Investment Product Launches for the Week
CUNA Mutual Retirement Solutions Adds to Stable Value Account Capabilities
CUNA Mutual Retirement Solutions has added to its Guaranteed Account offerings by making rate classes available specifically for 457(b) and Employee Retirement Income Security Act (ERISA) 403(b) plans. Having served the 401(k) and defined benefit plan types for more than 30 years, this is the first time the company has offered the non-profit sector a stable value option, according to the firm.
“We are pleased to bring a stable value solution to plan types that haven’t had many choices,” says Paul Chong, senior vice president of CUNA Mutual Retirement Solutions. “The Guaranteed Account is a stand-alone, investment-only offering and is an exciting step in the evolution of our company beyond the 401(k) and defined benefit space.”
Unlike many types of stable value accounts, CUNA says this fund is “fully guaranteed and not subject to any type of price fluctuation.” The fund is underwritten by CMFG Life Insurance Company, part of CUNA Mutual Group, and features competitive interest rates ranging from 1.5% to 2%, depending on adviser compensation.
Other highlights of the Guaranteed Account for 457(b) and 403(b) plans include complete guarantees of principal and interest (not found in all stable value accounts); rates declared in advance semiannually with a 1% minimum rate guarantee; full liquidity (participants can transfer into and out of this account without restrictions or penalties); and an option to convert to guaranteed lifetime income at retirement.
“We believe it will be a good fit for retirement plans that have an underperforming money market or other form of stable value account in their plan,” Chong says. “Additionally, it’s a great way to add an element of guaranteed income to plans that do not have such features.”
Those interested in offering this account as an adviser, broker/dealer or plan sponsor should email RPSProductSupport@cunamutual.com or visit www.theguaranteedaccount.com for more information.
NEXT: Catholic values TDF
Catholic values TDFs and Risk-Based Funds from IFA
Index Fund Advisors (IFA) has launched a series of target-date funds (TDFs) and risk-based funds aimed at meeting the needs of Catholic investors who want to maintain investment portfolios in line with their religious values.
The funds will be available for purchase on January 1, 2016, and are being launched within IFA’s Investing for Catholics (IFC) division. According to the firm, the risk-based funds are designed “to both complement the TDF lineup, as well as to provide a suitable investment alternative for Catholic defined benefit plans.”
IFA says it unveiled the funds to a strong response at the recent annual Catholic Diocesan Fiscal Managers Conference (DFMC) held on September 27 in Atlanta, “fresh on the heels of Pope Francis’ historic visit to the United States.”
The firm explains the funds this way: “The IFC target-date funds are thoughtfully designed to invoke the simplicity of low-cost, easy-to-use managed solutions, with one major differentiator—the stock funds used in the IFC funds closely match the guidelines for socially responsible investing as laid out by the United States Conference of Catholic Bishops (USCCB). This distinction makes the funds an excellent default investment for plans, and marks a significant advancement for Catholic retirement.”
Funds are available for investment by eligible qualified retirement plan trusts only. The firm expects to target mainly 403(b) church plans, but a recent nod of approval by the Department of Labor for greater use of environmental and social factors in qualified retirement plan investment decisionmaking could change that moving forward.
The firm says it developed the daily valued funds in collaboration with Hand Benefits & Trust, a BPAS Company, and based them on IFC’s prudent and socially responsible investment strategies. The new funds will be accessible to employees of Catholic organizations through their retirement platforms. Reporting for quarterly holdings and monthly performance returns will be available through Morningstar.
More information is at http://www.ifa.com.