By Randy Myers
Despite losing some market share over time, stable value investments continue to play a vital role for millions of retirement savers.
The Stable Value Investment Association recently examined 135,000 retirement savings plans serving approximately 42 million participants. From January 2010 through December 2019, stable value assets in these plans grew at a compound annual rate of 4.1%, increasing from $300 million to $450 million. However, total assets across these plans grew more rapidly—at an 8.4% compound annual rate—from $2 billion to $4.5 billion. As a result, stable value’s proportion of total assets decreased from 15% in 2010 to about 10% by 2019.
Marie Pillai, former vice president, treasurer and chief investment officer of General Mills Inc., reported these figures during a presentation at the 2025 SVIA Spring Seminar in April. When she retired in 2019, Pillai had been overseeing an approximately $11 billion portfolio that included pension, 401(k), health care and foundation assets.
While stable value may occupy a smaller percentage of plan participants’ retirement portfolios today, it continues to deliver exceptional performance. During the 10-year period studied by the SVIA, both stable value and intermediate-term bond funds produced 3% annualized returns. The key difference? Stable value achieved this with virtually no volatility (as measured by standard deviation of monthly returns), while intermediate-term bonds funds experienced a standard deviation of approximately 2%.
Pillai also cited a 2022 survey conducted jointly by the Employee Benefit Research Institute (EBRI) and the Investment Company Institute (ICI), which examined approximately 84,000 401(k) plans. This sample represented about 12% of all 401(k) plans nationwide, 12.3 million participants, and approximately $900 billion in assets. According to the survey, about 40% of these plans offered stable value as an investment option.
An age-based analysis of the EBRI/ICI data revealed a clear pattern in stable value usage: younger participants in their 20s allocated approximately 2% of their portfolios to stable value products, with this percentage steadily increasing to 10.6% for participants in their 60s. Across all age groups, the average allocation was 6.9%.
Interestingly, the survey found an inverse relationship between plan size and average participant balances. Small plans with up to 10 participants showed the highest average balances at $106,000, a figure that fell to $68,000 for plans with more than 10,000 participants. The average across all plan sizes was $70,000—a level, Pillai cautioned, that is “far off from any meaningful retirement savings.”
Pillai also shared case studies from three large plan sponsors to illustrate how stable value utilization has evolved:
At General Mills’ $5 billion defined contribution plan, allocations to stable value fell dramatically from 25% of plan assets in 2010 to 7% by 2024. Pillai attributed this largely to the plan’s 2013 decision to adopt a target-date fund series as its qualified default investment alternative.
At Siemens, where Pillai’s served as vice president and chief investment officer before joining General Mills, total defined contribution plan assets decreased at a 0.4% compound annual rate from 2014 to 2024, falling from $10.1 billion to $9.7 billion. However, stable value assets declined much more rapidly during that period—at an 8.2% compound annual rate—from $1.96 billion to $830 million. Consequently, stable value’s percentage of total plan assets dropped from 19.5% to 8.6%.
At 3M Co.’s $11.1 billion plan, stable value was eliminated as an investment option several years ago. Pillai explained that the plan cited two main reasons: the cost of the stable value option to participants and the existence of an internally managed money market fund that served as a competing investment option.
To grow the stable value industry, Pillai offered several strategic recommendations:
- Target the hundreds of thousands of small plans in operation nationwide as potential customers, especially those heavily reliant on their administrators for investment menu decisions.
- Continue lobbying legislators and regulators to permit the use of collective investment trusts (CITs) in 403(b) plans. According to surveys, 75% of plan sponsors would utilize stable value CITs if available, and more than 90% of advisors would recommend them.
- Pursue opportunities to include stable value in deferred compensation plans and develop creative approaches to enter the individual retirement account market.
- Enhance education for retirement plan participants about portfolio volatility management, particularly for those within 10 years of retirement, emphasizing the favorable risk/reward relationship between bonds and stable value investments.
By implementing these strategies, Pillai suggested, the stable value industry can address current market challenges and capitalize on emerging opportunities to maintain its crucial role in retirement security.
