According to a recent article from Employee Benefit News, the U.S. Securities and Exchange Commission has issued new amendments to the rules regarding money market mutual funds.

  1. Money market funds managed by mutual fund families will be required to allow their net asset value (NAV) to fluctuate based on the underlying value of the investments in the fund.
  2. Money market funds will have the ability to charge redemption fees and halt redemptions during certain periods of time in order to better manage the portfolio

What this means for participants is that selecting a money market account may no longer guarantee participants won’t lose money by investing in a money market fund.  Money market funds have traditionally been valued at $1 per share and typically have not experience redemption fees.

These changes will not go into effect until the fall of 2016 and keep in mind that government money market funds do not fall under these new amendments.

Does your plan have participants that will be affected by this change more than most?