The error seen in the Policy Server smps log file is usually caused by the 'max-op-size' setting on the CA Directory side.
'max-op-size' limits is the number of entries that can be returned by a single search request. This is known as an administrative size limit.
The Policy Server on startup attempts to read all the objects from the policy store to cache the entire store.
If you have a large store, the 'max-op-size' defined can be reached which causes the Policy Server to fail on startup.
The 'max-op-size' can be found under under the limit config file used by the DSA on the CA Directory side.