One of the most important steps in establishing your trust fund is development of the investment policy, the roadmap for investment of your OPEB trust. The Wisconsin OPEB Trust uses a 4-step process, enabling governing bodies to set direction for investment of OPEB trust funds.
Step 1: Set Financial Objectives
In determining financial objectives, the Wisconsin OPEB Trust will work with a district to identify goals, time horizon for which the funds will be invested and risk tolerance.
Step 2: Define Investment Strategy
Using the financial objectives as a starting point, the Wisconsin OPEB Trust recommends an asset allocation model to meet the needs of school districts or municipalities.
Step 3: Select Investments
With asset allocation identified, the investment manager will design a portfolio for a school district, state or local government agency. Diversification and asset allocation are based on previously defined financial objectives and investment strategies.
Step 4: On-going Review
Portfolio performance is monitored and each portfolio is reviewed and rebalanced (frequency) to comply with your investment policy. Additionally, your school district or government agency will receive quarterly performance reports and an annual account statement, summarizing the fund’s performance. Investment managers work with you to evaluate and refine your investment strategy, as needs or conditions change.
Additionally, your boards or councils must establish a Trust Oversight Committee to oversee investment performance. As with any investment, past performance does not guarantee future results.
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