Guarantees principal and investment income on a calendar year basis.
The Stable Value Fund invests in a group annuity contract issued by Transamerica Financial Life Insurance Company (TFLIC). The contract declares an interest rate that will be in effect for the following calendar year, and guarantees that rate. The portfolio that supports the TFLIC contract in turn invests in high quality, diversified, fixed-income securities. These include asset-backed securities, corporate notes, bonds and debentures, federal agency securities, money market instruments, mortgage-backed securities, private placements, and treasury notes, bonds and bills. The portfolio management strategy seeks to protect principal while also earning a stable rate of interest. Irrespective of whether the underlying portfolio meets it objective, however, the TFLIC guarantee assures that the declared interest rate will be given to MMBB members.
The Stable Value Fund is designed to produce, over time, higher returns than the money market investment option while providing less volatility than comparable duration bond funds. In addition, invested principal and interest are guaranteed on a calendar year basis.
Because the guaranteed interest rate does not fluctuate during the course of a calendar year, members can rely on receiving the rate declared for January 1 through December 31 of each year, less applicable expenses.
As with all of MMBB’s investment options, certain expenses are applied to members’ accounts. Each year MMBB estimates what those expenses are likely to be for the following year and then announces an estimated net return. For the calendar year 2020 MMBB estimates that the net rate of return that members will receive is approximately 1.23%.
Toward the end of the year the estimated rate of return for the next calendar year will be announced.
Guarantees are based on the claims-paying ability of Transamerica Financial Life Insurance Company (TFLIC). TFLIC is rated highly by four Nationally Recognized Statistical Rating Organizations: A (Excellent) by A.M. Best, A1 (Good) by Moody’s, AA- (Very Strong) by Standard & Poors and AA (Very Strong) by Fitch. Although Transamerica is believed to be a strong financial institution, should they default on their guarantee, the underlying bond portfolio would become subject to the fluctuations of the bond market.
There is a restriction on moving money from the Stable Value Fund to the Money Market Fund. A member may move money into the Stable Value Fund at any time. A member may also reallocate money from the Stable Value Fund into any of MMBB’s other investment options at any time, with the exception of the Money Market Fund. Before reallocating funds from the Stable Value Fund to the Money Market Fund, a member must first transfer the funds into one of MMBB’s other (non-Money Market) options. After three months the funds can then be reallocated into the Money Market Fund.
Under certain circumstances members withdrawing assets from this option may incur a 5% penalty. These circumstances are:
If you think that you may fall into one of these categories but do not want to incur the 5% penalty you must transfer your assets that are in the Stable Value Fund into another MMBB investment option (except for the Money Market option) for at least 90 days before taking them out of the MMBB Retirement Plan.
As with all of MMBB’s investment options, various administrative expenses are applied. This means that a member’s actual investment experience will be lower than the declared interest rate.
*If you are uncomfortable with the risks associated with the U.S. Blended Equity Fund, you may want to consider another MMBB investment option.*
The information contained herein is for general purpose only. The use of our information should be based on your due diligence and MMBB will not be liable for any success of failure that is directly or indirectly related to the use of the information contained herein. MMBB assumes no responsibility for errors or omissions in the content herein. The information contained herein does not constitute a complete description of our investment services and it does not constitute any tax, legal, financial, or investment advice. In no event shall, MMBB be liable for any special, direct, indirect, consequential, or incidental damages, or any damages whatsoever, whether in action of contract, negligence or tort, arising out of or in connection with the use of the information contained herein.
|1 Day||YTD||1 Year||3 Years||5 Years||10 Years|
MMBB began offering the Stable Value Fund on August 18, 2010. The performance displayed for longer time periods reflects the performance of the investment pool into which the MMBB assets are invested. The longer term performance reflects what members would have received had this option been available in earlier years.While it is valuable to view investment performance over long-term time horizons, looking at shorter time periods can give one insight as to how returns may fluctuate over shorter time periods. The table below displays calendar year returns over ten years.
|Investment Management Fees||0.48%|
|MMBB Administrative Charge||0.20%|
|Total Estimated Annual Expenses||0.81%|
*With all MMBB fund offerings, there are no sales charges on purchases, deferred sales charges, short-term or other redemption fees, distribution or 12b-1 fees, dealer commissions or low-balance account service fees.
Beginning in 2020, the MMBB administrative charge for the Stable Value Fund has been reduced from .50% to .20%