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Forum Files Comments with DOL on Target Date Proposals

On Friday, January 14, 2011, the Forum filed its comment letter on the Department of Labor's proposed rulemaking that would expand target date fund disclosures to retirement plan participants.  Similar to the rules the SEC recently proposed to expand disclosure in target date marketing materials, these DOL proposals would help clarify the shifting asset allocation within particular target date funds and improve the information provided when these funds are offered as investment options in retirement plans.  These proposed amendments would expand disclosures about the design and operation of target date funds, and similar investment vehicles.  In particular, the proposed amendments would require explanations of:

  • The investment's asset allocation.
  • How that allocation will change over time, with a graphic illustration.
  • The significance of the investment's "target" date.

The proposed amendments also require a statement concerning the risk that a participant investing in a target date fund may lose money in that investment, even close to retirement.

The Forum's comment letter to the DOL takes the same position the Forum did on the SEC rule proposal.  This letter also encourages the DOL to continue to mirror SEC disclosure requirements, and not craft a new or different disclosure regime.

The full text of the Forum's comment letter is available here.