Defined Benefit Consulting Services
Statement of Investment Policy and Objectives
Development of Appropriate Asset Allocation
Identification and Selection of Professional Investment Managers
Quarterly Investment Performance Measurement and Analysis
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Statement of Investment Policy and Objectives
The Statement of Investment and Policy and Objectives is the constitution or bylaws of the portfolio and as such will be referred to continually by all parties involved. This document is the systematic integration of the sponsor’s attitudes, objectives and requirements expressed in terms of return expectations and risk tolerance. It is a responsibility of the Consultant to review this important document with all current and incoming parties to the investment management process.
Each client’s situation is approached as if we were a member of their staff. Investment objectives are based on the needs of the plan and on the financial conditions of the sponsor.
The specific steps are:
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Initially we review current policies and procedures
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The next step is to review sponsor information and actuarial reports
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When appropriate, we then have the Board complete individual risk profile questionnaires
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Staff is then interviewed staff for background and current operating procedures
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After completing the steps above, using asset allocation models, we present the Board with alternative investment scenarios to arrive at decisions regarding the target asset mix, allocation ranges, investment styles and rebalancing strategies
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The Board determines the appropriate risk level, asset classes and diversification requirements
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We then prepare or revise, when necessary, statements of investment policy – including investment goals, objectives and procedures and manager guidelines for Board approval. Each fund is reviewed on a quarterly basis to ensure the investment policy is being adhered to and investment strategies are reviewed, so that adjustments can be made to respond to market conditions and trends.
The Statement of Investment Policy and Objectives covers:
Delegation of Responsibilities
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Investment Committee of Sponsor
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Consultant
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Investment Managers
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Plan Trustees and Custodian Bank
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Plan Component Guidelines
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Equity
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Fixed Income
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Cash
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Specialized Asset Categories
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Investment Objectives
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Rate of Return Objectives
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Corresponding and Relative Objectives
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Performance Measurement
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Investment Manager Relations
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Communications
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Meetings
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Plan Structure
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Asset Allocation
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Overall Fund Guidelines
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Manager Guidelines
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Investment Management by Style
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Descriptions and Constraints
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