Synthetic GIC (also known as a “synthetic” or “synthetic investment contract”)
A stable value investment structure that offers similar characteristics as a guaranteed investment contract, i.e., pays a specified rate of return for a specific period of time, is benefit-responsive, and offers book value accounting. A synthetic GIC includes an asset ownership component and a contractual component that is intended to be valued at book value. The associated assets backing the contract’s […]
Bank Collective Trusts
See commingled fund.
Claims Paying Ability Rating
An evaluation by an NRSRO of the financial strength and relative ability of an insurance company to pay claims on its insurance policies or contractual liabilities as distinct from its debt obligations.
Default Risk
See credit risk.
Experience-Rated
See participating contract.
Impaired Securities
A security, the principal and/or interest of which has not been paid in accordance with its contractual terms, e.g., has been forced to make accelerated payments, has failed to make payments when due, has reduced either the principal or interest terms from the contractual terms, or, in a stable value investment contracts, no longer meets the required investment guidelines.
Maturing
A stable value investment strategy that employs a portfolio of actively managed assets but the associated investment contract either may have a defined maturity date or may not have a defined maturity date but allows periodic payments of principal and interest from the assets for liquidity purposes. (Compare to buy and hold and constant duration.)
Participant-Initiated Withdrawals
Withdrawals or transfers requested by participants without any influence, inducement, or prompting by the plan sponsor or other plan intermediaries.
Self-Directed Brokerage Window
A structure some plan sponsors incorporate into their plan design that gives participants the opportunity to supplement a plan’s core investment option menu through self-directed trading access in an in-plan brokerage account. Access to the brokerage window may allow participants to trade stocks, bonds, mutual funds, and exchange-traded funds. Participants typically pay additional fees for access to the brokerage window. (See […]
