By Randy Myers
After more than three decades of explaining stable value to retirement plan sponsors, the industry is once again grappling with a familiar challenge: articulating the role of a long-term product in a world increasingly focused on short-term results.
That challenge was a central focus of a panel discussion at the 2026 Stable Value Investment Association Spring Seminar, in which industry veterans reflected on what’s working with stable value, what isn’t, and how stable value must evolve to remain relevant with plan sponsors, advisors, and consultants. The conversation was led by moderator Yolanda Reyes White, relationship manager at Principal Morley. She was joined by Preet Prashar, director of defined contribution (DC) strategic research teams at Mercer, who provided recent stable value and money market context; Karen Chong-Wulff, founder and principal of Samaritan Consulting; and Joe Dionne, vice president at J.P. Morgan Asset Management.
At its core, the discussion underscored a simple but persistent reality. While stable value has continued to behave as designed, that hasn’t stopped some plan sponsors from questioning its place in the rising-rate environment that emerged after the Federal Reserve began a series of rate hikes in March 2022.
While stable value funds are designed to smooth out sharp market moves like those triggered by the Fed, money market funds are not. Consequently, the latter track rate increases much more quickly. (They also invest in shorter-term assets, tying their returns more closely to interest-rate changes.)
Periods in which cash outperforms stable value historically have tended to be short-lived, but they can sometimes linger for a few years, as has happened since 2023. In fact, only recently have some stable value crediting rates started to once again outdistance money market yields.
In the meantime, “we’ve been explaining why the money market is beating us” for the last three years, Reyes White said in opening the session.
Panelists agreed that most plan sponsors understand the current dynamic and are largely staying the course. Still, patience is being tested.
“What we’re finding is most sponsors … recognize [stable value is] behaving as expected, so they’re not concerned,” said Prashar. But others are increasingly asking a more pointed question: “How much longer?”
Chong-Wulff emphasized the importance of reframing the conversation around time horizon. “Every time I think about a long run, I imagine … a long rope across this room, and this three-year period is just a small piece,” she said.
Even so, a small number of plan sponsors have opted to exit stable value altogether. In addition to performance, they often cite the perceived complexity of the product and a preference for the simplicity of money market funds. Prashar recommended that consultants reframe conversations by presenting participant‑level scenarios that show outcomes versus cash.
More commonly, some sponsors (but still a minority) are adding money market funds to their investment menus as a second principal preservation option, effectively hedging their bets without making an outright switch.
Against this backdrop, panelists stressed that positioning stable value solely as a competitor to cash may be missing the point.
“It’s not just beating cash or money market,” Dionne said. “It’s all of the features that stable value has that no other product … can bring.”
Those features include its core objective—principal preservation—along with its role in serving older plan participants who prioritize stability over volatility. In that sense, the panelists suggested, stable value should be framed less as a tactical allocation and more as a purpose-built solution within a retirement plan investment lineup.
Chong-Wulff offered a similar perspective, outlining what she sees as the key criteria sponsors weigh when evaluating principal preservation options: yield, liquidity, ease of understanding, administration and communication, cost, and, perhaps most importantly, predictability or no surprises.
“Boring is good,” she said. “No news is good news.”
The panelists acknowledged, though, that certain product features—particularly liquidity and portability—have taken on greater importance in recent years. As the rising-rate environment pushed the market value of stable value fund assets below their contract value, plans seeking to exit a stable value fund, perhaps due to a recordkeeper change or merger-and-acquisition activity, sometimes found the exit provisions cumbersome. The fact that those provisions were designed in part to protect the remaining investors in the fund didn’t always make them easier to accept.
Prashar noted that questions around exit provisions, portability, and contract terms, especially in general account-backed stable value products, have become more prominent, with some sponsors now associating stable value with constraints rather than flexibility.
Addressing that perception, panelists suggested, requires both better education and continued product evolution, particularly in designing solutions that can accommodate real-world plan events like mergers and acquisitions and recordkeeper transitions.
Looking back, panelists pointed to several lessons from the industry’s evolution over the past three decades.
Chong-Wulff highlighted the innovation that followed early disruptions in the guaranteed investment contract (GIC) market, which led to the creation of synthetic and separate-account GICs—developments widely viewed as positive. But she also pointed less favorably to the industry’s response to the Global Financial Crisis of 2008, which led to stronger, more resilient stable value structures but also introduced new complexities and, at times, overly conservative investment guidelines. By contrast, she noted, the more recent period of lower market-to-book ratios due to rising interest rates saw an industry response that was more supportive of a longer-term perspective.
More broadly, panelists acknowledged that the industry may have been slow to integrate stable value into target-date funds, a missed opportunity that continues to shape its role in DC plans today.
“I think the target-date ship is one that we missed,” Dionne said, though he added that the industry has appeared to learn from that lesson as it seeks to grow in the nascent retirement income and asset decumulation space.
If there was a unifying theme around innovation, it was that the future of stable value may lie less in reinventing the product itself and more in expanding how and where it is used.
Prashar pointed to the emergence of retirement income tiers within plan investment menus, where stable value can serve as a foundational option for plan participants nearing or in retirement. He emphasized that plan sponsors should explicitly consider stable value as a viable retirement‑income option when structuring decumulation strategies and participant communications. He also noted growing interest in applying stable value concepts, such as return smoothing and downside protection, beyond traditional DC plans.
“Wouldn’t it be great to have a wrap product where I had equity and all the other allocations I usually have?” concurred Chong-Wulff. Such a product could be especially enticing to older plan participants, which could help employers who want to keep participants in their plans even after they retire.
“If I had a product like that,” she remarked, “I would take my time getting out of my DC plan.”
Chong-Wulff described that sort of “asset-neutral principal preservation” product as one of three items on her “wish list” for the stable value industry. The others are mechanisms for improving the portability of stable value funds and the use of artificial intelligence to tailor retirement portfolios to include stable value for individual participants.
Dionne emphasized that much of the innovation opportunity lies in adapting existing stable value frameworks to evolving participant needs, particularly around the decumulation of savings in retirement.
“It has all of the features that a decumulation vehicle needs,” he said. “It’s just using the framework that’s there and expanding on it.”
As the session drew to a close, each panelist distilled their key message about stable value into a simple takeaway for plan sponsors.
“Think for the long-term benefit of the participant and don’t try to time the market,” Prashar said. He noted that plan sponsors should evaluate principal-preservation options on predictability, portability, and participant outcomes rather than market timing.
“Remember that it’s about principal preservation—and don’t necessarily confine that to your most conservative investment option,” said Chong-Wulff.
“Remember who’s using it,” Dionne added, “and that it is meeting its goal of principal preservation.”