Trustee
The person(s), bank or trust company that has responsibility over some or all financial aspects (receipts, disbursements, and investments) of a defined contribution plan or defined benefit plan. Most institutional trustees serve as “directed trustees” that are subject to direction by a plan’s named fiduciaries.
Benefit-Responsive
The ability to transact at book or contract value for benefit payments.
Comptroller of the Currency, Office of the (OCC)
A federal agency that charters and regulates national banks, including a bank’s collective trusts. State-chartered banks are not subject to OCC jurisdiction, but many state banking regulations are similar to the OCC’s. Click here for offical website.
Diversification
The use of a variety of investments in an effort to reduce risk exposures.
Financial Accounting Standards Board (FASB)
The FASB is a private, not-for-profit, independent organization whose primary purpose is to develop generally accepted accounting principles (GAAP) for publicly held companies within the United States. The SEC, which has legal authority to establish financial accounting and reporting standards for publicly held companies under the Securities Exchange Act of 1934, designated the FASB as […]
Investment Contract
Any of a variety of stable value contracts including bank investment contracts, traditional GICs, separate account GICs, and synthetic GICs. Within a stable value investment option, such contracts are benefit-responsive, meaning they permit, subject to their terms and the plan’s rules, participant initiated transactions at book value. Investment contracts may have a fixed or floating interest rate, which may not be less than 0%. […]
NAIC
See National Association of Insurance Commissioners.
Pooled GIC Fund
A stable value investment option, typically offered by an insurance company, consisting of a group annuity contract that covers many, usually smaller plans. (See also guaranteed insurance account.)
Spread
A spread is the difference between the actual earnings on some investment contracts offered by insurance companies, such as traditional GICs or general account stable value investment options, and the crediting rate that is declared and guaranteed by the insurance company for a given period. While there is no certainty an insurance company will earn a targeted spread, the anticipated spread is used to […]
