Department of Labor Proposed Regulation for Target Date Fund Disclosure
On January 14, 2011, CFP Board submitted a comment letter to the Department of Labor (DOL) regarding proposed regulations regarding target date fund disclosure. In its letter, CFP Board commended the DOL for taking steps to provide plan participants with better information regarding target date funds. While CFP Board generally supports the adoption of the DOL's proposed regulations, it expressed concerns that the proposed regulations do not go far enough to address the concern that plan participants do not sufficiently understand the extent to which many target-date funds are managed in ways different than what may be expected. To that end, CFP Board recommended the DOL incorporate concepts from the Securities and Exchange Commission's rulemaking into the final rule.
Additionally, CFP Board recommended that the DOL require clear and prominent disclosures that will alert investors when a target date fund's equity allocation differs materially from the average allocation of peer funds with the same target date at the target date, at the landing point, and during the five-year periods immediately preceding those dates.
Read CFP Board’s letter (PDF, 93KB)