Summer 2009
More Sponsors Use IPS
An investment policy statement (IPS) is a useful tool for plan fiduciaries who are responsible for investment management decisions. It can provide a framework for measuring and monitoring the performance of the plan’s investments and may provide some protection for the fiduciary when his or her investment decisions are challenged.
More plan sponsors are recognizing the value of an IPS in describing investment strategy and monitoring methods. In a recent survey, 81 percent of responding sponsors said they have a formal IPS. Of those, nearly 40 percent said theirs was developed by the sponsor or a committee; a consultant or advisor created the IPS for 35 percent of respondents.
Most sponsors update their IPS as needed (49 percent) and 25 percent do so annually. This and other topics such as investments, plan governance, fees and administration are found in Grant Thornton’s Retirement Plan Survey 2009, which is available at Grant Thornton’s website.
The Standard recommends that every plan adopt an Investment Policy Statement, follow it and document that it is being followed. We offer a sample Investment Policy Statement that can serve as the outline for plan sponsors developing policies appropriate for their own plans.
View The Standard’s brochure, Investment Policy Statements: A guide to developing a statement for your plan.
