Regent Policy Documents

SECTION 31: TRUST AND INVESTMENT POLICIES

31-9 INVESTMENT POLICY STATEMENT: KEY ELEMENTS AND REVIEW PROCESS

(Formerly 91-11)

Scope

This policy applies to the invested assets of University of Wisconsin Trust Funds.

Purpose

The purpose of this policy is to provide the key elements which are to be incorporated into a fuller, more detailed stand-alone document, the “University of Wisconsin System Trust Funds: Investment Policy Statement” (IPS), and the process the Board uses for regularly reviewing these key elements and the IPS in its entirety.  In broad terms, the IPS should provide the guiding principles for all aspects of the management of entrusted assets and the premises on which these principles rest. 

Policy Statement

Key elements of the Board’s IPS for the University of Wisconsin Trust Funds include the following:

Premises, which are to discuss the underlying bases for the policies and their implementation, and fall into these main categories:

  • Investment objectives, constraints, and competencies
  • Core investment philosophies and beliefs

Investment Policies, which are to describe specific policies adopted to attain identified objectives while conforming with the major premises, and fall into these main categories:

  • Asset allocations, policy portfolios, and benchmarks
  • Other investment and risk management policies and practices

Implementation, which is to describe by whom and how the policies are to be implemented, and fall into these main categories:

  • Roles and responsibilities
  • Investment manager selection, retention, and termination
  • Avoidance of conflicts of interest

Evaluation, which is to describe how success will be monitored and evaluated, and falls into these main categories:

  • Monitoring and measuring success
  • Reporting and communication standards

Appendices, which are to provide greater detail on various policy elements discussed at a broader level in the main body of the document, and should include the following:

  • Detailed asset allocations and benchmarks for each of the investment funds
  • Spending policy for the Long Term (Endowment) Fund

Given the centrality of the IPS itself in ensuring that the Board meets its fiduciary responsibilities and effectively oversees the management of the investment program, it is imperative that the Board review the IPS on an on-going basis.Although long-range and strategic in nature, the IPS should nevertheless be considered a living document; revisions and further refinements may be required as and when goals, constraints, or external market conditions change significantly.  Therefore, the Board will annually review, reaffirm, and/or adopt any necessary revisions to the full IPS document.

Oversight, Roles, and Responsibilities

The Board of Regents is the principal and ultimate fiduciary for the University of Wisconsin System Trust Funds.  The Board of Regents Business, Finance, and Audit Committee  is delegated oversight of the management and administration of the Trust Funds, including the authority to hire investment counsel, subject to Board approval, and to give discretionary authority to investment counsel in the purchase and sale of securities within guidelines determined by the Committee.  The Trust Officers of the Board are responsible for receiving, managing, and maintaining records of all trust funds of the University of Wisconsin System and performing other duties relating to trust funds imposed by law and the rules and policies of the Board.

The IPS further defines the roles and responsibilities of the Board and/or its Business, Finance, and Audit Committee as the following:  to regularly review and approve the Investment Policy Statement, which is to include asset allocations and spending policies for the investment funds, and to annually elect all UW System Trust Officers.  The Trust Officers of the Board have the duty to otherwise implement, conduct, oversee, and monitor all other aspects of the management and administration of the UW System Trust Funds.

Related Regent Policies and Applicable Laws

Wis. Stat. s. 36.29
Wis. Stat. s. 112.11 (“UPMIFA,” the Uniform Prudent Management of Institutional Funds Act)
Bylaws of the Board of Regents of the University of Wisconsin System
University of Wisconsin System Trust Funds:  Investment Policy Statement

History: Res. 5555, adopted 07/13/1990, created Regent Policy Document 90-4; Res. 6390, adopted 05/07/1993, amended 90-4; action taken by Business and Finance Committee, 10/06/1995, amended 90-4; Res. 8324, adopted 03/09/2001, amended 90-4; Res. 8640, adopted 12/06/2002, amended 90-4; Res. 9030, adopted 06/10/2005, amended 90-4, subsequently renumbered 31-8. Res. 7770, adopted 09/11/1998, created Regent Policy Document 98-5, subsequently renumbered 31-14. Res. 5946, adopted 11/08/1991, created Regent Policy Document 91-11; Res. 5999, adopted 02/07/1992, amended 91-11; Res. 6260, adopted 11/06/1992, amended 91-11; Res. 6343, adopted 03/05/1993, amended 91-11; Res. 6487, 09/10/1993, amended 91-11; Res. 7364, adopted 12/06/1996, amended 91-11; Res. 7776, adopted 10/09/1998, amended 91-11; Res. 8090, adopted 03/10/2000, amended 91-11; Res. 8325, adopted 03/09/2001, amended 91-11; Res. 8640, adopted 12/06/2002, amended 91-11, subsequently renumbered 31-9; Res. 9419, adopted 12/07/2007, rescinded and replaced 31-9; Res. 10145, adopted 12/07/2012, amended Regent Policy Document 31-9, and rescinded Regent Policy Documents 31-8 and 31-14. 


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The Regent Policy Documents were adopted and are maintained pursuant to the policy-making authority vested in the Board of Regents by Wis. Stats. § 36. The Regent Policy Documents manifest significant policies approved by the University of Wisconsin System Board of Regents. This document is a ready reference for those charged with carrying out these policies. Unless noted otherwise, associated documents and reports may be obtained from the Office of the Secretary of the Board of Regents, 1860 Van Hise Hall, 1220 Linden Drive, Madison, WI 53706, ph 608-262-2324. http://www.uwsa.edu/bor/policies/