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COLLECTED WISDOM™ on Target-Date Funds

Target-Date funds have become popular with 401k plan sponsors, vendors and participants, but choosing the appropriate target-date fund for a plan is not easy.

This archive contains not only the most current material on the topic, but also older items that are still relevant, provide background, perspective or are germane to the topic.

If you find a broken link or an items that you feel is outdate, irrelevant or no longer appropriate, please let us know.

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Evaluating Target-Date Funds - A Fiduciary's Guide

Abstract: Whether there are target-date funds in your defined contribution plan lineup or you're considering adding them, evaluation and review are critical to your due diligence process as a plan fiduciary. This guide is focused on the practical steps to take during the evaluation process, which may include comparison and selection of TDFs, understanding their underlying investments, reviewing fees, developing communications, and documenting the process.

Source: Vanguard.com, October 2018

The Evolution of Target-Date Funds: Using Alternatives to Improve Retirement Plan Outcomes

Abstract: The underlying investments in DC plans need to evolve to improve retirement income outcomes for participants. The strategic use of alternative assets in a TDF structure, or a diversified TDF, demonstrates that including these asset classes can improve expected retirement income and mitigate loss in downside scenarios.

Source: Georgetown.edu, October 2018

Target-Date Funds Risk Missing the Mark for Retirees

Abstract: One of the most popular investment strategies employed in US retirement accounts is ill-suited for the job, according to research on retirement outcomes. These strategies are known as target-date funds. Academics suggest such products may struggle to deliver a consistent stream of income for retirees.

Source: Ft.com, September 2018

Target-Date Funds Widely Used by Younger Plan Participants

Abstract: Younger 401k plan participants have large allocations to target-date and other types of balanced funds, according to a new joint study released today by the Investment Company Institute and the Employee Benefit Research Institute. At year-end 2016, 64 percent of 401k participants in their twenties held target-date funds, compared with 45 percent of 401k participants in their sixties.

Source: Ebri.org, September 2018

Target-Date Outcomes Improve With Introduction of Alternative Investments

Abstract: As more plans adopt qualified default investment alternatives for their set-it-and-forget-it participants, target-date funds have grown to nearly $2 trillion in assets. Now that the problem of getting people enrolled in a retirement plan has been addressed, it is time to tackle how investments in these plans are chosen to make sure there is a focus on long-term outcomes and performance.

Source: Benefitnews.com, August 2018

The Dangers of Putting Your 401k on Autopilot

Abstract: Among the biggest DC trends is the use of target-date funds to grow retirement wealth. According to a recent Vanguard report, nine in 10 defined contribution plan sponsors offered target-date funds as an investment option at the end of 2017. If your retirement plan currently includes target-date funds or you're considering them, it's important to balance their pros and cons.

Source: Investopedia.com, August 2018

Are Target-Date Funds Enveloped by Unrealistic Expectations?

Abstract: It isn't hard to find a plan that has invested in target date funds (TDFs). But it can be hard to find assessments that ask hard questions about them. A recent white paper fills that void and asks whether TDFs are the panacea some may think.

Source: Asppa-net.org, July 2018

Target-Date Funds the Engine Powering Continued Growth

Abstract: Defined contribution money managers reported a large jump in target-date assets under management to $1.44 trillion as of Dec. 31, up 30.5% from the end of 2016, according to Pensions & Investments' annual survey. Consultants cited target-date strategies' prominence as default investment options, the increased use of auto features, and positive market returns in 2017 as contributors to those funds' growth.

Source: Pionline.com, July 2018

401k Advisory Firms With Custom TDFs Offer Pain, Solace to Asset Managers

Abstract: Target-date funds built by firms with large networks of 401k plan advisers are beginning to gather significant assets, posing a direct threat to some asset managers trying to distribute their own products.

Source: Investmentnews.com (registration may be required), July 2018

The High Stakes of QDIA Selection

Abstract: For plan sponsors, the tremendous growth in assets, changing market conditions and balancing the needs of younger and older participants complicates selection and monitoring of target-date funds. Advisors can help by bringing plan demographics to the discussion and looking at the distribution of ages and account balances of a plan population.

Source: Americancenturyblog.com, June 2018

Target-Date Fund Benchmarks

Abstract: This article describes the benchmarks that are currently available and offers some guidance on selecting the appropriate benchmark. Fiduciaries should align the objectives of their TDF with those of the benchmark, and confirm that the benchmark glide path and underlying allocations are in line with the TDF that is being evaluated.

Source: Targetdatesolutions.com, June 2018

Target-Date Funds: Do the Risks Outweigh the Rewards? An Economist's View

Abstract: Economist Laurence Kotlikoff points out that economic theory does not support TDFs' age-based thesis. He cites two separate studies that independently concluded that we should hold the same portfolios as we age. In other words, our investment decisions should be the same when we're 30 as when we're 90. This article reviews why.

Source: 401ktv.com, June 2018

More 401k Savers Go All-In on TDFs

Abstract: The data are in, and they tell a powerful story about the state of retirement in America. The 17th edition of How America Saves delves into the retirement savings behavior of 4.6 million participants in defined contribution (DC) retirement plans for which Vanguard provides recordkeeping services. Our data-rich report examines trends in how participants accumulate, manage, and access retirement savings.

Source: Vanguard.com, June 2018

How to Best Vet 401k Target-Date Funds

Abstract: Target-date funds differ significantly in terms of asset classes, glide path, fulfillment, and fees. It is a rich variety to choose from and at the same time may add to one's perplexity. So, how do plan sponsors evaluate a TDF series?

