Fiduciary
As defined by ERISA, any person or firm who: (a) exercises any discretionary authority or discretionary control over the management of a plan or any authority or control over the management or disposition of its assets, (b) renders investment advice for a fee with respect to the funds or property of the plan, or has the […]
Interest Rate Risk
The risk that changes in interest rates will affect the return on an investment, either positively or negatively. This effect may be due to realized or unrealized gains or losses on the investment’s market value, to changes in the reinvestment rate on interest income, or to interest rates triggering prepayment or extension of principal.
Mutual Fund Window
Similar to a self-directed brokerage window, except the investments available to supplement a plan’s core investments are limited to mutual funds. (See also competing option.)
Pooled Fund
A fund, typically offered by a bank or trust company that combines the assets of unaffiliated plans into one large group. With respect to a stable value investment option that is a pooled fund, the fund would purchase stable value investment contracts and other investments on behalf of the invested, unaffiliated plans. These funds may also be referred to as […]
Sponsor
See plan sponsor.
Trustee
The person(s), bank or trust company that has responsibility over some or all financial aspects (receipts, disbursements, and investments) of a defined contribution plan or defined benefit plan. Most institutional trustees serve as “directed trustees” that are subject to direction by a plan’s named fiduciaries.
Benefit-Responsive
The ability to transact at book or contract value for benefit payments.
Comptroller of the Currency, Office of the (OCC)
A federal agency that charters and regulates national banks, including a bank’s collective trusts. State-chartered banks are not subject to OCC jurisdiction, but many state banking regulations are similar to the OCC’s. Click here for offical website.
Diversification
The use of a variety of investments in an effort to reduce risk exposures.
