What is stable value?
Stable value is an investment vehicle offered by defined contribution plans and used by participants.
Stable value provides the following unique combination of benefits:
- Principal preservation
- Stability and steady growth in principal and earned interest
- Returns similar to intermediate bond funds with the liquidity and certainty of money market funds
- Benefit-responsive liquidity, which means participants transact at contract value (principal plus accrued interest)
Stable Value is used in defined contribution plans
Stable value funds are a core investment in defined contribution employee benefit plans:
- $821 billion invested in stable value assets
- 165,000 defined contribution employee benefit plans
- Offered in approximately half of all 401(k) plans1
- 401(k) allocations to stable value funds have ranged between 17% to 37% over the life of the Aon 401(k) Index™
Stable value provides capital preservation and consistent, steady returns:
Stable value offers higher return potential than money market funds:
1 Source: "401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2012," by Jack Vanderhei, EBRI, Sarah Holden, ICI; Luis Alonso, EBRI; and Steve Bass, ICI, EBRI Issue Brief, December 2013, No. 394.