the Author’s lastname and Year of publication.
A finance manager assesses cash flow of the organization and creates a cash flow plan. The finance manager He identifies, evaluates, chooses, and compares projects and they. He recognizes and prioritizes the capital investments on projects that will bring maximum returns to the organization. The finance manager He decides whether certain investments will or will not be included in the portfolio. The finance manager He must ensure that he chooses investment in a manner that will generate good rates of return to the organization. The finance manager He should use realistic numbers in his assessment to help him select projects that are viable. He should rank projects to avoid in investing in projects that might lead to losses.
Capital Structure
It is simply the ratio of different types of securities raised via an organization as long-term finance. It involves two decisions i.e. type of securities and relative ratio of these securities. It should be flexible to allow relaxation and contractions of an enterprise. It should focus on debentures and other loans since equity capital cannot be refunded (“Structuring Finance.
Defined contribution (DC) plan sponsors face increasingly complex issues. Russell Investments has developed a priority list of eight ideas and actions to help plan sponsors guide their participants toward better decision-making as they save for retirement.
By 2025, many DC plan sponsors will likely adopt characteristics of the most successful pension plans to help put them on a path to create a fully funded retirement income stream for plan participants. Here are ten considerations
Ever ask: “How does our retirement plan compare to others?” Learn what Russell Investments believes all excellent DC plans share and actions you can take to help position your plan for excellence.
While many assume the greatest source of retirement plan liability is the plan’s investments, in reality, the vast
majority of lawsuits and regulatory actions involve failures in administration.
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
how can I sell my pi coins for cash in a pi APPDOT TECH
You can't sell your pi coins in the pi network app. because it is not listed yet on any exchange.
The only way you can sell is by trading your pi coins with an investor (a person looking forward to hold massive amounts of pi coins before mainnet launch) .
You don't need to meet the investor directly all the trades are done with a pi vendor/merchant (a person that buys the pi coins from miners and resell it to investors)
I Will leave The telegram contact of my personal pi vendor, if you are finding a legitimate one.
@Pi_vendor_247
#pi network
#pi coins
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when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
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Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
1. Russell Investments / Investment policy statement: Elements of a clearly defined IPS for defined contribution plans / 1
Investment policy
statement
Elements of a clearly defined IPS for
defined contribution plans
Russell Investments Research
Greg Coffey, CFA, Director, Institutional Investment Solutions
Today’s increasingly complex investment and regulatory landscape places greater pressure on
the plan sponsors and fiduciaries overseeing defined contribution plans. Fiduciaries are not only
re-examining their current investment decision-making practices, they are also seeking to
ensure that those practices allow for enough flexibility in implementation to maximize the
likelihood of investment success, while protecting the plan sponsor from potential litigation.
Central to the idea of a well-managed program, a clearly articulated investment policy statement
(IPS) serves as the foundation of sound governance and a robust oversight process.
In this paper, we summarize the key elements of an IPS and discuss the ways by which “great”
policy design can ultimately drive a successful defined contribution plan.
What is an investment policy
statement?
An investment policy statement (IPS) is a plan-sponsor-
specific document designed to provide oversight
procedures that govern the investment-related activities
of a defined contribution plan. Specifically, the IPS
should address the objectives, investment structure and
evaluation guidelines of the investment offerings within
the plan. A well-rounded IPS should clearly delineate
the responsibilities of all parties involved in the plan
(e.g., the board of trustees; the investment committee;
the investment advisor, which may be an outsourced
CIO provider; and the recordkeeper).
ERISA does not mandate that a plan sponsor have an
IPS; however, that doesn’t mean it is not needed. In
addition to providing guidance on plan management,
should the plan ever be audited by the Department of
Labor (DOL), one of the first documents the DOL will
request is the IPS. Further, DOL Interpretive Bulletin 29
CFP 2509.94-2 specifically discusses the need for an
IPS: “…consistent with the fiduciary obligations set forth
in ERISA Section 404(a)(1)(A) and (B). For purposes of
this document, the term ‘statement of investment policy’
means a written statement that provides fiduciaries who
are responsible for plan investments with guidelines or
general instructions….”
In summary, having an IPS is good practice, but
fiduciaries must follow the contents of the IPS to the
letter or risk a breach of fiduciary responsibility under
ERISA. Therefore, it is also good practice to avoid
directives and embed flexibility.
Constructing an IPS should be a dynamic process.
