Aetna Life Insurance Co., Hartford, Conn., has introduced a pooled stable value fund designed to correct what it views as inherent inequities in traditional pooled GIC funds.
The Aetna Advantaged Fund uses a series of quarterly closed-end accounts rather than a single open-end fund. Deposits from new clients, or new deposits from existing clients, are placed in a new closed-end account each quarter and earn the established rate for that quarter rather than a blended rate over a long period of time, said Stephen F. LeLaurin, director of Aetna's guaranteed products.
In a traditional guaranteed investment contract pooled fund, all participants receive the same rate, he said.
With the Advantaged Fund, "each of our closed-end accounts will have its own investments and rates of return. Deposits from a new client, or new deposits from existing clients, will be placed in a new account with its own investments and receive a unique interest rate on those new deposits," he said. The result, he said, is that each client's return pattern will be unique and driven by that client's own cash flows.
"This is a much more equitable approach than a typical GIC pool that provides the same return to all plans, regardless of when funds were deposited," he said.
Investments in GICs and alternative stable value investments will be selected by Becker & Rooney Inc., Teaneck, N.J.