First few Article Sentences
HAVE A PLAN
Retirement laws and prudent investor regulations require that plan sponsors, investment committees and advisors (all legally defined as “fiduciaries”) act with the skill, care and diligence of a “prudent expert.” Many legal and investment observers interpret this to mean that, at a minimum, the organization and supporting professionals adopt a defined and documented process, based upon an investment policy that lays out the objectives, constraints, preferences, procedures and practices that will be utilized in the fulfillment of the plan’s investment mission.
These standards apply not only to pension plans which directly impact the balance sheet and income statement of the organization (including net worth and profitability in some years), but also defined contribution retirement plans such as 401(k), 403(b), 457 arrangements and even foundation and endowment accounts.