Investment Policy Statement (IPS)

What this video covers

• Why an IPS is not legally required by ERISA, and why the exam repeatedly traps students into thinking it is
• The core components of a well-drafted IPS: plan objectives, asset allocation targets and ranges, selection criteria, monitoring criteria, benchmarks, rebalancing policy, and roles and responsibilities
• How an optional IPS becomes a governing plan document that legally binds fiduciaries to its own terms
• Why ignoring your own IPS triggers a breach of the fiduciary duty to follow plan documents
• The distinction between process and outcomes: how a documented prudent process protects fiduciaries even when investments lose money
• Why contemporaneous evidence created at the time of decision matters more than hindsight results in ERISA litigation
• How the IPS functions as an accountability framework that prevents emotional or ad hoc decision-making