Evaluating Capital Preservation Options

In light of US money market reforms, many defined contribution (DC) plan sponsors are weighing the pros and cons of their capital preservation choices in terms of yield, daily liquidity needs, net asset value stability and liquidity restrictions.

DC plans have typically selected between money market and stable value funds as their capital preservation option. However, recent reforms to the rules governing money funds will add administrative complexity to institutional prime funds frequently used in DC plans, causing plan sponsors to reevaulate their capital preservation options. In this new article, we briefly outline the new money market fund regulatory reforms and their impact on DC plans. 

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