Get access to the exclusive HR Resources you need to succeed in 2018!
Training, policies and tools to help HR prevent and respond to harassment claims.
Is your employee handbook keeping up with the changing world of work? With SHRM's Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Build competencies, establish credibility and advance your career—while earning PDCs—at SHRM Seminars in 12 cities across the U.S. this spring.
#SHRM18 will expand your perspective – on your organization, on your career, and on the way you approach HR. Join us in Chicago June 17-20, 2018
Factors for plan fiduciaries to weigh when selecting among target-date funds
A newly released
white paper by the nonprofit Defined Contribution Institutional Investment Association supplements a 2013 Department of Labor (DOL)
fact sheet on evaluating and selecting target-date funds (TDFs) used in 401(k) or other defined contribution plans.
“A good starting point for plan fiduciaries when reviewing TDFs is to note that, while there are many variations among these funds, generally, they all seek to offer diversification among asset classes, provide professional fund asset management and reduce exposure to equities as participants near retirement age,” said association Executive Director Lew Minsky.
These features, as well as the fiduciary protections available when one of these funds is offered as the plan’s qualified default investment alternative (QDIA), may make a TDF a prudent choice for both plan fiduciaries and plan participants. As an alternative to a TDF, however, some plan sponsors may choose another type of QDIA, such as a managed account or a balanced fund.
Considerations to Weigh
There are many differences among TDFs that plan fiduciaries should consider when deciding whether to incorporate this type of fund into an investment lineup, the white paper notes, including the following:
Plan fiduciaries should consider these factors when determining which, if any, TDF would work best for their plan. Adhering to a selection process and documenting the decision are critical.
Related External Article
Related SHRM Articles
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Your session has expired. Please log in again before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Save $450 off onsite member rates when you register by 2/2
SHRM’s HR Vendor Directory contains over 3,200 companies