Compliance March 4, 2013
EBSA Offers Tips for Selecting TDFs
The Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA) prepared general guidance to assist plan fiduciaries in selecting and monitoring target-date funds (TDFs).
Reported by Rebecca Moore
The document says the guidance can also be used for other investment options in participant-directed individual account plans. The guidance includes a review of TDF basics.
In the guidance, the EBSA suggest fiduciaries:
- Establish a process for comparing and selecting TDFs;
- Establish a process for the periodic review of selected TDFs;
- Understand the fund’s investments—the allocation in different asset classes (stocks, bonds, cash), individual investments and how these will change over time;
- Review the fund’s fees and investment expenses;
- Inquire about whether a custom or nonproprietary target-date fund would be a better fit for the plan; and
- Develop effective employee communications.
The EBSA guidance is at http://www.dol.gov/ebsa/pdf/fsTDF.pdf.
You Might Also Like:
DOL Issues Final Retirement Security Rule
The much-anticipated fiduciary rule brings retirement plan advisement, one-time rollovers and annuity recommendations under ERISA.
Su Defends DOL Budget Request at House Hearing
The pending retirement security proposal was not a focus, and only one Congressman asked about it.
DOL Asks Plan Administrators to Provide Participant Data for Lost and Found
The missing participant database requires plans to voluntarily turn over participant data to the DOL.