Source: 401kspecialistmag.com, May 2018

The $1 Trillion Target-Date Fund Landscape in Five Charts

Abstract: Target-date funds hit a momentous mark in 2017 by eclipsing $1 trillion in assets.The funds' unimpeded growth means target-date funds play an increasingly important role in retirement success for more and more investors. Morningstar's recently released annual report covers recent developments in the competitive landscape. Here's a summary of target-date fund landscape in just five charts.

Source: Morningstar.com, May 2018

Passive Target-Date Funds: Separating Myth From Reality

Abstract: The use of passive target-date funds in DC plans continues to grow, in part due to their low-cost relative to other TDF options. While the cost advantages of these TDFs can be attractive, cost represents only one of the factors that plan sponsors and their advisors should consider when selecting a TDF on behalf of participants. This 11-page paper highlights three common myths about passive TDFs to help plan sponsors dig deeper in their due diligence and ensure they follow a prudent selection process based firmly on their specific plan needs.

Source: Schwabfunds.com, April 2018

Target-Date Fund Benefits -- Beyond Returns

Abstract: Beyond the obvious benefit of having a professional manager and rebalance portfolios, the HR manager believes that target-date strategies relieve employee stress and burden of having to select and manage funds themselves.

Source: 401ktv.com, April 2018

TDF Analysis Highlights Passive Growth, Home Equity Bias

Abstract: In its discussions with TDF managers, Mercer has found many managers say they have not aligned with the ACWI, and have continued with portfolios that display home equity bias for a number of reasons; the research also shows strong growth in passive TDF market share.

Source: Planadviser.com, April 2018

More Critical Target-Date Trends to Consider

Abstract: Mercer is out with topical info on target date products, reminding all involved that the fact that so many participants simply default into TDFs does increase the importance of the plan sponsor's selection of the TDF provider.

Source: 401kspecialistmag.com, April 2018

Fidelity Puts Six Million Savers on Risky Path to Retirement

Abstract: Client money has continued to flow out of the Fidelity's Freedom Funds as retirement plan sponsors shift workers' savings to rivals in the target-date fund business. The exodus stems in part from unease with the way Fidelity has boosted performance, by ramping up risk. Since a strategy overhaul that took full effect in 2014, Fidelity has substantially increased exposure to stocks, including those from volatile emerging markets. The firm also scrapped a long-held belief of sticking to pre-set allocations of stocks, bonds and other assets in target-date funds.

Source: Reuters.com, March 2018

Target-Date Funds: Three Things to Consider

Abstract: This article addresses three major features common to most TDF's structure: asset allocation, management style, and fees. If not evaluated carefully -- on a manager-by-manager basis -- could result in a mismatch between an employer's goals and participant investment results.

Source: Psolve.us, February 2018

TDFs Have Improved Participant Diversification

Abstract: About a third of participants across Millennials, Generation X, and Baby Boomers who self-manage the investment of their plan accounts are more conservative than a typical target-date fund appropriate to their age.

Source: Plansponsor.com, January 2018

Target-Date Fund Confusion

Abstract: The proliferation of target-date fund varieties can confuse many plan sponsors. One survey found that while nearly two-thirds of plan sponsors consider investment performance the most important selection criterion when choosing a TDF for their participants, more than half are not confident that they have a solid basis for benchmarking the TDFs against other similar funds in the marketplace.

Source: Orbablog.com, January 2018

A Tipping Point for Target-Date Funds

Abstract: Vanguard plan participants reached a critical tipping point. Half of all Vanguard participants are invested in a single target-date fund. And 57% of all participants were solely invested in a professionally managed allocation: 4% were using managed account options, 3% held a single-risk-based balanced fund, and 50% held one TDF.

Source: Vanguardinstitutionalblog.com, November 2017

Competition for Target-Date Funds Is Heating Up

Abstract: Competition for target-date funds in the DC market is showing no sign of abating. DC Specialists are looking outside the two-dominant target-date fund providers. While American Funds and Vanguard continue to square off for the greatest proportion of target-date fund dollars among this elite plan advisor segment, three investment managers are gaining ground.

Source: Marketstrategies.com, November 2017

Is Open Architecture the Answer for Target-Date Managers?

Abstract: Despite the challenging barriers to entering a concentrated market, a new study points to open-architecture series as a way for target-date fund managers to benefit from increased demand for their products.

Source: Napa-net.org, November 2017

2017 Target-Date Fund Buyer's Guide

Abstract: The 2017 TDF Buyer's Guide represents $1.6 trillion in assets as of June 30. Of the target-date fund market reported, 60% of products are in mutual funds, 37% in collective investment trusts, and 3% in variable portfolios. The analysis is based on the 71 off-the-shelf, or prepackaged, products and custom solutions are excluded.

Source: Planadviser.com, November 2017

Advisor Q & A on TDF Monitoring

Abstract: Research shows that the majority of assets in DC plans today are invested in the QDIA, and most of those assets are invested in target-date funds. In speaking with top advisor teams in the industry, PIMCO learned that many would benefit from more guidance on how to establish and conduct an ongoing TDF monitoring process.

Source: Chaoco.com, October 2017

Target-Date Fund Selection -- Actively Selecting a Passive Offering

Abstract: It is important that plan sponsors understand that choosing a passive target-date option is far more complicated than opting for a passive option in a straightforward, single-style strategy. This 4-page paper highlights the key issues surrounding passive target-date funds, including how they differ from active strategies and how to differentiate between passive offerings.

Source: Fiallc.com, September 2017

TDFs Outperformed Typical DC Investor Since 2006

Abstract: The Callan DC Index also shows nearly three-fourths of DC plan account balance growth has been due to investment performance. Callan researchers explain the average TDF has outperformed DC plan investors by 76 basis points annually since they first started measuring in 2006.

Source: Plansponsor.com, September 2017

More 403b Plans Offering Target-Date Funds as QDIA

Abstract: Target-date funds grew in popularity among 403b plans last year as more plans offered this option as a qualified default investment alternative, according to a report just issued.

