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- Wiley
More About This Title How to Write an Investment Policy Statement
English
SECTION ONE: Why Plan Sponsors and All Fiduciaries Need a Formal Process for Writing Their Investment Policy Statement
Chapter 1 ERISA AND THE CHALLENGE OF FIDUCIARY RESPONSIBILITY 19
Writing an Investment Policy 19
What Is a Fiduciary? 20
Fiduciary Liability 21
Chapter 2 YOUR FIDUCIARY RESPONSIBILITIES AND LIABILITIES UNDER ERISA 23
Five Fiduciary Responsibilities 23
Fiduciary's Personal Liability 24
A Fiduciary's Primary Role Is to Manage the Process 25
Chapter 3 WHAT IS AN INVESTMENT POLICY STATEMENT AND WHAT ARE THE BENEFITS? 27
Risk Management 27
Monitor Investments 28
Summary 29
Chapter 4 UTILIZE THE “SAFE HARBOR” PROVISIONS PROVIDED BY ERISA 31
Prudent Experts 31
Five Recognized "Safe Harbor" Rules 31
Chapter 5 COMPLYING WITH ERISA SECTION 404(c) 33
SECTION TWO: How to Get Started and Steps to Formalize the Process
Chapter 6. ASSEMBLING THE DOCUMENTATION 37
Chapter 7 STEPS TO FORMALIZE THE PROCESS 39
STEP 1: Decide on Plan Goals, Objectives, and Strategies 39
STEP 2: Decide on Strategy for Managing Risk 39
STEP 3: Determine the Risk Tolerance of the Plan 40
STEP 4: Set Forth Guidelines for Asset Classes 41
STEP 5: Implement an Asset-Allocation Policy 41
STEP 6: Mutual Funds Recommendations 41
STEP 7: Delegate Investment Management Responsibility 42
STEP 8: Investment Monitoring and Reporting 42
SECTION THREE: The Template IPS
Chapter 8 SAMPLE IPS TEMPLATES 45
Two Distinct IPS Samples 45
Organization of Templates 45
Chapter 9 SAMPLE IPS TEMPLATE #1: For Participant-Directed 401(k) That Intends to Comply with ERISA Section 404(c) 47
STEP 1. Executive Summary and Background 47
STEP 2. Purpose of the Investment Policy Statement 48
STEP 3. Duties and Responsibilities 50
STEP 4. Asset Class Guidelines 52
STEP 5. Investment Manager Selection 54
STEP 6. Monitoring the Investment Managers 55
STEP 7. Controlling and Accounting for Investment . Expenses 57
STEP 8. Investment Policy Review and Monitoring 58
Chapter 10 SAMPLE IPS TEMPLATE #2: For High-Net-Worth Individual Setting Up a Family Trust 59
Executive Summary 60
PART I—Purpose 61
PART II—Investment Management Objectives 61
PART III—Roles and Responsibilities 62
PART IV—Investment Manager Selection 63
PART V—Investment Monitoring and Review 65
PART VI—Manager Termination 67
PART VII—Additional Provisions (optional) 67
Conclusion
MESSAGE TO PLAN SPONSORS 69
Glossary 71
The Firm Profile 79
About the Author 87
