Common Questions About Our Stable Value Funds

Our stable value funds are designed to provide retirement plan participants with a guaranteed return of principal and interest, along with attractive crediting rates and 100% liquidity.

The funds are group annuities, backed by the financial strength of Standard Insurance Company. The investor receives a direct guarantee of principal and accrued interest from Standard Insurance Company. Participants’ accounts are recordkept at book value (principal and interest). All participants receive book value regardless of market conditions.

Stable value funds from The Standard offer a full guarantee of principal and accumulated interest to participants.

For our Portfolio Stable Value funds, interest is credited on a portfolio rate method and all monies receive the same crediting rate. Interest crediting rates are stated on an annual effective basis, declared shortly (usually one week) before each quarter and are locked in and guaranteed not to change for the quarter.

For our APEX Series Stable Value funds, rates are stated on an annual effective basis and declared semi-annually in advance of the semi-annual period beginning on Jan. 1 and July 1.  The APEX Series Stable Value funds are “new money” funds that use three different crediting rates. They are contained within “vintages,” which are updated semi-annually. For more details about vintages, please see Standard APEX Stable Value Funds.

The Standard’s stable value offerings are suitable for a wide variety of plan types, including 401(k), 403(b), 401(a), 457, 457(b), 457(f), 409A, cash balance, defined benefit and HSA/HRA plans with no minimum investment requirement. Some funds are not available to all plan types. The following links provide additional information:

Portfolio Series Product Comparison Guide

APEX Series Product Comparison Guide

• Guaranteed Crediting Rate — The guaranteed interest rate is guaranteed for the set period and declared in advance (quarterly for Portfolio funds, semi-annually for APEX funds).
• Minimum Guaranteed Rate — The interest rate is contractually guaranteed never to be less than 1%.
• Liquidity — Daily liquidity for participant withdrawals and transfers at book value (principal and interest), regardless of market conditions.
• Conservative Investments — A diversified, high-quality portfolio of fixed income securities plus commercial mortgages within Standard Insurance Company’s general account.
• Direct Guarantee —Plan participants invested in one of The Standard’s Stable Value funds are provided with a full guarantee of principal and interest.
• Insurance Regulatory Oversight — State insurance regulators oversee insurer reserves and investments through regulation and regular audits.
• Strong Capital — The Standard benefits from a strong capital and reserve position with a risk-based capital in excess of 400% of company action levels as of Dec. 31, 2023.
• Plan Level Discontinuance — Discontinuance options vary by fund to provide plan sponsors with options suited to their tolerance.
  
  Portfolio Series Product Comparison Guide
  APEX Series Product Comparison Guide

• Portability — Easily portable to outside recordkeeping platforms. Portable in the event of a recordkeeper change.²

1 Subject to conditions in certain contracts.

2 Subject to recordkeeper acceptance.

Stable Value funds from The Standard are not “wrap” products. As an insurance company, Standard Insurance Company is not dependent on the capacity and/or lack of willingness from third-party wrap providers. We manage our own assets and issue a guarantee of principal and interest directly to the plan sponsor. Our Stable Value funds are group annuity contracts issued by Standard Insurance Company and are record kept at book value (principal and interest). All participants receive book value regardless of market conditions.

The plan participant receives a direct guarantee of principal and accrued interest from Standard Insurance Company. That guarantee is backed by the full faith and creditworthiness of Standard Insurance Company. Deposits made to Stable Value funds from The Standard are deposited into Standard Insurance Company’s general account. Guarantees are based on the claims-paying ability of Standard Insurance Company and not on the value of the securities within the general account.

Standard Insurance Company has consistently received strong, favorable financial strength ratings from rating agencies through the years.¹

As of September 2024, Standard Insurance Company had earned these financial strength ratings.

1 Based on ratings S&P, Moody’s, & A.M. Best

As a state-regulated insurance company, Standard Insurance Company maintains adequate reserves to meet its contractual guarantees. State insurance regulators oversee insurer reserves and investments through regulation and regular audits.

We benefit from a strong capital and reserve position with a risk-based capital in excess of 400% of company action levels as of Dec. 31, 2023.

The underlying general account portfolio is a broadly diversified, investment-grade, fixed-income portfolio. It is primarily invested in publicly traded bonds and commercial mortgages. As of Sept. 30, 2024, the general account portfolio had an average rating of “A” as measured by Standard & Poor’s.

For additional information, please see our Summary Description.

The underlying high-quality¹ investments within our conservative approach and tight risk controls have enabled our general account portfolio to weather many marketplace storms since our founding in 1906. Outlined below are the key elements we maintain in controlling risk.

• Bond Portfolio

  The bond portfolio focuses on investment-grade US dollar denominated bonds, primarily in developed markets. The portfolio is diversified by geography, sectors and issuers with specific limitations placed on issuer exposure based on ratings.

• Commercial Mortgage Loan Portfolio

  The commercial mortgage loans issued by StanCorp Mortgage Investors, Inc. (SMI) have consistently provided a balance of risk and return. SMI offers small commercial mortgage loans to borrowers who want a fixed rate over time, and we rigorously underwrite every commercial mortgage loan we make.

  SMI’s mortgage portfolio is a niche of small, fixed rate commercial loans. Because of this, we are not as susceptible to large swings in the commercial real estate market compared with the mid-large balance space.

