Stable value is often categorized into one of three types –individually managed accounts, pooled funds, and insurance company general and separate accounts.
INDIVIDUALLY MANAGED ACCOUNTS
A stable value investment option in which the assets are owned by and managed for a specific plan’s participants. These accounts are usually managed by an independent investment management firm or by employees or affiliates of the plan sponsor. Individually managed accounts allow for a higher degree of customization than other stable value investment options. These accounts are generally only available to plans with substantial stable value assets, however, minimum account size varies by firm.
Also known as commingled investment trusts or CITs. These funds combine the assets of unaffiliated plans into one large group. Pooled funds are generally used by plans that don’t meet the minimum size for an individually managed account or do not require plan specific customization. With respect to a stable value investment option that is a commingled fund, the fund would purchase stable value investment contracts and other investments on behalf of the invested, unaffiliated plans.
INSURANCE COMPANY GENERAL AND SEPARATE ACCOUNTS
Also known as guaranteed insurance accounts, a stable value investment option entirely offered and guaranteed by a single insurance company, with the underlying assets typically managed by the insurance company or an affiliated investment manager. It is the responsibility of the plan sponsor to select the stable value solution that best fits the needs of their plan.