Editor’s Corner: Stable Value: Ever Evolving
By James King, Head of Prudential Retirement’s Stable Value Markets Group Stable value is a lot like Clark Kent?mild mannered and rather undistinguishable?until a threat looms. Like Kent’s alter-ego Superman, stable value kicks into hero mode to preserve participants’ capital and provide consistent, positive returns in any given economic cycle. With its ever-evolving nature, like […]
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 […]
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 […]
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, […]
Stable Value Industry Urged to Articulate Risk Management Processes
By Randy Myers Stable value investment managers and wrap issuers devote huge chunks of their time to managing risk. Now it’s time to start documenting those efforts, says Susan Mangiero, managing director of Fiduciary Leadership LLC, an independent research and training company serving institutional investors. Regulatory and legal developments have much to do with the […]
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 […]
Public and Private Pension Plans Face Funding Gap
By Randy Myers Each year, researchers at investment consulting firm Wilshire Associates study the health of the nation’s largest public and private pension plans. Lately, their findings have been discouraging. “It’s not great,” Wilshire managing director James Neill told participants at the 2010 SVIA Fall Forum. “At the end of the last decade, things were […]
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 […]
The Labor-Treasury Agenda: Improving Defined Contribution Plans
By Randy Myers The federal government wants defined contribution plans to work more effectively for their participants. Retirement savings plans are looking healthier than they did just a short while ago, but total plan assets slipped to $2.7 trillion in 2008 from $3.8 trillion in 2007. They have rebounded to $3.5 trillion by the first […]