This Month Only! >> $20 off and a FREE SHRM tote with your membership and code TOTE2018!
Sign up for free email newsletters and get more SHRM content delivered to your inbox.
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
Members may download one copy of our sample forms and templates for your personal use within your organization. Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organization’s culture, industry, and practices. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRM’s permission. To request permission for specific items, click on the “reuse permissions” button on the page where you find the item.
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.
Please sign in as a SHRM member before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
CA Resources at Your Fingertips
SHRM’s HR Vendor Directory contains over 10,000 companies