Source: Pionline.com, August 2017

How to Build a Better TDF

Abstract: The DC industry has devoted tremendous amounts of time and effort to improve the likelihood of successful retirement outcomes. But, much like the ancient Roman goddess Fortuna capriciously interfering in the lives of mortals, random economic and market forces largely drive retirement outcomes.

Source: Callan.com, August 2017

How to Select the Right TDF for a 401k Plan

Abstract: The promise of TDFs is that they are designed to protect investor assets from the risk of large losses stemming from inadequate or improper portfolio diversification. For advisers, this is directly aligned with the obligation under ERISA to protect assets. For participants, the funds simplify investment decisions. But simply choosing any TDF won't do, because there are underlying risks of choosing the "wrong" TDF relative to other available options.

Source: Investmentnews.com (registration may be required), August 2017

The Case for Custom Target-Date Funds

Abstract: The increase in the use of custom TDFs by defined contribution plans has been significant. This 4-page paper explains why plan fiduciaries should consider custom TDFs when selecting the investment options for a 401k plan.

Source: Ipbtax.com, August 2017

Taking a Risk-Based Approach to Evaluating Target-Date Funds

Abstract: How can plan sponsors objectively assess the merits of a glide path and its affect on plan members? The once-popular method of comparing funds based on their equity percentage method doesn't do justice to what really matters to plan members: retirement outcomes.

Source: Benefitscanada.com, August 2017

The Shift From Recordkeeper Proprietary Target-Date Funds to Nonproprietary Solutions

Abstract: Competition is crowded in the target-date market today. The number of target-date providers has risen 16% from five years ago, as more and more asset managers started offering new target-date solutions. About 78 firms offer more than 139 different target-date fund series today.

Source: Abglobal.com, August 2017

RFP for Target-Date Funds? It's a Good Idea

Abstract: Although target-date funds may be very popular, they are widely misunderstood. TDFs must be prudently selected and have reasonable fees to satisfy the DOL's default investment safe harbor and analyzing them isn't easy.

Source: 401ktv.com, August 2017

401k Plans Sponsors Reject Proprietary Fund Products

Abstract: Study reveals a dramatically shifting target-date landscape where recordkeepers who offer their own target-date funds are losing share of assets on their own platforms as plan sponsors are increasingly choosing funds from other providers.

Source: 401kspecialistmag.com, August 2017

How the Target-Date Fund Can Help Maximize Plan Design

Abstract: Plan sponsors have two powerful tools that could help nudge participants toward improved retirements: plan design and target-date funds. However, these tools are frequently considered separately.

Source: Blackrock.com, July 2017

Target-Date Funds Don't Serve Employees Well: Study

Abstract: Most target-date funds aren't serving employees well, argues a paper published earlier this month. While target-date funds are an easy option for employees who aren't comfortable with making investment decisions, the funds don't consider employees' desired retirement incomes or how well the portfolio fares over time.

Source: Benefitscanada.com, June 2017

DOL's Fiduciary Rule Improves Target-Date Funds

Abstract: The DOL Fiduciary Rule goes into effect June 9, 2017, despite expectations of a cancellation. Most believe the Rule is for the retail investor, but it will also help target-date fund beneficiaries immensely. This article discusses the four TDF fiduciary practices that will need to improve to meet the Best Interest Standards.

Source: Seekingalpha.com, May 2017

Three Questions for Assessing a Target-Date Fund's Fixed Income Allocation

Abstract: In target-date funds, fixed income assets play a critical role in managing portfolio volatility and generating strong risk-adjusted returns. Plan sponsors may want to consider the points reviewed in this 4-page paper when evaluating a TDF's fixed income allocation.

Source: Jpmorgan.com, May 2017

Are Your Target-Date Funds Making You a Target?

Abstract: Although participants' entire accounts may be invested in these funds, all too many TDFs are selected by fiduciaries simply because it is convenient, or there is some incentive, to offer their provider's funds. This makes them an easy target for class action lawyers. Custom TDFs, which are designed for an employer's specific participant group, are also vulnerable if they don't include appropriate investments.

Source: Cohenbuckmann.com, May 2017

Answers to Your Target-Date Fund Questions

Abstract: Morningstar recently released its annual report on target-date funds. This year's report highlights the major trends and developments in the target-date fund space by addressing some of the questions most frequently asked by investors, investment consultants, and the like.

Source: Morningstar.com, April 2017

2017 Target-Date Fund Landscape

Abstract: Target-date funds' clear outlook for growth has resulted in an ever-changing landscape, as managers vie for market share by attempting to set themselves apart from one another. The changing landscape undoubtedly spurs questions in the minds of investors, and this year's report aims to deliver insight into the trends in the target-date fund space and provide added perspective by answering questions that frequently arise.

Source: Morningstar.com, April 2017

Target-Date Funds: Embracing Open Architecture

Abstract: DC plan-level best practices call for an open-architecture, or multimanager, lineup of investment offerings, but that line of thinking rarely extends to target-date portfolio construction. If open architecture is important, then more target-date funds should be open.

Source: Jhinvestments.com, April 2017

Target-Date Funds: Can Employers Get Lost in Space?

Abstract: Target-Date Funds are as diverse as the universe. Plan sponsor fiduciaries -- who must exercise prudence and demonstrate expertise in selecting the investments that will be offered to plan participants -- must understand the unique features of their workforce as well as the features of each TDF series they consider before making their selection. Failure to do so "as an expert" can result in potential personal liability for fiduciaries.

Source: Alliantwealth.com, April 2017

DOL's Best Interest Standard Uplifts Target-Date Funds

Abstract: The Best Interest Standard of DOL's Fiduciary Rule will benefit target-date fund participants immensely. This 6-page article identifies specific applications of the Standard to TDFs.

