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A 20 Year Perspective on Stable Value

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The 2018 SVIA Fall Forum marked 20 years and one month since Gina Mitchell was hired to serve as the president of the Stable Value Investment Association.

To say the two decades since her appointment proved eventful would be an understatement.

During that period, the stable value industry had to work through multiple market upheavals, including the dot-com stock market crash of the early 2000s, the oil spike in 2008, and the credit crisis that same year, which cratered stock prices and provoked the worst recession since the Great Depression. The industry also endured an ever-shifting regulatory environment that included potential challenges to stable value’s book-value accounting treatment, the quashing of the fledgling market for stable value mutual funds, and the development of Qualified Default Investment Alternatives for defined contribution plans. That development contributed to the siphoning of assets away from stable value funds—and many other DC plan investment options—into target-date funds. Finally, for nearly the entire 20-year period, interest rates were in a long secular downward trend that steadily pared the crediting rates stable value providers could offer on their products.

Through it all, Mitchell and her colleagues on the SVIA board, and throughout the association’s membership ranks, steered a steady course. The net result? Stable value remains a core portfolio holding for millions of American retirement plan participants. By the second quarter of 2018, assets invested in stable value products had climbed to $758 billion, according to SVIA research, up from $222 billion in 1999, (Mitchell’s first year at the association).

Reviewing those figures at the opening of the 2018 Fall Forum, SVIA Chairman Stephen Kolocotronis, associate general counsel for AIG Institutional Markets, noted that stable value assets today account for about 10 percent of all defined contribution plan assets, up from 8 percent in 1999.

“We have been very successful at many things,” Kolocotronis said as he helped Mitchell open the conference. Then, turning to Mitchell, he continued, “And if you want to boil it down to one reason, she is standing right there.”