NAIRPA Comments on SEC Target-Date Fund Proposal

In a letter to the Securities and Exchange Commission (SEC), the National Association of Independent Retirement Plan Advisors (NAIRPA) calls for “focused disclosure” of target-date funds and said that a summary disclosure may not be enough.  

The statement from Brian H. Graff, executive director and CEO of NAIRPA and its’ affiliate organization, the American Society of Pension Professionals & Actuaries (ASPPA), says that a more focused disclosure is necessary because: “Essentially one size does not fit all when it comes to disclosure of the risk, volatility, age horizon, asset allocation or glide path of TDFs.”  The statement was in response to a proposal by the SEC enhancing the disclosures made by target-date funds (see “SEC Releases Target-Date Fund Disclosure Proposal“)

NAIRPA would like to see disclosures divided into three groups: 1) the plan sponsor or fiduciary 2) the active participant, and 3) the default participant.  The specific needs of these groups are outlined in its letter to the SEC (see NAIRPA’s official comments here).   

“While we applaud the SEC’s proposal for summary disclosure of the asset allocation at or near the name of the fund, we submit that there is other information that is equally important,” said Graff in the letter.