Policy and Governance

Policy and Governance

Pension policies help to establish governance over a pension program. A formal policy is a governing document in which the governing board and other key stakeholders set broad policy parameters on the pension system. Elements of a pension policy include:

  • A statement on rationale for having the policy as well as the investment goals
  • Roles and responsibilities of key decision makers, including the governing board, the chief executive officer, the chief investment officer, and external investment professionals, as applicable
  • Standard of prudence that the decision makers are expected to meet in carrying out their investment responsibilities
  • A summary of the plan’s long-term asset allocation strategy
  • A statement to periodically align the portfolio to the asset allocation strategy
  • Investment guidelines for internal managers and/or external investment professionals to adhere to, in order to mitigate risk
  • Periodic performance and evaluation reports of the plan and its investments
  • Guidelines for proxy voting and other issues related to the plan’s corporate governance

Government Finance Review Articles


Pension and Benefit Administration Best PracticesLive Training, 
  • March 22, 2018