Retirement Readiness: A Global Challenge
The U.S. isn’t alone in facing a retirement readiness challenge. European countries are staring at many of the same problems: an aging population marked by a tidal wave of Baby Boomers in or approaching retirement, and fewer workers coming along behind them to support old-age entitlement programs like Social Security and Medicare in the US. The citizenry in those countries are […]
Meeting the Challenges of a Low Interest-Rate Environment
When it comes to interest-rate risk, the focus for the stable value industry has always been on rates rising steeply or suddenly, which would be a major change from today’s sustained low rate world. The issue for stable value is whether retirement plan participants would flee the asset class in favor of money market funds, where returns to investors tend to immediately follow in […]
New Reporting Requirements Provide Insight into Stable Value Fees
Stable value funds that are managed as individual accounts for a single retirement savings plan have the lowest expense ratios in the stable value marketplace, a new survey from the SVIA confirms. Under new Department of Labor (DOL) regulations, defined contribution plans this year began reporting to their plan participants detailed information about the costs of the investment options in their plans. The […]
A Dodd-Frank Update: Stable Value Still in Limbo
Stable value wrap contracts aren’t considered swap contracts under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010—and they won’t be unless the Commodities Futures Trading Commission (CFTC) and the Securities Exchange Commission (SEC) determine that stable value contracts are swaps. A major goal of the Dodd-Frank Act was to bring greater transparency and regulatory oversight to over-the-counter derivatives, or, in the […]
Finding Retirement Security
Stable value is in a new stage of growth and stability. At the height of the financial crisis in the last quarter of 2008, stable value funds held about $347 billion of the assets in defined contribution plans. That number rose to $423 billion by the end of 2009 or 22 percent as investors sought out less volatile investment options. By the […]
A Consultant’s Perspective on Stable Value
A lot changed in the wake of the financial crisis of 2008, including the way retirement plan sponsors and their advisors think about stable value funds. “Twenty years ago, clients wanted a fully benefit responsive, competitive yield from their stable value fund, with no onerous restrictions if they wanted to cancel their contract,” observes plan consultant Angelo Auriemma. “Then the financial crisis hit, […]
Marketplace Realities: Opportunities for Stable Value
Addressing the SVIA’s annual Fall Forum 2012 in Washington, D.C., Eric Levy, senior vice president, Product Solutions Management for Lincoln Financial Group, declared that for many retirement plan participants, the investment landscape now appears dramatically more risky than it did five years ago. Following the stock market crash that began in 2007, he noted, nearly a third of the participants in defined contribution plans who […]
SVIA Quarterly Survey in Stable Times
SVIA’s Quarterly Characteristics Survey demonstrates the virtues of stable value: consistent positive returns, principal preservation as well as having the lowest correlation to stocks as compared to other investments, which means stable value can act as a diversifier. For the third quarter of 2012, stable value fund assets included in the survey were $445 billion, […]
SVIA Elects Four Board Members
While not nearly as controversial as the national elections, the SVIA Board of Directors election held in October 2012 featured incumbents both retaining and losing seats, and the unanimous approval of a plan sponsor running unopposed. The field of candidates was especially strong this year with seven highly qualified candidates, three of them incumbents, running for only […]