While there is no legal requirement to govern retirement plans in any particular fashion, the following are well-established ‘best practices’ among mid- to large-sized retirement plans. These principles apply to both defined benefit and defined contribution plans, unless otherwise stated.
§ A formal Investment Policy Statement, including
§ long term objectives for each plan
§ investment beliefs and philosophies
§ the process for determining and maintaining asset allocation strategy
§ the process for consideration of new or alternative investment opportunities
§ risk and return expectations on both an absolute basis, and relative to appropriate market indices
§ investment guidelines and restrictions
§ summary of the process of monitoring performance
§ criteria for assessment of the suitability of investment products and asset classes
§ responsibilities of the fiduciary and other parties to the governance process
See full Article.
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