Stable Value Fund

[EdgeOfGlory]

I have a SVF in my retirement portfolio through work. It pays different rates based on when the money was added. Older vintages are still receiving over 4%. New money is returning 3.5%. Over the last few years I moved most of my former bond funds into the SVF as the rate was guaranteed. Although there are restrictions on how quickly you can remove the funds after retirement, there is a one time option to remove it all, if desired, for a small percentage fee so seemed like a good option. Or you can withdraw over 10 years, or do an interest-only option for withdrawals.

 

[scrabbler1]

I had a SVF at my old company when I had a 401k with them. It paid rather well and my employer picked up the expenses of the fund. When I left the company in late 2008, I had to liquidate the 401k per plan rules when I took out its company stock (ESOP) using NUA. At the time, the SVF was paying between 4% and 5% which might have seemed low compared to 5 or 10 years earlier but looked good in 2008 when everything else (except for the ESOP) was in free-fall.


When I did my direct rollover into my IRA, I wanted to know what types of investments were in this tailor-made SVF. My employer had changed 401k plan administrators a few times but required as a condition of changing plan admins the creation of a SVF which was like the one which had existed before. It turned out it was invested in a lot of intermediate-term corporate bonds so that was what I chose when I did my rollover to maintain my AA.


I don't know how my old SVF has been doing since I left the company or if it has changed in the last 8 years. But I am sure glad it was around to provide me with some stability in my 401k, especially during the bad times in 2001-2002 and in 2008.