While changes to the document should be infrequent,
the IPS should be reviewed annually to ensure that all
language and content reflect the plan sponsor’s views
and fulfill all regulatory requirements. During the initial
design process, or periodic review, the plan sponsor
should seek input from trusted investment advisors and
an external counsel who can help identify additional
risks and issues that may not be top-of-mind.
2. Russell Investments / Investment policy statement: Elements of a clearly defined IPS for defined contribution plans / 2
Drafting an IPS can also be an educational experience
for investment fiduciaries. Working through issues in the
design process can help identify weaknesses and gaps
between actual and best practices, and between
expectations and reality. The result should be a
document that can be easily understood and executed
by all relevant parties and that provides clarity in the
case of questions regarding investment strategy. (For
example, an investment manager change should not
automatically necessitate an IPS revision.)
The IPS should be specific enough to provide
meaningful guidance but flexible enough to follow while
also accommodating for future economic, accounting
and regulatory changes without exposing the plan to
undue legal challenges. The IPS development process
can be like walking a tight rope; fiduciaries must strike a
balance between creating a useful document that
demonstrates procedural prudence and managing
litigation risk by not imposing an obligation on the plan
fiduciaries to act in any particular way. To that end, plan
sponsors should consider incorporating additional
flexibility into the IPS by adding language to explicitly
state that fiduciaries “may consider criteria not set forth
in the IPS to make decisions that differ from those set
forth in the IPS, and shall be free to deviate from the
IPS as they deem appropriate in their sole discretion.”
Vital elements of a “great”
investment policy statement
What embodies a “great” IPS? A well-written investment
policy statement is typically organized in sections that
address these core areas:
1. Purpose and Scope
2. Plan Objectives
3. Definition of Duties
4. Investment Menu Framework
5. Monitoring and Evaluation
6. Participant Communications
7. Acknowledgement
When constructing an IPS, the adage of “less is more”
is important to keep in mind. While it may seem like a
good idea to write out a very detailed IPS, a high
degree of detail can be a mistake. Detailed directives
and overly prescriptive language often create an
inflexible document that can make it difficult for the plan
sponsor to follow or that can force unnecessary
changes to the plan that may not benefit plan
participants. An example could be frequent fund
changes that result in performance chasing. As noted
above, if the IPS isn’t followed to the letter, it exposes
the plan sponsor to legal risks due to their breach of
fiduciary duty.
Section 1: Purpose and Scope
Typically, the first section in an IPS is “Purpose and
Scope.” This section provides an overview and sets the
tone for the specific guidelines within the body of the
document. It should broadly state the scope of the IPS,
its intended purpose and the general objectives of the
plan. If an entity has multiple defined contribution plans,
listing out all plans that fall under the scope of the policy
is important.
Section 2: Plan Objectives
All IPS documents should clearly articulate the
objectives of the plan(s). Generally, this would include
language such as, “The purpose of the 401k plan is to
provide eligible employees with an opportunity to save
for retirement.” Often there may be a description stating
that participant account balances will be composed of
employee and employer contributions as well as
earnings on those contributions.
Within this section, it is a good idea to acknowledge that
different plan participants likely have different
investment objectives, time horizons and risk
tolerances. As a result, the plan will offer a range of
investment options and different asset class exposures
designed to span the risk and return spectrum.
From a legal perspective, in this section of the IPS, it is
appropriate to state that plan participants bear the risk
of investment results from the options they choose,
along with the associated asset allocation. The plan
sponsor does not take on this risk. While participants
bear the investment risk, the plan sponsor has a
fiduciary responsibility to ensure the plan is well
managed and will act in the best interest of plan
participants. The IPS should state that the plan will
always be managed in compliance with ERISA and all
other applicable laws and regulations.
This is also an appropriate place to communicate any
plan objectives related to socially responsible investing,
which is an approach to investing that aims to
incorporate environmental, social and governance
(ESG) factors into investment decisions to manage risk
better and generate sustainable, long-term returns.
3. Russell Investments / Investment policy statement: Elements of a clearly defined IPS for defined contribution plans / 3
Section 3: Definition of Duties
It is important for the IPS to clearly state the duties of all
involved parties, so that they are aware and may
effectively fulfill their obligations. At minimum, the
parties listed should include:
Board of trustees
Typically, the board has the ultimate fiduciary
responsibility for the plan’s management. The board is
responsible for ensuring that appropriate policies
governing the management of the portfolio are in place,
as well as implemented. Typically, the board delegates
responsibilities to an investment committee for ongoing
monitoring and implementation of the plan.
