Stable value funds have been around since the inception of defined contribution plans, and they haven’t changed much in recent years. They’re designed to provide steady returns regardless of the market environment and have accumulated $856 billion in assets under management as of mid-year 2024, according to data from the Stable Value Investment Association (SVIA), making up roughly 10% of all retirement assets.
While there used to be a competition between stable value funds and TDFs for qualified default investment alternative status, nowadays they’re seen more as partners, says Zach Gieske, president of SVIA. Participants may invest in TDFs when they’re younger, and then transition into stable value funds once they hit age 50. And stable value is often used within custom target-date structures to provide a better risk-return profile, he adds.
“Even in the decumulation phase, there is space for both to work well together,” Gieske says.
Mitra, Mallika. “Beyond TDFs: A look at some of the leading defined contribution solutions competing with target date funds.” PlanAdviser, January 1, 2025. https://www.planadviser.com/exclusives/beyond-tdfs/
