Many defined contribution pension plans offer participants stable value funds as a conservative investment option. Defined benefit pension plans and health and welfare benefit plans also may invest in stable value funds. Stable value funds primarily invest in guaranteed investment contracts (GICs) issued by insurance companies or banks, synthetic GICs, or in a common collective trust or mutual fund which invests in these securities.
FASB Accounting Standards Codification™ (ASC) 962-325-35, Plan Accounting - Defined Contribution Pension Plans, and ASC 965-325-35, Plan Accounting - Health and Welfare Benefit Plans, specify how certain stable value investments are reported in the financial statements of defined contribution pension and health and welfare plans. The EBPAQC has compiled the following tools and resources to assist members in understanding and auditing stable value investments.
FASB ASC 962-325-35 and ASC 965-325-35
AICPA Technical Practice Aids 6931.08-.10
The AICPA issued three Technical Practice Aids (TPAs) to provide additional guidance on implementing FASB ASC 962-325-35 and ASC 965-325-35, which clarify the types of investments covered, financial statement presentation of investments in common collective trust (CCT) funds and master trusts, and related disclosure requirements.
EBPAQC "Topix" Primer, Stable Value Funds and Investment Contracts—An Overview
This non-authoritative practice tool developed by the EBPAQC provides general and background information on stable value investments, along with information about the relevant auditing and accounting standards, in an easy-to-understand format.
AICPA Conference Materials
PowerPoint Slides from May AICPA EBP Conference Session
View the PowerPoint presentation from the "FSP on GICs" session at the May 2007 AICPA EBP Conference, which were prepared by Michele Weldon of PricewaterhouseCoopers LLP.