MetLife Stable Value Study
MetLife (which runs stable value funds but not money funds) published a press release entitled, "Post Money Market Fund Reform, Stable Value Viewed as More Attractive." It says, "One year after the U.S. Securities and Exchange Commission's (SEC) money market fund (MMF) reform rules went into effect, there has been meaningful movement away from money market funds as a capital preservation option in defined contribution (DC) plans, with just over half of plan sponsors now offering money market as a capital preservation option (52%), down from 62% in 2015, according to MetLife's 2017 Stable Value Study, released today. Additionally, there has been growth in stable value funds, with 9% of sponsors adding stable value funds to their plans in the past two years. A full report examining these findings is available at www.metlife.com/stablevaluestudy2017." The release explains, "Among plan sponsors who are reasonably familiar with MMF reform, a clear majority (83%) feel that stable value is a more attractive capital preservation option for plan participants than money market funds, as do nearly all DC plan advisors surveyed. Even among plan sponsors familiar with the rules whose plans offer only a money market option, a majority (55%) think stable value is a better option. Despite recognizing the attractiveness of stable value, the Study found that just three in ten plan sponsors overall (31%) evaluated their use of money market funds as their plan's capital preservation option in light of MMF reform. This indicates a continuing need for education about the rule changes and the role stable value funds can play as the capital preservation option within DC plans." It adds, "Indeed, advisors yield a great deal of influence in plan sponsors' selection of capital preservation options, with 73% of sponsors who offer stable value and 67% who offer money market saying their advisors recommended these options to them. However, there is a disconnect between the capital preservation recommendations advisors say they are providing and the actions plan sponsors are taking. According to the findings, 90% of advisors report recommending stable value very often, but 86% say they seldom or never recommend money market funds."
