stable value funds and their close cousins, guaranteed investment contracts, together accounted for 21.3 percent of the assets in such plans in September [2006]
...
The stable value funds in 401(k) plans are generally a pool of short-term bonds or other debt-market investments protected by an insurance contract known as a wrapper.... The underlying investments are generally corporate bonds, which yield more than government bonds but are also at a greater risk for loss of principal. He said Treasury bonds were a more secure long-term choice than stable value funds, which may be subject “to the law of unintended consequences."
...
Like other stable value funds in 401(k) plans, [the Trust Advisors Stable Value Plus fund] was not a mutual fund but a collective trust.

TIAA Traditional is a guaranteed insurance contract and not an investment for federal securities law purposes.

Stable value investment options may be offered by investment managers, trust companies, or insurance companies in various structures, such as separately managed accounts, commingled funds or guaranteed insurance accounts. Sometimes a stable value investment option will be managed by a plan sponsor. While stable value investment options may be managed or structured in a variety of ways, the important similarity is the use of stable value investment contracts, issued by banks, insurance companies, and other financial institutions, which convey to the investment option the ability to carry certain assets at book value.

[Stable value as an] investing option has disappeared for individuals [in 2005] because of questions raised by the Securities and Exchange Commission about how to value the funds, although no formal ruling against them has been made.
...
Stable value funds have been available for many years, and remain available today-although on a much more limited basis-in some 401(k) plans and defined benefit pension plans maintained by employers. These investments come under the jurisdiction of the U.S. Department of Labor, which has strict, but somewhat different regulations, from the SEC. The SEC's questions affect investments by individuals in IRAs ...
Scudder launched the first stable value IRA fund in 1997, offering the funds as Scudder Preservation Plus Income and Scudder Preservation Plus. Others were offered by PBGH, Gartmore Morley, Oppenheimer and other mutual fund managers.
But the SEC began raising questions about how to determine the daily valuation of funds with insurance wrappers, which managers had been pricing at book value. The wrapper agreement, which is what made the stable value fund what it was, was also the part that was raising questions at the SEC. The SEC, which initially approved the funds, will not comment on the situation other than to say that there are no stable value funds now registered with the SEC, although there are some nonregistered ones in existence, says John Nester, an SEC spokesman.

Between 1992 and 2001, Summers held various positions in the US Treasury Department, including that of Treasury Secretary from 1999 to 2001. Summers has described the 1990’s as a time when “important steps” were taken to achieve “deregulation in key sectors of the economy” such as financial services. He has also said that during this period government officials and private financial interests collaborated in a spirit of cooperation “to provide the right framework for our financial industry to thrive.” Summers recommended before he left the Treasury Department that removing policies that “artificially constrict the size of markets” should remain a priority for the US government.
Along with Robert Rubin and Alan Greenspan, Summers brought about elimination of key US financial regulations including the Glass-Steagall Act. He was particularly aggressive in his efforts to block regulations of derivatives, regulations that might have prevented the economic meltdown the US suffered in 2008. According to economist Dean Baker, "The policies he promoted as Treasury Secretary and in his subsequent writings led to the economic disaster that we now face."

Rates shown above are based on a 67-year old choosing a single life annuity with a 10-year guarantee period or a joint life annuity with a 20 year guarantee period.

Step-up in basis has been eliminated twice during the past 50 years, and each time, the change was short-lived.
Step-up in basis was first eliminated by the Tax Reform Act of 1976 and replaced with a carryover basis regime. The carryover basis rules were heavily criticized and repealed a few years later, before they had taken effect.
The Economic Growth and Tax Relief Reconciliation Act of 2001 repealed the estate tax and adopted a carryover basis regime [no step up] for calendar year 2010 only ...
Congress eventually threw everyone a curveball. In mid-December [2010], Congress retroactively restored the estate tax and step-up in basis for 2010 decedents. However, for decedents who died in 2010, estate executors could opt out of the estate tax and into a carryover basis tax regime.

a little SCHW and BAC

Days after one of the largest bank failures in U.S. history, the fallout continues. Some of the country's top banking and financial regulators appeared before the Senate Banking Committee on Tuesday to testify about what led to the downfall of Silicon Valley Bank. Policymakers will be debating whether new laws, rules or attitudes are needed to keep other banks from going under.

Five takeaways from Tuesday's hearing:
• Silicon Valley Bank's management messed up
• Regulators issued warnings, but the problems were not fixed
• Modern bank runs can happen really fast
• Other banks will pay for the failure, but maybe not all banks
• Bank executives could pay

• Silicon Valley Bank's management messed up-
Regulators had some tough words about SVB's management at the hearing. Silicon Valley Bank more than tripled in size in the last three years, but its financial controls didn't keep pace.
The government bonds it was buying with depositors' money tumbled in value as interest rates rose, but the bank seemed unconcerned by that. "The [bank's] risk model was not at all aligned with reality," said Michael Barr, the Federal Reserve's vice chair for supervision. "This is a textbook case of bank mismanagement."
• Regulators issued warnings, but the problems were not fixed-
How much blame should be laid at regulators feet? That was a question that cropped up repeatedly during the hearing.
Barr stressed that federal regulators had repeatedly warned the bank's managers about the risks it was facing, at least as far back as October 2021. The bank was served with formal notices documenting "matters requiring attention" and "matters requiring immediate attention." But the risks remained and the Fed stopped short of ordering changes, which frustrated some of the senators in the Senate Banking Committee from both sides of the aisle.
The problems developed during a time when the Fed was generally pursuing a light touch in bank regulation. In 2021, for example, the Fed issued a rule — at the urging of bank lobbyists — noting that guidance from bank supervisors does not carry the force of law. That led some senators to call out colleagues who pushed for lighter rules, only to turn around and blame a lack of regulatory muscle for the bank's failure.
• Modern bank runs can happen really fast-
In their testimony, regulators also stressed the speed at which the banks collapsed. When big depositors got wind of the problems at Silicon Valley Bank, they raced to pull their money out, withdrawing $42 billion in a single day. The bank scrambled to borrow more money overnight, but it couldn't keep up. By the following morning, depositors had signaled plans to withdraw another $100 billion — more than the bank could get its hands on.
• Other banks will pay for the failure, but maybe not all banks-
Also under scrutiny throughout the testimony, was the federal regulators' decision to backstop all deposits at SVB as well as Signature Bank. Silicon Valley bank was taken over by the FDIC on March 10, but fears of a more widespread bank run led regulators to announce days later they would guarantee all the deposits at both SVB and Signature Bank, not just the $250,000 per account that's typically insured.
By law, that money will come from a special assessment on other banks — and that's left many senators unhappy. The FDIC has some discretion in how those insurance costs are divided up among different categories of banks. A recommended formula will be announced in early May.
• Bank executives could pay-
The role of SVB's top executives came under scrutiny as well during the hearing. Lawmakers expressed frustration at reports that executives at Silicon Valley Bank sold stock and received bonuses shortly before the bank's collapse.
Although the government doesn't have explicit authority to claw back compensation, it does have the power to levy fines, order restitution and prohibit those executives from working at other banks, if wrongdoing is found. Sen. Chris Van Hollen, D-Md, said "Almost every American would agree it's simply wrong for the CEO and top executives to profit from their own mismanagement and then leave FDIC holding the bag,"