Source: Targetdatesolutions.com, April 2017

Move to All Passive TDFs in DC Plans Troubling Trend

Abstract: As most plan sponsors with DB plans use a mix of active and passive funds, and most advisors recommend a combination, the move to all passive TDFs in DC plans is a troubling trend. Why is it happening and what are the potential results?

Source: 401ktv.com, March 2017

When It Comes to Target-Date Funds, You Better Shop Around

Abstract: Many plan sponsors are shifting away from recordkeepers' target-date funds to nonproprietary versions. But others are still using yesterday's model. The article suggests it's time to take a look around.

Source: Abglobal.com, March 2017

Target-Date Decisions, Decisions: Getting the Biggest Bang for the Buck

Abstract: There are a host of target-date and plan design initiatives that the DC plan sponsor community is considering today that might, in theory, improve the retirement outcomes for their employees. This 14-page paper tests many of them by measuring the incremental impact each would have had over a specific 40-year time frame.

Source: Gmo.com, March 2017

TDF Adoption in 2016

Abstract: Use of target-date funds in DC plans continued to grow. At year-end 2016, 9 in 10 plans offered a TDF, 72% of all participants had a position in the funds, and the funds accounted for half of total plan contributions. Eight-page report.

Source: Vanguard.com, February 2017

Understand Your Target-Date Fund Series

Abstract: To help out plan sponsors and investment committees, the DOL offers tips for ERISA plan fiduciaries with respect to choosing target-date funds, including the establishment of a process for the periodic review of your selected target-date funds. The DOL reminds plan sponsors that plan fiduciaries are required to periodically review the plan's investment options to ensure that they should continue to be offered.

Source: Orbablog.com, February 2017

Plan Sponsors, Approach Target-Date Funds With Caution

Abstract: Even though the DOL has suggested that selecting a target-date fund with a lifetime income component as a plan's default investment alternative may be prudent, the protections afforded by ERISA 404(c) will not apply if the product does not meet all of the QDIA requirements. This means that a plan fiduciary will not be automatically insulated from liability for participants' investment losses by selecting this investment option as the default alternative.

Source: Alston.com, February 2017

Four Questions to Improve Your Target-Date Fund Selection Process

Abstract: With so much concentration of money in one type of investment, it's important retirement plan advisers have a process in place to choose the right target-date fund for their clients. Here are a few questions advisers can use to improve their TDF selection process.

Source: Investmentnews.com (registration may be required), February 2017

Target-Date Funds: What's Under the Hood?

Abstract: While nearly 60 percent of new 401k participants have savings in target-date funds, little research has looked under the hood of this investment vehicle. This analysis uses a unique dataset with extensive information on the underlying mutual funds that TDFs hold.

Source: Crr.Bc.edu, February 2017

Is Your Proprietary Target-Date Fund a Trojan Horse for Underperforming Managers?

Abstract: Recognizing that not all managers excel in all asset classes, the marketplace has evolved and today most plans employ an open-architecture approach to core menu construction. In fact, it is unusual for a plan's menu to use the same investment manager for more than two or three different asset classes. Yet, with target-date funds expected to represent 48% of defined contribution assets by 2020, are sponsors unknowingly reverting to an antiquated plan design?

Source: Rackcdn.com, January 2017

Target-Date Fund With Annuity That Restricts Transfers May Be Prudent Default Investment (but not QDIA)

Abstract: The DOL recently concluded that a target-date fund with a fixed guaranteed annuity restricting transfers or withdrawals for a 12-month period does not meet the qualified default investment alternative requirements. But noting the need for lifetime income as a public policy issue, DOL said a fiduciary could prudently select a default investment that complies with all requirements of the QDIA regulation save the liquidity and transferability rules. Fiduciaries may be hard pressed, however, to select such an investment as a plan default investment because it does not protect them from liability for investing contributions on behalf of employees.

Source: Conduent.com, January 2017

A Better Methodology for Monitoring Target-Date Funds

Abstract: Plan sponsors are challenged to create a prudent process for selecting and monitoring the plan's target-date fund, and for benchmarking their selection against other options available in the market, relative to performance, risk and fees. Cammack introduces their TDF methodology in this paper.

Source: Cammackretirement.com, January 2017

Target-Date Funds With Annuities Can Be Prudent Default Investments

Abstract: Target-date funds with annuities can now be considered prudent default investment options, so long as certain liquidity requirements are met, the Department of Labor said in informal guidance.

Source: Bna.com (registration may be required), January 2017

Using an EPS to Evaluate Target-Date Funds

Abstract: What is an Evaluation Process Statement? An EPS is a written document that describes in detail a complete sequence of steps for selecting and monitoring investments, including the qualified default investment alternative and target-date fund, that incorporate your plan's investment objectives, fiduciary priorities and risk constraints.

Source: 401ktv.com, December 2016

Target-Date Fund Managers Evolve to Capture Burgeoning 401k Market

Abstract: Over the last several years, TDFs have crafted new strategies and engaged in a marketing bonanza to stand out from the competition.

Source: Investmentnews.com (registration may be required), December 2016

Issues in Target-Date Fund Evaluation and Selection

Abstract: The investment community has made significant strides in understanding and evaluating target-date fund strategies over the past decade. Now, however, we have reached a plateau in target-date communication characterized by overly-simplistic dichotomies. This post will break down four key labels commonly used in target-date manager evaluation.

Source: Americancenturyblog.com, December 2016

Target-Date Fund Objectives Are Duplicitous So Objective-Based Investing is Convoluted

Abstract: What are the objectives for your plan's target-date funds? Good chance your fund provider has told you that they are to replace pay and manage longevity risk. But that's not what TDF providers say in their official documents, namely their prospectuses.

