A reversal of the wholesale retreat of banks and insurers from guaranteeing 401(k) participants against losses in these fixed-income-heavy capital preservation strategies is well under way.
Charles Schwab Corp. last week became the latest provider of a stable value product to exit the business. Citing difficulties in securing wrap guarantees, Schwab sais it would liquidate its $7.6 billion fund.
But Pensions and Investments reports Schwab's exit runs counter to a broader trend in the 401(k) plans business. Wrap provders are reversing the retreat from stable value products that followed the disaster of 2008. Why? Fatter fees.