Industry Groups Say Target Date Proposal Slightly Off the Mark

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Industry Groups Say Target Date Proposal Slightly Off the Mark

Jan 17, 2011

CFP Board noted that a proposal on target date fund disclosure from the Securities and Exchange Commission goes "somewhat further" [than the Department of Labor proposal] in required disclosures of target date funds' asset allocation — and suggested that the DOL do the same. The SEC's proposal, which was pitched last summer, would mandate that a target date fund provider disclose the underlying asset classes in which the fund were invested.

The CFP [B]oard also suggested that plan fiduciaries should be required to disclose the fund's asset allocation at the target date and indicate when the fund's asset allocation will become fixed. "Many investors and plan participants do not understand that some target date funds are designed to re-balance 'through' the target date and that the asset mix will therefore continue to change after the target date and during the participant's expected period of retirement," the CFP Board noted in its letter. Read more >

Investment News
Darla Mercado
January 17, 2011
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