FASB Statement of Position (FSP) AAG INV-1
FSP AAG INV-1 defines the rules under which book value accounting may be used for the investment contracts issued to commingled funds for defined contribution plans offered by public companies.
Interest
The payment or cost for using money, usually expressed as a percentage rate per period of time. With respect to stable value investment contracts, interest refers to the amount paid or credited by the issuer to the contract-holder expressed as an effective annual yield. (See also crediting rate.)
Money Market Fund
A mutual fund that seeks to maintain a constant net asset value (NAV) of $1 per share while earning a market interest rate for shareholders. Such funds are regulated by the SEC and are comprised of short-term (typically less than one year) securities representing high-quality, liquid debt and monetary instruments. The term may also be used to refer to […]
Plan-Initiated Withdrawal
A withdrawal requested by a plan sponsor, trustee, or contract-holder, or agent thereof, of some or all of a plan’s investment in a stable value investment option or investment contract. Plans that wish to terminate their participation in stable value commingled funds or some insurance company guaranteed insurance accounts and receive contract value may be subject to a deferral period. Any deferral period is outlined in the investment […]
Separately Managed Account (SMA)
See individually managed account.
Transfer Restriction
A plan rule or contractual provision limiting the frequency, amount, or direction of participant transfers between plan investment options. (See also equity wash.)
Benchmark
See index.
Commingled Investment Trust (CIT)
See pooled fund.
Defined Contribution Plan
A tax-qualified retirement plan under which the amount of the participant’s benefit will vary depending upon the amount of employer (or plan sponsor) and/or employee contributions made to the participant’s account and the investment earnings or losses thereon. Most defined contribution plans that include employee contributions (e.g., 401(k) plans) permit participants to direct the investment of their accounts.
