9 Questions to Assess Stable Value MVA Equalizers

Are your retirement plan clients seeking more competitive stable value crediting rates? Transferring stable value assets to a higher rate fund or new recordkeeping provider may come with a market value adjustment.*

Your new provider may offset the MVA with an equalizer solution. With an equalizer, the stable value provider will pay the MVA, typically offering a slightly lower crediting rate or slightly higher recordkeeping fee until the expense has been recouped.

However, not all MVA equalizers, or MVAEs, are the same, and the differences can be complex.

Here are some questions you and your clients may want to ask a potential provider:

• What is your MVA recovery or repayment process?
• Is the MVA locked into a static recovery period?
• Will your recovery time frame compress with higher fund inflows?
• How much of the MVA can you cover?
• What happens if the MVA changes from hypothetical to a higher actual MVA?
• Is the MVAE payment classified as an interest-free loan to the plan?
• Are you absorbing the MVA into your own fund? If so, is there a limit to how much you will absorb?
• Is the fund portable to another provider?
• Do you offer multiple equalizer solutions with various crediting and recovery rates?

Our dedicated stable value team can help you dig into these questions and more. For assistance, contact one of our stable value experts.