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Stable-Value (SV) Rates, 4/1/23

edited March 2023 in Other Investing
TIAA Traditional (Accumulation) Rates
No changes.
Restricted RC 6.25%, RA 6.00%
Flexible RCP 5.50%, SRA 5.25%, Newer IRAs 3.45%

TSP G Fund hasn't updated yet (previous monthly rate was 4.125%).

Options outside of workplace retirement plans include m-mkt funds, bank m-mkt accounts (FDIC insured), T-Bills, short-term brokered CDs.
#401k #403b #StableValue #TIAA #TSP


  • @yogibearbull, I'm sorry for my ignorance, but can you explain what this is?
  • edited March 2023
    Stable-value (SV) funds are available in several workplace 401k/403b plans. Among the 2 largest are TIAA Traditional and Federal TSP G Fund. There are also various flavors of TIAA Traditional. These rates are revised monthly and I have been tracking them at MFO since mid-2022. There was a minor format change last month from a long-running continuous thread to separate monthly threads.
  • I thought I knew what stable value funds in a 401k were. I used them for years, but what you show looks to me more like an annuity. See below statement. It's confusing to me that you can buy these TIAA products at these types of rates as a savings vehicle. Rates are better than treasury rates and CDs. I'm sure I'm missing something.
    Rates shown above are based on a 67-year old choosing a single life annuity with a 10-year guarantee period or a joint life annuity with a 20 year guarantee period.
  • TIAA Traditional is indeed an annuity product.

    But what you quoted applies only to the annuitized payouts, not for accumulations.

    For TIAA Traditional accumulations (savings), the restricted RC and RA allow withdrawals only over several years. But flexible RCP, SRA and newer IRAs have only frequent-trading restrictions.
  • Who would have thought that funds could make a business on the value of stables? What next... maybe "horse value" funds?
  • Stable value fund is available in my 401(K) plan. It is an insurance product that invest in short term treasurys but has the liquidity like money market fund. I found stable value fund to be quite useful especially in stress time.

    I seldom use it until late 2021 when I swapped the entire bond index fund and most of stock index fund to it as signs of inflation was increasing. The move worked it okay (small gain) by year end in 2022 and that is good enough for us. Who would thought both stocks and bonds went down simultaneously in 2022.
  • I thought I knew what stable value funds in a 401k were. I used them for years, but what you show looks to me more like an annuity.

    Stable value fund is available in my 401(K) plan. It is an insurance product that invest in short term treasurys but has the liquidity like money market fund.

    There's a lot of subtlety in attributes of these products that results in a fair amount of confusion. In a broad sense everything people have mentioned here is a stable value fund. In practical terms, the distinctions don't matter much.
    stable value funds and their close cousins, guaranteed investment contracts, together accounted for 21.3 percent of the assets in such plans in September [2006]
    The stable value funds in 401(k) plans are generally a pool of short-term bonds or other debt-market investments protected by an insurance contract known as a wrapper.... The underlying investments are generally corporate bonds, which yield more than government bonds but are also at a greater risk for loss of principal. He said Treasury bonds were a more secure long-term choice than stable value funds, which may be subject “to the law of unintended consequences."
    Like other stable value funds in 401(k) plans, [the Trust Advisors Stable Value Plus fund] was not a mutual fund but a collective trust.

    "Stable value" can refer to even more varied investment structures. Historically, or "traditionally", these were insurance products - guaranteed insurance contracts like TIAA Traditional issued directly by an insurance company.
    TIAA Traditional is a guaranteed insurance contract and not an investment for federal securities law purposes.

    "Stable value" evolved into a much broader range of investment structures. The common thread is the use of insurance to provide investment value stability.
    Stable value investment options may be offered by investment managers, trust companies, or insurance companies in various structures, such as separately managed accounts, commingled funds or guaranteed insurance accounts. Sometimes a stable value investment option will be managed by a plan sponsor. While stable value investment options may be managed or structured in a variety of ways, the important similarity is the use of stable value investment contracts, issued by banks, insurance companies, and other financial institutions, which convey to the investment option the ability to carry certain assets at book value. (Links in original)

    For a brief shining(?) moment, stable value funds were offered in retail IRAs. But SEC concerns about pricing led to their demise:
    [Stable value as an] investing option has disappeared for individuals [in 2005] because of questions raised by the Securities and Exchange Commission about how to value the funds, although no formal ruling against them has been made.
    Stable value funds have been available for many years, and remain available today-although on a much more limited basis-in some 401(k) plans and defined benefit pension plans maintained by employers. These investments come under the jurisdiction of the U.S. Department of Labor, which has strict, but somewhat different regulations, from the SEC. The SEC's questions affect investments by individuals in IRAs ...

    Scudder launched the first stable value IRA fund in 1997, offering the funds as Scudder Preservation Plus Income and Scudder Preservation Plus. Others were offered by PBGH, Gartmore Morley, Oppenheimer and other mutual fund managers.

    But the SEC began raising questions about how to determine the daily valuation of funds with insurance wrappers, which managers had been pricing at book value. The wrapper agreement, which is what made the stable value fund what it was, was also the part that was raising questions at the SEC. The SEC, which initially approved the funds, will not comment on the situation other than to say that there are no stable value funds now registered with the SEC, although there are some nonregistered ones in existence, says John Nester, an SEC spokesman.
  • I left an old 401(k) with the original provider who morphed into VOYA. I almost rolled over the money but in 20008 the advisor told me "You know the SV fund in your account has a lifetime guarantee of 4%

    So I left it and it looked great until recently. Unfortunately he didn't tell me that they also offered PRCWX and it is still open to these account holders.

    Now I have a real dilemma. If I sell the SV I loose that guarantee. New money in the SV gets what ever the prevailing rate is and it floats
  • The existing money probably also gets a floating rate. It's just that the floor is 4%.

    Earlier this year I liquidated a cash acccount (taxable) I had with an insurance company that was providing me a variable rate guaranteed not to be lower than 3%. Problem was, it still hasn't gone up from that floor. Worked great during ZIRP though.
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