SOURCE: Rogerscasey


December 07, 2010 00:01 ET

Rogerscasey Warns on Risks Relating to Stable Value Investments While Applauding DOL's Efforts on QDIA and Target Date Fund Investment Options

DARIEN, CT--(Marketwire - December 7, 2010) - Rogerscasey believes there should be greater disclosure on the risks relating to stable value investments. While 2008 was clearly a difficult year for all asset classes, from money markets, to all forms of equity, Rogerscasey notes that it was a particularly difficult year for stable value funds. The firm's concern is not over stable value funds themselves. Rogerscasey recognizes that these funds are very popular investments that employees cannot get outside of their 401(k) programs. The concern is with the participants' perception that these investments are risk-free. As such, proper disclosure is critical. 

Roger Williams, Managing Director and Head of Defined Contribution Consulting at Rogerscasey, remarks, "We are not stating that each fund must disclose its market to book value ratio, but that each fund should identify the general risks involved in a stable value fund." Williams says that what is needed is "a statement explaining how such a fund is managed and identifying the risks associated with the fund, such as the underlying bond fund, the wrap providers, and the insurance company guaranteed products." Williams goes on to say, "It is important to state that neither the sponsoring company nor the government is 'guaranteeing' the performance of the fund. We believe this type of disclosure, or education, in plain English, would be beneficial for all involved."

Additionally Rogerscasey applauds the Department of Labor's efforts to standardize and disclose certain information on the Qualified Default Investment Alternative and Target Date Fund investment options. Williams states, "These funds are designed for investors that either lack the time, interest, or knowledge to make their own retirement investment decisions." He notes that "information on fees, asset allocation, asset class exposure, risk adjustments over time, and risk at any point in time is a requirement for a sound investment decision. Plan participants need to understand and be comfortable with their investments."

About Rogerscasey

Rogerscasey is a global investment solutions firm serving institutional asset owners and financial services firms for over 40 years. With clients worldwide, the firm provides a full array of services ranging from investment advisory to implemented solutions, all supported by a deep commitment to a strategic manager research process. The Rogerscasey team of leading industry experts helps clients stay ahead of economic trends, delivering insight toward achieving maximum results. Learn more at

Contact Information

  • Media Contact:
    Peter Kojalo
    BluePoint Venture Marketing
    (617) 304-4081
    Email Contact