Comments on: Unstable Value Funds?

By: Anne

Anne — Tue, 28 Oct 2008 01:56:56 +0000

David — Any updates on this as of October 2008?

By: stlcpa

stlcpa — Sat, 19 Jan 2008 00:38:06 +0000

This will be a significant problem in the coming months/years. Many DC plans have offered these investment options for participants as a ‘guaranteed’ safe returns. If something blows up there are PR issues, not to mention some potential ERISA problems if a smart legal type was prone to stirring the pot.

As a CPA/auditor I have been shocked by the response of most entities offering this product (to our benefit plan clients) when we ask about contract value vs. fair value (to meet our GAAP presentation requirements). It has been a mixture of stonewalling, pleading ignorance and finally refusal.

So, anywhoo, that was a long winded way for me to say “Nice post David”

By: waryone

waryone — Fri, 18 Jan 2008 21:06:05 +0000

This is exactly the situation in my 401K. The Stable Value fund will provide no information about the underlying assets or insurance. None. They just say everything is fine. Fine my ass. It is fine as long as there are continued inflows, which will only occur if they keep the state of the fund secret.

Someone explain to me how this is different from a Ponzi scheme, because I’m not seeing the difference.