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July 23, 2009 at 08:00 PM
The U.S. Department of Labor should let retirement plans use stable value products as qualified default investment alternatives, an insurer executive says.
James King Jr., a vice president in the stable value markets group at a unit of Prudential Financial Inc., Newark, N.J., spoke up for stable value funds today at a hearing organized by the ERISA Advisory Council, an arm of the Labor Department.
A stable value fund is a fund that seeks to offer a relatively high fixed rate of return by investing in guaranteed investment contracts, bonds wrapped in insurance wrappers, and other products that have generally had a low risk of default.
A QDIA is a fund that a 401(k) plan administrator can use to hold the plan assets of participants who fail to tell plan administrators how they want the assets allocated.
