How plan sponsors should respond to 401(k) money market fund rules

Plan sponsors should consider stable value and guaranteed rate funds which guard against loss of principal but may have redemption fees and liquidation window restrictions. These funds have yields that are much higher than government and prime money market funds. Recent fiduciary breach lawsuits filed against plan sponsors for using money market funds instead of stable value funds are another reason to consider stable value and guaranteed rate funds. These lawsuits have been filed because of the low yields that money market funds have paid in comparison.

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