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Explanation of Option C Fair Market Value Adjustments

Authored by: Jerry Rich
Date: September 30, 2022

For cash distributions or transfers from Option C, a Fair Market Value (FMV) adjustment is in effect for any month for which the preceding month portfolio value was less than the annuitizable value of the fund. The current FMV adjustment, if any, is calculated after the close of a month’s accounting period.

So far in 2022, six months have been at 100% (no FMV adjustment). Two months have seen FMV adjustment, July (98.3%) and September (99.3%).

FCMM reminds Option C investors of the following information …

The Option C Lifetime Fund is a collective investment fund which aims to provide steady long-term earnings to the participant. Using a balanced investment approach, Option C is designed to be less volatile and smooth out market returns for more stable earnings rates over time.

Option C is primarily structured to offer reliable value that can be fully converted to a Monthly Income Benefit ("in-plan annuity"). Alternatively, when taken as a cash value for other reasons (such as transfer to other investments or cash distributions or rolled out of the Plan), a fair market value adjustment (reduction) may be applied when accrued annuity value is greater than current portfolio market value of Option C.