Investment committee
The investment committee (IC) is responsible for
creating and implementing the investment policy. In
addition, the IC is responsible for reviewing and
approving plan structure, the investment choices
offered and the investment strategy (i.e., hiring
investment managers or an outsourced CIO provider to
implement the strategy). The committee is responsible
for monitoring performance on a regular basis to ensure
compliance with the IPS. Additionally, it must ensure
that the fees charged to plan participants are
competitive and reasonable.
Outsourced CIO provider
Articulating the role of an outsourced CIO (OCIO)
provider is critical. An OCIO provider assumes co-
fiduciary responsibility along with the IC and can
perform a wide range of duties, which depend on the
delegated level of discretion (e.g., determining the
investment menu, selecting managers, actively
managing the portfolio, etc.). Generally, there is an
investment management or services agreement
between the plan sponsor and the OCIO provider. This
agreement establishes the breadth and depth of the
OCIO’s investment management scope and level of
fiduciary responsibility. Within the IPS, preference
should be given to the following tasks:
• Meet regularly with the IC and provide the
committee with materials reviewing the
effectiveness of the plan’s investment options and
strategy as well as provide guidance
• Select specific investment vehicles to be offered to
participants
• Notify the committee of any material changes to the
organization, investment teams or investment
process
• Invest plan assets in accordance with participant
direction from the recordkeeper
The OCIO should provide a comprehensive solution
that includes assuming the fiduciary liability for the
selection of the underlying investment managers. It is
important to be clear on where the responsibility for
those relationships lies. Depending on the scope of
services and level of discretion accorded to the
outsourced provider and other parties, there may be
additional roles to define.
Investment managers (optional)
The duty of investment managers is to implement the
strategy for which their services have been retained.
For example, a global equity manager would be
responsible for investing in stocks across the breadth of
the global opportunity set.
Trustee/recordkeeper
While the trustee and recordkeeper are often the same
organization, sometimes these functions will be
separate and the main responsibilities for each should
be spelled out in the IPS. At a high level, some of the
key responsibilities include:
• Maintain the plan and provide asset safe keeping
• Allocate and transfer the plan assets as directed by
the plan participants
• Make payments from the plan to participants or
beneficiaries as directed
• Provide a written accounting of all cash flow
movement and market values
• Provide an annual 5500 reporting package
• Report performance of all investment options
• Provide statements to participants
Section 4: Investment Menu Structure
All investment policy statements should clearly
articulate the investment objectives of the plan and
outline the IC’s philosophy in plan design. With plan
participants having a wide range of investment
objectives and differing circumstances, a robust plan
design that covers the risk and reward spectrum is
important. Policy language around the use of actively
managed and/or passively managed investment
offerings are typically included in this section. In
addition, the defined contribution industry has seen a
noticeable increase in “white labeling” investment
options to streamline investment menus and help
reduce participant confusion. If the white labeling of
investments is utilized by the plan, that should be noted.
4. Russell Investments / Investment policy statement: Elements of a clearly defined IPS for defined contribution plans / 4
In recognition that participants possess varying degrees
of investment sophistication and different investment
preferences, this section should be used to describe the
tiered investment menu structure. While participants
can invest in more than a single tier, each tier is
designed to allow for varying investment approaches.
Descriptions of each tier should be included in the IPS.
Tier 1 (target date funds, target risk funds,
managed accounts)
Tier 1 investments are often thought of by participants
as the “do it for me” approach to investing. The
participant may choose from a comprehensive, pre-
mixed lifecycle fund that offers a complete and
diversified portfolio based on age, anticipated date of
retirement, or risk tolerance. In addition, a Tier 1
investment offering is often the default investment
option for the plan and the IPS should reference its
designation as the Qualified Default Investment
Alternative (QDIA).
Tier 2 (active and/or passive core funds)
Tier 2 investments are appropriate for participants who
may wish to construct their own investment portfolios.
As part of this offering, the plan should make available
a core menu of single asset class options or white label
funds. Options in this tier should be diversifying among
the varying asset classes with different return and risk
characteristics. The broad asset classes made available
to participants may change over time, but each
investment option should be evaluated based on its
appropriateness in a well-diversified portfolio.
