An old friend to many members, the Guaranteed Fund, has gone away. But its replacement – the Stable Value Fund – offers a similar focus on preserving your money, with a higher current rate of return.
The Guaranteed Fund actually created financial risk that could impact INPRS' financial stability, while it provided members a very small rate of return. So, in 2016, the Indiana General Assembly passed legislation requiring us to transition balances in the Guaranteed Fund to its Stable Value Fund.
The Stable Value Fund, which has been available to some INPRS plan members for years, has the added benefit of a higher current rate of return and may be a good choice for members interested in an Annuity Savings Account (ASA) investment option which primarily focuses on principal preservation.
The Stable Value Fund is among the lowest-risk investment options available with us. As of March 31, 2016, the fund has produced a one-year return of 1.41 percent, while the Guaranteed Fund offered 0.66 percent. On a $1,000 annual investment over the course of 20 years, this increased return can make a big difference in your account balance upon retirement, while still focusing on preserving your principal balance. The chart below provides an example of how the Stable Value Fund could provide the peace of mind a low-risk investment fund offers, while historically providing a better interest rate.
|Guaranteed Fund||Stable Value Fund|
|Balance in 20 years ($20,000 principal balance)||$21,446||$23,243|
|Earnings over 20 years||$1,446||$3,243|
|*Past performance is not a guarantee or a reliable indicator of future results. There are risks involved in investing in the Stable Value Fund including the possible loss of principal. Read the Stable Value Fund fact sheet carefully.|
It’s important to remember that your investment choices play an important role in your retirement. Choosing the right investments for your situation, considering risk and return, will impact your ASA balance as you approach retirement.
We are here to be a resource for you as you review your choices. If you have questions, please contact us Monday through Friday, 8 a.m. to 8 p.m. EST, at (844) GO-INPRS.