The change that periodically occurs to the rate of the interest earned (also known as the crediting rate) on a stable value investment contract, as may be agreed to in the terms outlined in such contract.
The risk there will be a difference between the original coupon yield on an investment and the rates available when interest income is reinvested.
There are many types of risk in finance, but in general it is the probability of actual returns being less than expected returns. Investors should always carefully consider an investment’s objectives, risks, and fees before investing. Although stable value investment options generally seek to preserve investor capital, provide liquidity, and generate a steady, positive return, it is important to recognize that all investments, including a stable value investment option, have risks, some of which may be unique, including the potential risk of loss of some or all of an investment. There is no guarantee that any investment option, including a stable value investment option, will achieve its investment objective.
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.