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Target Date Fund Consulting

One Size Does Not Fit All...

Target Date Funds are one of the most widely used investment options in defined contribution plans, with $2 trillion in total assets as of 20193. Approximately 88% of new contributions flow to Target Date Funds, and they represent 34.6% of total 401(k) assets by 20192. Due to the proliferation of Target Date Funds, the selection of these funds for your plan can play a crucial role.

In response to the growing popularity of Target Date Funds (TDFs) and a general lack of understanding on the part of fiduciaries, the Department of Labor issued specific guidance regarding TDF selection and monitoring. The Department of Labor offered the following tips in regards to selecting Target Date Funds (to read in full please click here):

  • Align TDF and participant characteristics
  • Understand underlying investments
  • Review fees and investment expenses
  • Develop effective employee communications
  • Document the process

We will consult with Plan Sponsors and Investment Committee members to help find the Target Date Fund that is most suitable for your specific plan.

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