Chrysler Stable Value Fund Posts Loss

A retirement plan fund for Chrysler LLC employees that was designed not to lose money has decreased to 89 cents on the dollar, Reuters reports.

Losses for the Chrysler Stable Value Fund B, which was in the Chrysler Salaried Employees’ Income Deferral Plan, resulted from market volatility and a large number of withdrawals in January, Chrysler spokesman David Elshoff told Reuters.

“While it is unfortunate that the Stable Value Fund B did not pay out at 100% of its book value, participants had been cautioned that they could assume financial risk in unsecured plans, including the Stable Value Fund B,” Elshoff said, according to the news report.

Elshoff added that the supplemental savings plan and the Stable Value Fund B are not related to Chrysler’s 401(k) savings plans or the 401(k) stable value fund investment option.

Individuals have invested about $520 billion in stable value funds through roughly 138,000 defined contribution plans, including 401(k), 403(b), and 457 plans, according to the Stable Value Investment Association, the news report said. The funds typically invest in high-quality bonds and buy contracts, known as wraps, from banks and insurance companies to guarantee principal and interest and provide positive returns. They have traditionally been viewed as being as safe as cash, and millions of investors use them as a substitute for traditional money market funds.