Example of Tier 2 Investment Offerings
ASSET CLASS BENCHMARK
U.S. Large Cap Equity Russell 1000 Index
U.S. Small Cap Equity Russell 2000 Index
Non-US. Equity
(Developed and
Emerging Markets)
MSCI ACWI ex-US Index
Core Fixed income Bloomberg Barclays US
Aggregate Bond Index
Stable Value Citigroup 1 to 3 Month T Bill
Index
Tier 3 (self-directed brokerage accounts)
This is recommended only when a plan utilizes self-
directed brokerage accounts. These accounts provide
participants with additional flexibility by picking
investment options outside of the Tier 1 and Tier 2
investment menus. If Tier 3 investments are offered,
language in this section should emphasize that the plan
sponsor makes no judgement or attestation about the
appropriateness or suitability of its inclusion in a
participant’s asset allocation strategy. The responsibility
of monitoring and assessing the suitability of the
investments in a Tier 3 option rests solely on the
participant.
Investment advice/managed accounts
This section is recommended only if the plan offers
investment advice (i.e., managed accounts). Managed
accounts are an advisory service that participants may
elect, which provides individualized asset allocation
advice for a fee, generally utilizing funds from the
existing plan’s core menu. If managed accounts are
offered, the language should convey that managed
accounts are an optional service that participants have
access to in addition to the investment offerings made
available under the plan. The IPS should state that the
managed account service is provided by a third-party
service provider and indicate the name of the provider.
Section 5: Monitoring and Evaluation
Ongoing review of a plan’s investment options is a
critical step in the IPS process. Many plan sponsors
have seen an increase in lawsuits brought by
participants claiming improper management of their
defined contribution plan. Having well-articulated
guidelines for the IC to follow can be very helpful in a
lawsuit or audit. While it is important to have a policy in
place, it is equally important to ensure the policy is
followed.
When evaluating the Tier 1 and Tier 2 menu
performance, the IPS should clearly state which market
benchmarks are to be used for each investment option
and if applicable, which peer universe. Given the
unpredictability of financial markets and varying lengths
of market cycles, language in the IPS should
acknowledge that short-term fluctuations in returns may
cause variations in both absolute and benchmark
relative performance. As a result, best practice would
be for the IC to take a longer-term view in evaluating
the performance of each investment option. The
monitoring of results should include not only
quantitative criteria, but qualitative inputs as well such
as portfolio management process, investment
5. Russell Investments / Investment policy statement: Elements of a clearly defined IPS for defined contribution plans / 5
professionals, etc. While the IC should review results on
a frequent basis (e.g. quarterly), it should leave itself
the flexibility to avoid unnecessarily replacing an
investment option simply because benchmark relative
performance has fallen below an index on a three- or
five-year basis. Underperformance could simply be due
to the investment style being out of favor with the
market. While flexibility in the IC’s evaluation is
important, ensuring that reasons for an investment
option’s underperformance or overperformance is
memorialized in the meeting minutes is imperative. In
the future and most important, when in question, the
plan sponsor can show a clear and thorough process in
the monitoring and evaluation of the investment menu
during plan audits or when participants claim plan
mismanagement.
In addition to performance evaluation, the IC should
also include guidelines with a focus on evaluating fees
borne by plan participants such as recordkeeping and
investment management fees. The IC should confirm
on a regular basis that all costs associated with the
management of the plan are reasonable. Investment
management expense for each investment option
should be competitive relative to respective peers
considering portfolio characteristics, account size and
investment style.
Section 6: Participant Communications
The IPS should contain a section outlining the plan
sponsor’s philosophy towards participant education. A
well-designed defined contribution plan will not be able
to live up to its full potential if participants are not
educated on their benefits as well as options. It is
important for plan sponsors to think about the nature
and frequency of participant education.
Section 7: Acknowledgement
Typically, the last section in an IPS is the
acknowledgement section, which is signed by an
authorized individual from the plan sponsor with copies
distributed to all parties. The acknowledgment
statement can be as simple as: The committee
considered and approved this Investment Policy
Statement on XX date.
Conclusion
Having a well-defined and clearly articulated IPS is vital
in today’s challenging investment and regulatory
landscape. The IPS fulfills a vital role in helping to lay
the foundation of a plan sponsor’s overall governance
structure and ensuring that all fiduciaries achieve their
obligations. Writing a “great” IPS is often an iterative
process; it demands engagement and thoughtfulness
from each fiduciary. Russell Investments strongly
believes that such a level of care will result in an
oversight protocol that is more integrated and better
aligned with the needs of the plan sponsor and the
beneficiaries of the plan.