Source: Targetdatesolutions.com, November 2016

Five Things the DOL Wants You to Know About TDFs That You May Have Overlooked

Abstract: Target-date funds continue to expand in usage and popularity, but Nevin Adams believes there are some things the Labor Department wants you to know about TDFs that you may have overlooked.

Source: Napa-net.org, November 2016

A Primer on Target-Date Funds

Abstract: Over the last decade, the growth in retirement plan assets managed via target-date funds has developed into one of the most powerful trends in all of financial services. A large percentage of these assets are invested through the various defined contribution structures such as 401k, 403(b), and 457(b) plans. This article explores the history, structure, and role of target-date funds in retirement savings plans.

Source: Cammackretirement.com, November 2016

Seven Questions Plan Fiduciaries Should Ask About Target-Date Fund Strategies

Abstract: This short article deals with seven common questions around TDFs including, what due diligence should plan fiduciaries perform when choosing a TDF, should a plan fiduciary employ an active or passive strategy for managing TDFs, and how does a plan fiduciary decide whether a custom or proprietary TDFs is more appropriate?

Source: Strategicbenefitservices.com, November 2016

Custom Target-Date Fund Recommendations on the Rise

Abstract: A growing number of DC specialists -- financial advisors managing at least $50 million in DC assets -- are now recommending customized funds to their plan sponsor clients, further signaling a potential shift in the target-date fund marketplace.

Source: Marketstrategies.com, November 2016

Target-Date Fund Benchmarks Come in Two Colors: Black and White

Abstract: Fiduciaries are obligated to monitor and evaluate the performance of their TDFs, but relative to what? Choosing the "right" index is complicated by the fact that that the asset allocation, and therefore risk, of TDFs changes through time. But this challenge can be distilled down to a simple black or white decision when viewed from a fiduciary perspective because there are only two types of prudence: procedural and substantive.

Source: Targetdatesolutions.com, November 2016

Does the 'Agg' Make Sense for Target-Date Funds?

Abstract: Recently, target date fund managers have joined the conversation about whether the Barclays U.S. Aggregate Index ("the Agg") remains an appropriate benchmark for their bond exposure. BlackRock's analysis suggests that substituting part or all of the Agg exposure with other fixed income exposures offer either minimal or no benefit for most target-date funds.

Source: Blackrock.com, November 2016

DOL Fiduciary Ruling Prompting DC Advisors to Shift Focus

Abstract: Many DC advisors are altering their approach to rollover/distribution advice and are spending more time thinking about compliance than about adding value for their clients.

Source: Marketstrategies.com, October 2016

Target-Date Fund Glide Path Evaluation: What Really Matters?

Abstract: Given the importance of asset allocation decisions, plan consultants and advisors are increasingly seeing the value in fully understanding the philosophical underpinnings of the wide range of glide path designs available in the marketplace today. This article is intended to highlight key considerations plan fiduciaries may wish to incorporate into their glide path evaluation process.

Source: Manning-Napier.com, October 2016

Questions a Fiduciary Must Be Able to Answer About Their Target-Date Funds

Abstract: Retirement plan advisors and sponsors face vastly increased responsibilities today in the handling of their 401k target-date fund offerings. With increasing market uncertainty and the DOL's 'fiduciary rule,' these popular and important funds demand much greater involvement and oversight to meet the heightened complexity and rigor of new DOL compliance standards. This 5-page paper explains some of the specifics of the DOL's new rules and responsibilities for fiduciaries and offers guidance in successfully fulfilling them.

Source: Investbcm.com, September 2016

The Unknown Dangers of Target-Date Funds

Abstract: The idea behind Target-Date Funds is to group together investors based on years until retirement and then manage the fund in a way that suits the generally accepted risk tolerance of those investors. But, just like all mutual funds, there are certain characteristics one needs to look for in a Target-Date Fund before investing.

Source: Brightscope.com, September 2016

Understanding Custom vs. Proprietary Target-Date Funds

Abstract: A truly custom strategy utilizing open architecture (best-in-class mutual funds from multiple companies) will likely be complicated and expensive to implement. Therefore, plan sponsors with a unique demographic participant profile should attempt to find a good fit among the 50+ proprietary TDF providers before attempting to create a custom solution.

Source: Strategicbenefitservices.com, September 2016

Target-Date Fund Diversification: Don't Settle for Simple

Abstract: Plain-vanilla portfolios have become a major presence in the target-date world after a difficult period for diversification. The author of this article doesn't think it's a good idea to bet that "plain and simple" will continue to win.

Source: Abglobal.com, September 2016

Target-Date Funds and Managed Accounts: A Powerful Combination

Abstract: The combination of target-date funds and managed accounts may be the right recipe for your investment menu. The use of professionally managed allocations like TDFs and managed accounts is transforming participant portfolios. Both options provide significant benefits and should be offered as complementary strategies to address the diverse needs of evolving participant populations.

Source: Vanguard.com, August 2016

Fiduciary Checklist for Target-Date Fund Decisions

Abstract: Fiduciaries should be able to answer the following questions to feel confident they are following the Department of Labor's 2013 Tips for ERISA Plan Fiduciaries on target-date funds.

Source: Strategicbenefitservices.com, August 2016

Using Target Date Funds as a QDIA

Abstract: The Pension Protection Act of 2006 encouraged employers to adopt automatic enrollment features for their participant-directed plans by providing a new type of fiduciary liability relief for "default investments," or Qualified Default Investment Alternatives (QDIAs). Quick overview here.

Source: Strategicbenefitservices.com, August 2016

What is the Maximum Equity Exposure Allowed in TDFs as QDIAs?

Abstract: The QDIA regulations do not establish fixed income or equity exposures necessary to satisfy the requirement for a mix within a QDIA, but an investment fund or product with zero fixed income would not qualify as a QDIA.

