A Fine Line: Can Wrap Contract Provisions Become Too Restrictive?
By Randy Myers The stable value industry sailed through the financial crisis of 2008 with minimal disruptions. Market-to-book-value ratios for the average stable value fund fell during the market downturn and have since recovered on average to better than 100 percent. Throughout the market volatility of the past three years, investors in stable value funds […]
Behind the Curtain: 401(k) Particpants Ride Out Market Storms
By Randy Myers Many investors panicked during the stock market downturn that stretched from late 2007 to early 2009, but investors in 401(k) plans proved remarkably unflappable. In examining the retirement plans T. Rowe Price Group Inc. administers on behalf of clients, it found that the percentage of eligible employees who participated in those plans […]
Hunt Cautions Against Premature Spending Cuts—Or Counting Out President Obama
By Randy Myers Congressional Republicans won big in the recent midterm election, often running on an anti-spending platform. But cutting federal spending too soon could be a mistake, warns Al Hunt, Washington managing editor for Bloomberg News. It also could be a mistake, he says, to assume that the GOP’s big showing in 2010 will […]
Post-Mortem: The Midterm “Recession Election,” and a Look Ahead to 2012
By Randy Myers Republicans may have manhandled Democrats in the recent midterm election, but it’s probably too soon to assume their victory will carry over to a win in the White House in 2012, says political pundit David Wasserman, house editor of the Cook Political Report. Addressing the 2010 SVIA Fall Forum, Wasserman attributed the […]
Why Governmental 457 Plans Like Stable Value
By Randy Myers Stable value funds have long been popular with so-called “457” plans–supplemental retirement savings plans that function much like 401(k) plans but are marketed mostly to government employees. Still, there are steps the stable value industry could take to preserve its favored position in that marketplace, says Maryland Assistant Attorney General John Barry, […]
401(k) Balances Improving, But Participants Still Need to Save More
By Randy Myers The average 401(k) account balance has improved significantly since the stock market downturn that ran from late 2007 to early 2009, but Americans still need to save more for retirement, according to Winfield Evans, leader of investment strategy for Aon Hewitt’s defined contribution outsourcing business. Participants in 401(k) plans enjoyed a median […]
Stable Value Continues to Deliver on Its Promise
By Randy Myers In an uncertain economic environment, stable value funds have continued to deliver to investors what they have long promised–long-term returns comparable to those available from intermediate-term bond funds but without the corresponding short-term volatility–SVIA president Gina Mitchell told participants at the organization’s 2010 Fall Forum in Washington, D.C. Since the end of […]
Why Stable Value Makes Sense as a Source of Retirement Income
By Randy Myers Many financial experts are touting immediate annuities as a tool for generating retirement income. Behavioral economics suggests they may want to look at stable value funds, too. The problem with immediate annuities, author John Nelson told participants at the 2010 SVIA Fall Forum, is that they require retirees to exchange a lump […]
How Asset Allocation Models Handle Stable Value Funds
By Randy Myers Given their hybrid nature–they generate returns comparable to those available from intermediate-term bond funds, but with low volatility similar to money market funds–stable value funds have never been particularly easy to account for in asset allocation models. But leading financial services firms appear to have found solutions that make them comfortable. Mutual […]