“Tried and true” speaks volumes about the core values of a lesser-known defined contribution plan option: stable value funds.
Stable value funds have been around for decades and have served as a strong investment option for plan sponsors looking to provide a safe retirement savings offering.
While these core qualities have always been true, recent changes to money market funds enacted by the Securities and Exchange Commission (SEC) last fall have caused many plan sponsors to take a fresh look at a stable value fund alternative.
As you look to incorporate stable value funds into your clients’ 401k portfolios, here are three key advantages to highlight:
Attractive yield in an uncertain marketplace
Stable value funds have historically offered attractive yields as compared with their money market fund brethren. This has been especially true during the low-interest rate environment of recent years. Furthermore, new SEC restrictions will likely make it even tougher for money market fund returns to keep up in the future.