Financial Accounting Standards Board (FASB)
The FASB is a private, not-for-profit, independent organization whose primary purpose is to develop generally accepted accounting principles (GAAP) for publicly held companies within the United States. The SEC, which has legal authority to establish financial accounting and reporting standards for publicly held companies under the Securities Exchange Act of 1934, designated the FASB as […]
Investment Contract
Any of a variety of stable value contracts including bank investment contracts, traditional GICs, separate account GICs, and synthetic GICs. Within a stable value investment option, such contracts are benefit-responsive, meaning they permit, subject to their terms and the plan’s rules, participant initiated transactions at book value. Investment contracts may have a fixed or floating interest rate, which may not be less than 0%. […]
NAIC
See National Association of Insurance Commissioners.
Pooled GIC Fund
A stable value investment option, typically offered by an insurance company, consisting of a group annuity contract that covers many, usually smaller plans. (See also guaranteed insurance account.)
Spread
A spread is the difference between the actual earnings on some investment contracts offered by insurance companies, such as traditional GICs or general account stable value investment options, and the crediting rate that is declared and guaranteed by the insurance company for a given period. While there is no certainty an insurance company will earn a targeted spread, the anticipated spread is used to […]
Underlying Investments
See associated assets.
BIC
See bank investment contract.
Constant Duration
A stable value investment strategy that employs a portfolio of actively managed assets that are constantly rebalanced to maintain a targeted duration. In a constant duration (also known as an “evergreen”) structure, the stable value investment contract does not have a defined maturity date. (Compare to buy and hold and maturing.)
Downgrade
See credit quality downgrade.
