Stable value funds provide great returns, much better than money market accounts. There is a price to be paid for that. Stable value funds are guaranteed investment contracts and any termination may lead to a market value adjustment (MVA).
An MVA is a monetary adjustment, or fee, stated within a stable value fund contract. This fee is paid as the result of the plan sponsor’s withdrawal before the provisions outlined in the contract are met.
Plan participants in the Bed Bath and Beyond’s 401(k) plan learned that, the hard way. The plan’s termination with Empower, set off a MVA, adding more insult to injury to people who lost their jobs. Before you terminate the plan or switch providers, check the stable value adjustment for any MVA.