Yes, stable value funds, contract providers, investment managers, and other service providers involved in stable value have multiple layers of regulatory oversight provided by a variety of federal and state governmental regulatory bodies as well as by nongovernmental bodies.
For instance, most stable value funds offered by non-governmental (i.e., corporate) plan sponsors are regulated by the Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA). These stable value funds must comply with the federal pension law, the Employee Retirement Income Security Act (ERISA). Stable value in defined contribution plans offered by state and local governments (e.g., 457 plans) is regulated by that state’s law, which, in many cases, has requirements similar to ERISA.
In addition to the Department of Labor, stable value funds that are formatted as a pooled fund or commingled investment trusts (CITs) are regulated by the Office of the Comptroller of Currency and/or the Federal Reserve, or by the respective state for state-chartered banks. Similarly, for insurance companies, guaranteed insurance accounts or insurance company issued investment contracts, such as GICs, separate account GICs, or wrap contracts, are regulated by each insurance company’s home state’s State Insurance Commissioner and governed by state law.
Additionally, all stable value funds offered by a defined contribution plan must comply with accounting regulations as promulgated either by the Financial Accounting Standards Board (FASB) if the plan is a non-governmental plan, or by the Governmental Accounting Standards Board (GASB) if the plan is a state or local governmental plan. FASB and GASB are both private, not-for-profit, independent organizations whose primary purpose is to develop generally accepted accounting principles (GAAP) under their respective regulatory purview within the United States. The Securities and Exchange Commission, 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 the organization responsible for setting such standards for public companies. Both FASB and GASB are subject to oversight by the Financial Accounting Foundation (FAF).
