Wash
See equity wash.
Book Value (also known as “contract value”)
For a stable value investment contract, the value of initial deposited principal, plus accumulated interest, plus additional deposits, minus withdrawals and expenses. The book value of an investment contract is the amount owed by the issuer to the contract-holder on behalf of the plan participants, subject to certain terms and conditions. (See also market value.)
Contract Issuer Risk
The risk an investment contract issuer could default, become insolvent, file for bankruptcy protection, or otherwise be deemed by the plan’s or trust’s auditor to no longer be financially responsible.
EBSA
See Employee Benefits Security Administration.
GASB
See the Governmental Accounting Standards Board.
Investor
See participant.
Non Benefit-Responsive
This term is used to describe investment contracts that do not meet the requirements of Statement of Position 94-4-1 or FASB Statement of Position AAG INV-1. Non-benefit responsive investment contracts may not be accounted for at book value. (See also benefit-responsive and book value accounting.)
QPAM (Qualified Professional Asset Manager)
A registered investment adviser, bank or insurance company that meets certain requirements specified by the DOL (i.e., independence from the plan sponsor and minimum equity capital and for registered investment advisers, assets under management tests). A QPAM is important to the stable value market because the DOL has issued an exemption that permits a QPAM to engage in otherwise prohibited transactions […]
Stable Value Manager
Refers to an investment manager, typically a QPAM, responsible for management and oversight of a stable value investment option. The stable value manager may manage all or only some of the associated assets of the stable value investment option.
