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.
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 […]