  Diversification has always been a driver for us. In addition to originating loans across a higher number of properties, we also diversify geographically across the United States and across property type (retail, office, industrial).

1 Based on ratings from S&P, Moody's and A.M. Best

Standard Insurance Company sets crediting rates using a process that is similar to that of other providers of similar products. The company strives to provide the highest return on a risk-adjusted basis for its plan participants.

Among the many factors the Standard Insurance Company’s management team considers when setting rates are projected investment earnings on investments held in the general account, projected cash flow, the interest rate at which new investments can be made, investment and interest-rate risk, investment management expenses, liquidity needs and the competitive environment.

Once the crediting rate is announced, that rate is guaranteed not to change during the set period (quarterly for Portfolio funds, semi-annual for APEX funds). Crediting rates for the subsequent periods can be higher or lower. 

For our Portfolio Stable Value funds, the guaranteed crediting rate resets are announced shortly before each quarter and guaranteed for the new quarterly period. The guaranteed rate applies to all assets in the fund.

For our APEX Series Stable Value funds, rates are stated on an annual effective basis and declared semi-annually in advance of the semi-annual period beginning on January 1st and July 1st. The initial APEX Rate will be guaranteed for all new deposits within the six-month period that the rate is active.

For our Portfolio Stable Value funds, The Standard declares a guaranteed annualized net effective crediting rate in advance of each quarter. That means the interest rate will not change over the course of the quarter. That annualized net effective crediting rate is then converted into a daily equivalent (“daily factor”) and applied daily to all balances in the fund for every day until the quarter ends and a new rate becomes applicable. Future quarter’s crediting rates may increase or decrease.

Yes, the guaranteed minimum interest rate offered by stable value funds from The Standard is 1%.[1] This is guaranteed for the life of the contract.

The Standard strives to offer competitive crediting rates over all phases of the economic cycle. We invest in high-quality, fixed-income investments and mortgage loans that provide returns on a risk-adjusted basis. On the fixed income side, we invest mainly in high-quality publicly traded securities (average rating of A). The mortgage portfolio is a niche of small, fixed-rate commercial loans which have been rigorously underwritten.

Our delinquency rates have consistently been very low (0.160% as of March 31, 2024). As a result, our portfolio yield remains attractive. We anticipate being able to offer a compelling yield no matter the interest-rate environment.

No. Participant withdrawals and transfers are freely permitted daily according to plan provisions. Stable value funds from The Standard provide participants with full book value liquidity for benefit payments (death, disability or retirement) and transfers to other investment options.  Withdrawals due to employer actions may be subject to a market value adjustment.

The funds are portable and can be kept as an investment option in the event there is a recordkeeper change.¹ The funds trade through the industry standard NSCC trading system and can easily interface with outside recordkeepers.

1 Subject to recordkeeper acceptance.

• Fully guaranteed rate — The interest crediting rate is guaranteed for the set period and declared in advance (quarterly for Portfolio funds, semi-annually for APEX funds)
• Minimum guaranteed interest-rate floor — The interest rate is contractually guaranteed never to be less than 1%.¹ This is guaranteed for the life of the contract.
• Principal guarantee — Participant principal and interest are fully guaranteed by Standard Insurance Company.
• Direct guarantee — Standard Insurance Company is able to provide stable value investors a fully transparent guarantee.
• Market value adjustment equalizer —The Standard offers multiple Stable Value options to suit the needs of various customers, including the ability to buy out market value adjustments.

1 Subject to conditions in certain contracts.

Insurance company options of guaranteed fixed-rate stable value funds generally have the objective of preserving a participant’s invested capital (or principal) while providing liquidity and steady, positive returns that typically exceed those available in money market investments over time. Most stable value investment options have historically provided gross returns similar to short- to intermediate-maturity bond strategies but without the daily volatility.

Outlined below are some of the key characteristics of each product and the advantages stable value products offer over money market funds.

Money Market funds

A money market fund is a mutual fund and is generally considered a low-risk investment option that invests in U.S. Treasuries, agencies, CDs, commercial paper and other instruments with maturities of less than 13 months. In addition, money market funds seek a stable $1 net asset value and often generate a low, single-digit return for investors.

• Many retirement plans can include government and institutional money market funds.
• Government money market funds continue to seek a stable $1 net asset value and often generate a low, single-digit return for investors.
• Institutional money market funds have a floating net asset value. They can impose liquidity fees and temporarily suspend withdrawals (known as gates) in certain circumstances.

Insurance company guaranteed-rate stable value funds have the advantage when it comes to:

• Historically higher yields from intermediate-term bond funds without the volatility.
• Being considered a low-risk option; however, one key difference at the participant level is the existence of some form of principal guarantee – a safety net in the form of an insurance guarantee.

Stable value funds from The Standard offer a proven conservative investment approach along with a full guarantee of principal and interest offered through Standard Insurance Company. The funds are an attractive stable value solution for participants seeking safety, liquidity and yield.  The funds are available to qualified and non-qualified plans including: 401(k), 403(b), 401(a), 457, 457(b), 457(f), 409A, HSA/HRA plans and force-out IRAs with no minimum investment amount.

The Standard offers multiple Stable Value options to suit the needs of various customers, including the ability to buy out market value adjustments, and an attractive revenue-sharing component that plan sponsors find beneficial in offsetting administrative costs. The Standard has strong, favorable financial strength ratings and has been making good on its promises and guarantees for more than 100 years.