GIPS for the money owners

The subject of the appropriateness or ability of plan sponsors to comply with GIPS(R) (Global Investment Performance Standards) has been around since the Standards' inception; actually earlier, if we include the AIMR-PPS(R).

I recall an article in Pensions & Investments several years ago, where the author condemned the idea of compliance for pension funds. It was obvious that this fellow felt quite strongly that the Standards did not apply to those who own the money. I responded with a letter, acknowledging the accuracy of his statement, but questioning why anyone would be upset with an institution, such as a teachers' retirement fund, choosing to comply with the Standards.

A few years ago, this topic arose in the USIPC, and I was initially involved in developing draft guidance. Well, that draft has expanded and now open for public comment!

Why would a plan sponsor, endowment, etc. wish to comply? Perhaps because they see the Standards as "best practice," and believe that compliance enhances their operation, procedures, and reporting.

Among our verification clients are institutions that fall into this category. They wish to always adhere to "best practice," and see the Standards as just one more to comply with. This guidance should provide additional help to them, as well as others who are considering compliance.

If you fall into the category of an "asset owner," you'll want to download a copy, review it, and offer your comments. You have until June 3, 2013 to comment. Please do!