For our latest study, MetLife commissioned a survey of 238 defined contribution (DC) plan sponsors and 50 advisors to assess their attitudes about stable value as a capital preservation option, including:
- How plan sponsors access stable value options
- Stable value’s historical performance vis-à-vis other capital preservation options
- Steps taken to manage target date fund volatility
- Stable value as a mechanism for smoothing out volatility in TDFs, including custom TDFs
Stable value is a capital preservation option that offers earnings stability and liquidity, while delivering a guarantee of principal and interest.
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Why Stable Value is Valued
Plan sponsors view stable value as a good capital preservation option because of its long-term, historical performance
Plan sponsors are not planning to make any changes to their stable value offerings
Plan sponsors say stable value funds are valuable to plan participants seeking a safe haven
With few companies expecting to make any changes to their stable value offerings, it is clear from our research that plan sponsors – and their advisors – are staying the course with this capital preservation option.
Did you know?
Recent market volatility has highlighted a potential gap in the market that could be filled by a target date fund solution that allows for volatility smoothing for a portion of the fund assets, particularly for investors who are near or in retirement. One such strategy uses the long-standing principles of stable value to reduce the fund’s volatility by wrapping the fixed income and a portion of the equities within the glidepath.
Conclusion
Whether including stable value as a capital preservation option in a DC plan – or leveraging the principles of stable value in new and creative ways – the outlook for the future of stable value remains strong.
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MetLife’s Retirement & Income Solutions division, the company’s institutional retirement business, issues products through Metropolitan Life Insurance Company (MLIC) and Metropolitan Tower Life Insurance Company (MTL), two wholly owned subsidiaries of MetLife, Inc. Retirement & Income Solutions issues products for transferred pension liabilities, stable value, institutional income annuities, benefits funding and structured settlements.