Defined Contribution

DC Plans and Investment Policy Statements

Investment Policy Statements to Keep the DC Plan on Track
clock

Yogi Berra’s wisdom is particularly apt for investment policy statements (IPS): On the one hand, an investment committee that tries to manage its DC plan without an IPS is apt to lose its way. On the other hand, if—like the Yogi Berra quote—an IPS is unclear or confusing, it can also lead to bad outcomes.

In the latest edition of the DC Observer, I describe the best approach for defined contribution (DC) plan sponsors when it comes to crafting and implementing their IPS and the role it plays in investment committee decision making.

I advise sponsors to define the purpose of the IPS up front. It should also outline the roles and responsibilities of the committee; the plan’s investment structure; the sponsor’s approach to evaluating and monitoring managers; the method for handling investments with special circumstances such as company stock; the plan’s policy on fees; and the committee’s process for reviewing and updating the IPS.

To paraphrase Berra, writing an IPS is 90% creating a sound road map for the committee; the other half is keeping it simple.

To learn more, find the full paper here.

Lori Lucas, CFA, is Callan’s defined contribution (DC) practice leader.

Posted by

Share
Share on facebook
Share on twitter
Share on linkedin
Related Posts
Operations

Financial Wellness: Is It the Right Prescription for Your DC Plan?

Jana Steele
Jana Steele provides a summary of her recent white paper on financial wellness options for DC plans.
Operations

DOL Proposes Tightened Proxy Voting Guidelines

Patrick Wisdom
The department’s new proposal dovetails with SEC guidance finalized in 2020 and would create a refined set of circumstances in which plan fiduciarie...
Operations

Fine-Tuning Implementation of the CARES Act

Jana Steele
The IRS has issued two notices and a FAQ to clarify how defined contribution (DC) plan sponsors should implement the provisions of the act, touching o...
ESG

DOL Calls for Stricter Rules Around ESG Investing in Retirement Plans

Thomas Shingler
Operations

Our DC Index Had a Noteworthy First Quarter

Patrick Wisdom
Operations

DOL Issues Common-Sense Information Letter About Private Equity in DC Plans

DC Consulting Group
Operations

Callan Survey: DC Plan Response to CARES Act Varied by Industry and Recordkeeper

Jana Steele
Operations

Freezing or Suspending Matching Contributions: Requirements and Timing

Jana Steele
Operations

Guidance on Substantial Workforce Cuts and DC Plan Terminations

Jana Steele
Operations

Balancing ERISA Rules With Current Economic Concerns

Jana Steele

Callan Family Office

You are now leaving Callan LLC’s website and going to Callan Family Office’s website. Callan Family Office is not affiliated with Callan LLC.  Callan LLC has licensed the Callan® trademark to Callan Family Office for use in providing investment advisory services to ultra-high net worth clients, family foundations, and endowments. Callan Family Office and Callan LLC are independent, unaffiliated investment advisory firms separately registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940.

Callan LLC is not responsible for the services and content on Callan Family Office’s website. Inclusion of this link does not constitute or imply an endorsement, sponsorship, or recommendation by Callan LLC of their website, or its contents, and Callan LLC is not responsible or liable for your use of it. When visiting their website, you are subject to Callan Family Office’s terms of use and privacy policies.