LABOR DEPARTMENT: Target date fund reform proposal

Regulators are still considering whether to adopt proposed rules that would require more disclosure of target date investments,…

Regulators are still considering whether to adopt proposed rules that would require more disclosure of target date investments, which reset their asset allocations over time. The Labor Department rules would require new disclosures about target date funds, which swelled to more than $270 billion by the end of 2010 after the agency designated them a qualified default investment. Using a QDI, employers are protected from liability when investing a worker’s contributions in a target date fund if that employee hasn’t designated another investment choice. The rules would require added explanations of the investment’s asset allocation, how the allocations would change over time and the significance of the target date itself. For more details on the proposal, click here. For a related story, click here.