Changes may be coming to one of your retirement plan's safer investment options.
Many 401(k) plan participants aren't familiar with this corner of their investment choices. Money-market funds and others, known as stable value funds, act as cash equivalents; they provide small and steady returns, along with principal protection.
Now, new, more restrictive rules on money-market funds will be taking effect in October, paving the way for changes to 401(k) plan investment menus.
"We have used money-market reform as a gateway to re-engage retirement plans on cash equivalents and what's appropriate in a low rate environment," said Aaron Pottichen, a plan consultant at CLS Partners Retirement Services. "More of them have opted to replace money-market funds with stable value."