ERISA
See the Employee Retirement Income Security Act of 1974, as amended.
Guaranteed Insurance Account (GIA)
See life insurance directly sold.
Market Value
With respect to an investment (e.g., a bond, stock, or fund share), market value is the cash value that selling such investment at a given price in the open market generates. As prices for investments tend to fluctuate daily, the actual or implied market value of an investment will likewise tend to fluctuate daily. With […]
Ordinary Withdrawals
See book value withdrawals.
Risk Charge
The cost embedded in every stable value investment contract to cover the risks assumed by the issuer. Typically the charge is based on the risks associated with the specific plan and/or assets involved.
Surrender Charge
Any payment required for terminating an investment contract, typically a guaranteed investment contract, prior to its scheduled maturity date.
Arbitrage
In general usage, a relatively low-risk purchase and simultaneous sale of an asset in order to profit from a difference in the price. With respect to stable value investment options, exploiting short-term differences between a plan investment option with similar objectives or characteristics (the competing option) as the stable value investment option whereby assets flow to the competing option […]
Cash Buffer
See liquidity buffer.
Crediting Rate
The interest rate applied to the book value of a stable value investment contract, typically expressed as an effective annual yield. As provided in the investment contract, the crediting rate may remain fixed for the term of the contract or may be “reset” at predetermined intervals. The crediting rate may be expressed as a gross or net crediting rate. For separate account GICs or synthetic GICs, […]
