An Investment Policy Statement (IPS) is a formal document that establishes the objectives and criteria for managing the investments that fund your plan. The IPS defines how investment options are selected, monitored and evaluated.
A plan is not required to have an IPS. However, ERISA encourages fiduciaries to set a policy in writing. Creating an IPS can help you document that you are meeting your fiduciary responsibilities under ERISA.
Investment policies can vary from plan sponsor to plan
sponsor. You may use this
sample IPS 
as a guide in creating a statement specific to
your plan. The sample statement is based on recommendations from
the Profit Sharing Council of America (PSCA). The PSCA is a
non-profit association that advocates increased retirement
security through profit sharing, 401(k) and related defined
contribution programs.
Once you’ve established your plan’s investment policy, you should periodically review it to ensure that it continues to be appropriate for your plan, and to revise it as needed.