Withdrawal Risk
See cash flow risk.
Book Value Accounting
The accounting methodology allowed under AICPA Statement of Position (SOP) 94-4-1 and FASB Statement of Position (FSP) AAG INV-1 by which the valuation of a fully benefit-responsive stable value investment contract is allowed to be reported at book value with market value or fair market value provided as additional disclosures. (If the plan sponsor is a governmental entity the accounting methodology is described under GASB Statement No. 53.) Certain pre-defined criteria by FASB […]
Contract Value
See book value.
Effective Annual Yield
The compound yield associated with a periodic interest rate based on the frequency of interest payments per year. As an example, if the annual interest rate is 3%, interest is credited semi-annually and the periodic interest rate is 1.5%, then the effective annual yield is 3.02%, calculated as follows:(1.015 x 1.015)-1= 3.02%. (See also crediting rate.)
General Account GIC
See traditional GIC.
Lesser of Book and Market Withdrawal
A type of plan-initiated withdrawal for plans departing certain commingled funds or insurance company stable value investment options that allow the departing plan to withdraw its investment at either the book value of the investment contract (or stable value investment option) or the market value of the associated assets supporting the book value of the investment contract (or stable value investment option), whichever is lower.
Non-Participating
A characteristic of certain investment contracts, such as a traditional GIC, such that the contract’s crediting rate is not affected by the contract’s cash flow experience or the performance of the associated assets.
Qualified Withdrawals
See book value withdrawals.
Standard & Poor’s Ratings Service
See NRSRO. Click here for official website.
