Although federal benefit law does not currently require and Investment Policy Statement (IPS), it does require that fiduciaries "provide a procedure for establishing and carrying out a funding policy and method consistent with the objectives of the plan." Simply put, the IPS creates a framework of a plan's investment goals and a roadmap for the investment manager on how to achieve those goals. A recent survey of plan sponsors found that more than 80% have an IPS. But the real question should be, how many sponsors are actually reviewing and keeping the IPS up-to-date?

An IPS should be specific enough to address the unique features of the plan and should not be a simple declaration of investment rhetoric. It usually contains information on the selection of investment options offered to participants, and should detail the "how" and "when" investment options are monitored and reviewed.

Plan sponsors wishing to make any changes to their retirement plan, such as providing automatic enrollment, managed accounts, lifestyle/lifecycle funds, or individual brokerage accounts should assess the impact to the IPS and make changes to the IPS, if necessary. In today's world of fiduciary accountability, an up-to-date IPS can be a fiduciary's greatest asset.