The investment mission and supporting goals are clearly defined and have commitment from the relevant stakeholders.

For social security institutions that have an investment mandate, legislation, policy or decree may establish the general direction of the investment policy and prescribe the types of allowed investment instruments. Furthermore, in order to maximize the long-term rate of return on reserves while at the same time mitigating investment risks and taking into account the nature of liabilities, the range of instruments allowed for investment should be sufficiently diversified. There are a number of factors influencing the investment strategy of an institution including the security of investments, expected rates of return, cash flow issues and the nature of the liabilities of the organization. For institutions using external managers, it is also important that the missions and goals are clearly defined and communicated appropriately.