Regulatory Update: Regulation of Target-Date Funds - A Look Back and A Look Ahead

Reprinted with permission from Employee Benefit Plan Review, December 2010.

Since the Department of Labor finalized the “qualified default investment alternative” regulations in 2007, the market has seen a dramatic growth in assets allocated to so-called “target-date” or “life cycle” funds. Along with the growth in assets in these funds has come a growth in regulatory interest, particularly in the wake of the market turbulence over the last few years. This column provides a brief background on target-date funds, surveys regulatory interest in target-date funds over the past few years, summarizes expected new regulatory initiatives and closes with suggestions for plan fiduciaries with target-date funds.