Mainspring Connection

Spring 2012

Questions To Ask Stable Value Fund Providers

1. Describe your firm's stable value product offering. Is the stable value fund a commingled product, general account or separate account?

2. Is stable value a core competency of the provider?

3. Is participant principal and interest fully guaranteed?

4. Is there a minimum interest rate guarantee to participants?

5. Describe the investments underlying the stable value fund and provide the asset allocation percentage.

6. Describe your internal credit quality research and risk management process.

7. Has your firm experienced any difficulties in accessing wrap capacity in the past five years? If so, how has your firm addressed this situation?

8. Are there any conditions under which the guarantee provider can back out?

9. How strong is the guarantee in terms of the level of capital that has been reserved to back the guarantee and the credit ratings of the guarantee provider?

10. What are your company's financial strength ratings, including A.M. Best, Fitch, Moody's and Standard & Poor's?

11. What are the fees and asset minimums to access the product?

12. Is the fund liquid to participants for benefit payments and investment transfers?

13. Describe the termination process for your stable value option. Is there a waiting period currently in force for plan-level withdrawals?

14. Is your fund portable? Can the fund continue to be used as an investment option in the event of a change in recordkeeper?