Stable Value Funds Offer Welcome Security

December 29, 2020
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Retirement plan sponsors and participants may be feeling anxious about low interest rates and ongoing market uncertainty. Stable value funds — with guaranteed interest rates, safety of principal and liquidity — can give them the stability they’re craving.

Explore the features of stable value funds to see if they’re a good option for your clients.

Learn More, Offer More

Evaluating investment options is essential to the service you provide your clients. The more you know about this asset class, the more value you can offer.

Our team of stable value experts can offer education, information and due diligence tools. Contact your retirement plan consultant if you would like an introduction to this team.

Support better participant outcomes

Most retirement plans select a money market or a stable value fund for the lineup’s most conservative asset class. Both options can offer stability and liquidity. Money market funds, however, generally do not provide a guaranteed rate of return. And, in a low-interest-rate environment, the interest on money markets can drop to zero. The yield on money market funds hasn't exceeded 1% since March 2020.

Fixed-rate stable value funds offer competitive returns compared to money market funds, plus a guaranteed rate of return. Some stable value funds, like those from The Standard, also provide investors with a minimum interest rate of 1%.

With historically higher rates and guaranteed income, stable value funds can support better participant outcomes.

Offer peace of mind

The principal guarantee built into stable value funds can give plan participants greater peace of mind. For those planning to retire soon, this protection can be crucial.

Focus on liquidity

Stable value funds focus on capital preservation and liquidity to provide steady, positive returns for participants. Regardless of what happens to the markets, plan participants will receive book value — principal and accrued interest — for their investments.

Choose portability

Some stable value funds, like those from The Standard, are fully portable. Plans and their participants can keep them as an investment option if there’s a change in recordkeeper.

Seek predictable returns

A stable value fund’s crediting rate is typically guaranteed by contract and announced in advance. At The Standard, the promise that the crediting rate will never fall below a stated minimum can be an advantage for plan participants hurt by market volatility. If they’re seeking a predictable return on investment for their savings, stable value funds might be the right choice.

Offer high quality investments

Stable value funds typically offer high quality, well-diversified portfolios of fixed-income instruments. This may appeal to risk-averse or soon-to-be-retiring plan participants looking for more certain returns on their investment.

Find a quality issuer

A variety of issuers offer stable value investments. Be sure to evaluate the financial strength of companies before you choose one. At The Standard, our full guarantee of principal and interest are backed by Standard Insurance Company. Our stable value funds can be offered as investment-only options to 401(k), 403(b), 401(a), 457(b), 457(f), 409A, cash balance, defined benefit, HSA/HRA plans and force-out IRAs. Learn more at standard.com/stablevalue.

 

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