DOL Issues Fact Sheet on Target Date Funds in 401(k) Plans
The DOL issued an informal fact sheet entitled “Target Date Retirement Funds – Tips for ERISA Plan Fiduciaries.” The fact sheet provides an outline of items that sponsors of 401(k) plans (and other employee self-directed plans that provide target date funds as an investment option) should consider when selecting and reviewing target date funds as an investment option for participants. Target date funds are quickly becoming the predominant investment option in most defined contribution plans. As a result, for the last few years the DOL has said that it intends to eventually regulate these funds in some way. But the DOL has not yet issued any regulations or other formal guidance. Because this fact sheet is the best piece of guidance currently available on this issue, plan sponsors should strongly consider reviewing and following its advice.