Source: Retirementlc.com, July 2016

DC Plan Sponsors Embracing Non-Recordkeeper Target-Date Funds

Abstract: The survey of over 230 DC plan sponsors with plans ranging in size from $25 million to over $5 billion found that non-recordkeeper or off-platform target-date funds continue to grow in popularity among plan sponsors.

Source: Seic.com, July 2016

Is the Time Ripe for a Move to Custom Target-Date Funds?

Abstract: As target-date fund assets swell, a growing number of large plans have moved to custom TDFs -- the idea is custom target-date funds are just better than off-the-shelf target date funds. But plan sponsors shouldn't assume they ought to follow this trend.

Source: Napa-net.org, June 2016

A Second Look at How Target-Date Funds Change Their Allocations

Abstract: Target-date funds offer the premise of a one-stop solution for investors seeking professional allocation strategies. Despite this, there remains confusion about how to use target-date funds. Given this backdrop, author revisits target-date funds and notes some changes that came to light.

Source: Aaii.com, June 2016

Podcast: Three Key Pillars of Target-Date Fund Evaluation

Abstract: Target-date funds are the fastest growing investment in 401k plans primarily due to their popularity with plan sponsors as the QDIA. As some fiduciaries are starting to realize, evaluating target-date funds can be a bit tricky due to the numerous variances in style from one fund to another. Podcast discusses the three pillars of differentiation amongst target-date fund managers, glide path construction, investment diversification, and management style.

Source: 401kfridays.com, June 2016

New Hires Continue to Favor Target-Date Funds

Abstract: Interest in target-date and other types of balanced funds remained strong through 2014, with younger plan participants more likely to hold target-date funds than older participants, according to a new joint study released today by the Employee Benefit Research Institute and the Investment Company Institute. Among participants who were offered target-date funds, 65 percent opted to use them.

Source: Ebri.org, April 2016

Target-Date Funds: Getting Cheaper in a Hurry

Abstract: This article is about how an outside force has buffeted the target-date business, causing it to become the fastest-moving, most customer-responsive segment of the fund industry. Typically, mutual fund time is measured by decades. Among target-date funds, however, visible improvements occur each year. And the pace is only increasing.

Source: Morningstar.com, April 2016

Surveying the Target-Date Fund Landscape

Abstract: Morningstar recently released its annual report on target-date funds. There are encouraging signs that investors use these funds well, and the funds often serve as key lifelines to asset managers' bottom lines. In addition to looking at trends such as these, this year's report examines Morningstar's best practices in evaluating target-date series. This is a summary of the report's key findings.

Source: Morningstar.com, April 2016

Protecting Participants From Themselves: Target-Date Funds and Staying Invested

Abstract: This 12-page paper reviews evidence that volatility may negatively affect participant behavior and consider whether a target-date fund managed to reduce downside volatility may do a better job keeping participants invested so they can better benefit from a market rebound. It also looks at the four risks that target-date funds need to manage.

Source: Blackrock.com, April 2016

Target-Date Fund Selection: Shifting the Focus

Abstract: According to the 2015 MFS DC Investment Trends Study, even if recent market volatility has stirred up distant memories of the last major market downturn, DC plan sponsors and advisors still seem more focused on short-term factors than on longer term benefits when choosing target-date funds.

Source: Mfs.com, March 2016

Target-Date Fund Adoption in 2015

Abstract: In 2015, 48% of Vanguard participants were invested in a professionally managed account option, including 42% who were invested in a single target-date fund. Use of TDFs in DC plans continued to grow. At year-end 2015, 9 in 10 plans offered a TDF, 69% of all participants had a position in the funds, and the funds accounted for nearly half of total plan contributions.

Source: Vanguard.com, March 2016

Study Shows Wide Misuse of Target-Date Funds

Abstract: A new report by Financial Engines looks at why the majority of participants move away from target-date funds over time. It found that investor overconfidence and a desire for greater diversification -- not lack of understanding -- are behind target-date fund misuse.

Source: 401khelpcenter.com, March 2016

Building a Better Process for Target-Date Fund Selection

Abstract: The process of evaluating and assessing these now-critical investment vehicles has lagged behind the rise in their significance as a key component of successful income replacement in retirement. This article describes a straightforward and efficient process a plan sponsor can use to rationally evaluate the quality of the TDF choices available to it.

Source: Segalco.com, February 2016

Infographic: Does Your TDF Stand Up to Scrutiny?

Abstract: This information graphic includes three steps that focus on target-date fund costs, stability, and investor focus in the industry.

Source: Vanguard.com, February 2016

Most Target-Date Fund Investors Not Using All-In Approach

Abstract: Most defined contribution participants fail to use target-date funds properly because they invest in other options as well as the target-date funds, said a research report by Voya Investment Management. Only 15% of target-date users put all of their retirement money in these funds in 2015.

Source: Pionline.com, February 2016

Target-Date Fund Designs and Participant Outcomes

Abstract: Research is designed to help plan sponsors and their advisors better understand how different types of target-date fund designs may lead to dramatically different retirement outcomes, in part from how a particular glide path is likely to respond to various market conditions and in part from how participants are actually interacting with their plans.

Source: Jpmorgan.com, February 2016

Target-Date Funds: The Next Generation, but Not a Silver Bullet

Abstract: Target-date funds are the new normal. Industry data indicates 72% of plan sponsors selected target-date funds as the qualified default investment alternative within in their respective plans. Despite wide-spread utilization, a surprising number of plan participants misunderstand this investment vehicle.

Source: Francisinvco.com, February 2016

Rising Interest Rates: Weighing Risk for TDF Retirees

Abstract: This 11-page paper deals with the question, "How might a rising interest rate environment affect target-date fund investors who rely on their portfolio and other sources of income in retirement?"

