Target Date Retirement Fund Hearings

Chris Horymski from the Consumer Reports Blog has a post up describing last weeks' SEC/DOL hearings into Target Date Retirement Funds. It's worth a read.

"The ideas presented ranged from the conventional to novel. Many panelists warned against constraining how TDFs invest. As Edward Moslander of retirement giant TIAA-CREF noted, “there is no right or perfect glide path.” (Glide path is industry’s jargon for shifting the investment mix of a TDF over the life of the fund.) Some participants suggested that a partial annuitization of lifecycle funds would help protect savers from financial tsumanis like 2008.

Others had issues with the way TDFs are labeled. For instance, it’s often unclear to the investor if the plan is designed for saving up “to” retirement, or “throughout” retirement. Also, some felt that employing a calendar year in the name of the TDF–as in a 2020 fund, designed for folks expecting to retire in 2020–is misleading, as Fund A’s 2020 fund may be much more aggressive than the 2020 fund from Fund B."