Source: Vanguard.com, January 2016

Target-Date Income Funds: A Viable Alternative to Annuities in Retirement Plans

Abstract: Insurance companies are straining at the leash to have lifetime annuities included as investment options in retirement plans. However, in addition to their oftentimes high costs, many annuities have the risk profile of a single stock. A viable alternative to annuities to help plan participants generate sufficient inflation-protected income are target-date retirement income funds (TDiF).

Source: Morningstar.com, January 2016

From the Mind of the TDF Investor

Abstract: This set of brief papers present key findings from Vanguard's target-date fund investor survey, which was designed to uncover investors' expectations and overall understanding of TDF characteristics and risks.

Source: Vanguard.com, December 2015

Why You Monitor Target-Date Funds

Abstract: The DOL has said that a plan fiduciary has the responsibility to prudently monitor the investment options on a plan's lineup, including TDFs. Article reviews the importance of monitoring a TDF.

Source: Principal.com, December 2015

Shaping Returns and Managing Behavior With Target-Date Funds

Abstract: What do you consider the most important component of a target-date fund? Is it the glidepath, asset allocation, investment management style, fees or something else? While those are all critical, of course, there may be a factor you have not considered: How the fund manages participant behavior.

Source: Blackrock.com, November 2015

Custom TDF Allocations Draw 401k Lawsuit

Abstract: Plan fiduciaries have been sued for allegedly breaching their ERISA fiduciary duties in shifting allocations in a plan's custom target-date portfolios to what it characterizes as "risky and high-cost" investments.

Source: Napa-net.org, November 2015

Responsibilities and Options to Consider When Selecting TDFs

Abstract: Employers and plan sponsors have responsibilities and options to consider when selecting TDFs. A key responsibility is to conduct due diligence, perhaps even more than is done for other available funds, precisely because so many participants will make this their sole election. Article outlines some steps plan sponsors should follow when selecting TDFs.

Source: 401khelpcenter.com, November 2015

Cogent Reports: DC Advisors Increasingly Turn to External Managers for Target-Date Funds

Abstract: Proprietary target-date fund offerings are no longer a shoo-in. Nearly half (47%) of all advisors selling defined contribution retirement plans now recommend an external manager for target-date funds rather than the proprietary target-date funds offered by the plan recordkeeper.

Source: Marketstrategies.com, October 2015

Evaluating Target-Date Funds -- A Fiduciary's Guide

Abstract: This guide is focused on the practical steps to take during the evaluation process -- which may include comparison and selection of TDFs, understanding their underlying investments, reviewing fees, developing communications, and documenting the process. It provides a checklist for periodic reviews, key questions to ask when following the DOL guidelines, and items to consider.

Source: Vanguard.com, September 2015

2015 PLANSPONSOR TDF Buyer's Guide

Abstract: Two significant themes can be inferred from this year's data for the 2015 PLANSPONSOR Target-Date Fund Buyer's Guide: 1) Asset managers are deeply committed to target-date fund solutions, and 2) in their evolution, target-date fund solutions have moved far past any predicted 2.0 stage.

Source: Plansponsor.com, September 2015

Pros and Cons of Using Target-Date Funds in Your 401k

Abstract: With over $741 billion in assets, target-date funds are the most popular investment choice in 401k plans and IRAs, according to the Investment Company Institute. But what exactly are TDFs, and why have they become so popular? An equally important question is, are TDFs the best investment choice to include in your 401k?

Source: Intuit.com, September 2015

Custom Target-Date Fund Perspective

Abstract: Target-date fund selection and monitoring is becoming more important as the assets held in these funds grow. Fiduciaries must move beyond industry chatter when addressing their participants' outcomes. Armed with an understanding of a plan's demographics, fiduciaries will be in a better position to determine how well a prospective TDF provider's glide path assumptions align with their plan's needs.

Source: Manning-Napier.com, August 2015

Target-Date Funds: How to Monitor And Communicate These Black Boxes Needs Rethinking

Abstract: Is there an objective way to select and monitor target-date funds and then realistically communicate how to use them to 401k investors? After the Supreme Court’s decision in Tibble v. Edison, 401k fiduciaries and their advisors must take this question seriously, even though Congress sanctioned the use of TDFs as qualified default investment alternatives.

Source: Investmenthorizons.com, June 2015

Prudent Target-Date Fund Decisions for Fiduciaries

Abstract: The objective of a target-date fund should be to preserve a plan participant's savings, rather than to boost their value by taking on too much risk. The benefits of TDFs are diversification and risk control, preferably at a reasonable price, so trustees should base their TDF selection on the basis of more than just one or two criteria.

Source: Targetdatesolutions.com, June 2015

Impact of Tibble Ruling on Target-Date Monitoring

Abstract: All 401k fiduciaries should be asking themselves a question now that the U.S. Supreme Court's Tibble decision has made it perfectly clear that no investment option, regardless of how prudently it was chosen, can be set on autopilot and forgotten. The question therefore is how should target-date funds be monitored?

Source: Investmenthorizons.com, June 2015

Comparing Target-Risk and Target-Date Solutions

Abstract: Even with the option to be more conservative or aggressive, most participants still stick to a moderate glide path. Similar to the shift from defined benefit to defined contribution plans, many in the retirement industry have been moving from target-risk to target-date funds. This reflects the trend toward automation as an answer to participant inertia, but are plan sponsors moving in the right direction?

Source: Planadviser.com, June 2015

Time for Target-Date 2.0

Abstract: Target-date funds have seen tremendous asset growth in recent years, but their investment design hasn't kept pace with available innovations. Article reviews what the next-generation of target-date funds might look like.

Source: Abglobal.com, May 2015

Considering and Evaluating Target-Date Glide Paths

Abstract: The majority of U.S. workers will look to their DC plan to replace 30% or more of their pre-retirement income. The likelihood of achieving this goal should be the measure by which plan fiduciaries select and evaluate QDIAs. The Objective-Aligned Glide Path has the potential to improve the probability of a participant having the real retirement income they need.

Source: Pimco.com, May 2015

Latest Trends in Target-Date Funds

Abstract: Brightscope announced recent findings in target-date funds as a result of their examination of the lowest cost institutional share class for all target-date funds through February 2015. This includes 59 target-date series, composed of 561 distinct target-date funds from 40 different asset managers.

Source: Brightscope.com, May 2015

Plan Sponsors Get Serious About TDF Selection

Abstract: As target-date fund assets continue to skyrocket and as more 401k plans adopt auto-enrollment, plan sponsors are taking a taking a more measured approach to choosing the TDFs for their plans.

Source: Benefitnews.com, May 2015

Target Date Solutions Comments on DOL's Fiduciary Standard

Abstract: Target Date Solutions submitted this comment letter to the Department of Labor regarding its proposed fiduciary standard, with specific attention to target date funds.

Source: Targetdatesolutions.com, April 2015

Custom TDFs: When to Use Them and Why

Abstract: Custom TDFs are starting to become popular in larger DC plans. But do they make sense for plans with less than $1 billion? According to a report by consultants at Rocaton, the answer is yes, but only in certain circumstances.

Source: Napa-net.org, April 2015

Custom Target-Date Options: A Higher Hurdle

Abstract: Given the high utilization of target-date options in defined contribution plans, target-date options are receiving ever greater scrutiny. As such, custom target-date options are becoming a more popular discussion topic. While there are many factors that could lead a plan sponsor to seriously consider custom target-date options, this nine page paper outlines a few key considerations when considering custom target-date solutions.

Source: Rocaton.com, April 2015

Documenting a TDF Selection Process Is Key

Abstract: The top factor for plan sponsors to have in place is a process to support the decision-making process of evaluating and choosing a target-date fund. Plan fiduciaries need a complete grasp of the vulnerabilities of their target-date strategies, and sources recommend tools and a documented process.

Source: Planadviser.com, April 2015

The Unintended Consequences of Prioritizing One Risk in Target-Date Design

Abstract: Learn more about the risk/reward tradeoffs that come when a target-date manager focuses on one specific risk rather than managing risk dynamically.

Source: Jpmorganfunds.com, April 2015

Target-Date Fund Costs Continue Decline

Abstract: Target-date fund expense ratios continued their steady decline, falling to 78 basis points in 2014 on an asset-weighted basis vs. 84 basis points in 2013, according to the latest annual survey of target-date funds published by Morningstar.

Source: Investmentnews.com (free registration may be required), April 2015

Target-Date Fund Adoption in 2014

Abstract: In 2014, the use of target-date funds in DC plans continued to grow rapidly. At the end of last year, 88% of plans offered a TDF, 64% of all participants were invested in the funds, and the funds accounted for 41% of total plan contributions. In this eight page paper you'll get the latest statistics on TDFs.

Source: Vanguard.com, April 2015

Rethinking Target-Date Fund Design: Managing Participant Risk

Abstract: This paper offers a thorough understanding of the research and philosophy behind Prudential's Day One target-date funds, which were created to address retirement risks all people face, with a particular focus on longevity risk.

Source: Pionline.com (registration may be required), April 2015

Examining Risk Management in TDFs

Abstract: One long-time portfolio designer says addressing risk in TDFs is a bit like playing a game of whack-a-mole: Focusing too much on one risk lets the others run rampant.

Source: Plansponsor.com, March 2015

Webinar: A Guide to Target-Date Fund Selection and Monitoring

Abstract: In order for a plan sponsor to meet their fiduciary obligations to prudently select and monitor their target-date funds, a thorough analysis is necessary because of the underlying complexity of these products and their unique structure relative to the traditional "core" investment options that defined contribution sponsors are used to evaluating. In this program, Scott Cameron, CFA, presents a framework for a sound fiduciary evaluation of a target-date series

Source: Youtu.be, February 2015

Why Target-Date Funds Are Winning

Abstract: Target-date funds are winning. With roughly $700 billion in assets, most of it in 401k plans, they have truly become a category killer. But, why are they winning?

Source: Brightscope.com, February 2015

Target-Date Funds in the Customization Crosshairs

Abstract: Target-date funds continue to trump other options plan sponsors have to sign up participants in 401k plans. But in 2014, companies took a hard look at the type of target-date fund they offered and made dramatic changes.

Source: Workforce.com (free registration may be required), February 2015

Are Target-Date Funds a Ticking Time Bomb?

Abstract: SEC Commissioner Luis Aguilar believes target-date funds should be given the same treatment as cigarettes, they both should come with dire warning labels. Aguilar feels "The relentless growth in target-date funds is troubling because studies have shown that investors, and industry professionals alike, do not fully appreciate the risks these funds present."

Source: Fiduciarynews.com, February 2015

Evaluating Target-Date Funds in DC Plans

Abstract: When selecting a target-date fund, there is no right or wrong answer, but there is likely an appropriate fit for your plan. This paper explores the issues that plan fiduciaries will need to consider when adding or re-evaluating target-date funds for their defined contribution plans.

Source: Pnc.com, February 2015

Video: How Target-Date Funds Help Manage Inflation

Abstract: Worried that inflation might spend your retirement money before you do? Learn how target-date funds can help manage inflation risk.

Source: Blackrock.com, February 2015

Custom Target-Date Funds Gaining in DC Plans

Abstract: Defined contribution plans are sharply cutting back on target-date funds offered by recordkeepers and also expanding use of custom target-date funds, according to a survey by Callan Associates.

Source: Pionline.com, January 2015

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