Tag: target-date funds

The lawsuit argues that while the TDFs in the plan are CITs, they are private label CITs with much higher expense ratios than the typical CITs offered by JPMorgan.

Citing previous court decisions, a judge said dismissal is not proper at this early stage and the plaintiffs lack the information to detail their claims until discovery proceeds.

The reason why target-risk funds gave way to target-date funds is the perceived simplicity of just using one’s retirement date to set the portfolio's investment risk tolerance—but this approach doesn’t work optimally for all participants.

Investors continue to favor fixed income, the Alight Solutions 401(k) Index finds.

PIMCO says that rather than go with an all-actively managed target-date fund (TDF) or an all-passively managed TDF, a mix of the two makes sense—and that there is particular logic to assigning the fixed income portion of the portfolio to active management due to outperformance.

Jason Shapiro notes that some DC plan participants may stay in their plan after retirement and rely on TDFs’ asset allocation for retirement income for possibly 30 years or even more.

The research paper not only illustrates potential return characteristics and diversification benefits, but also offers allocation strategies to guide investment decision making.

The Securities and Exchange Commission’s (SEC)’s Office of Compliance Inspections and Examinations found some concerns related to money market funds and target-date funds.

Experts say this has never been more important, with TDFs projected to hold more than half of all retirement plan assets by 2025.

The largest funds tend to have the highest ratings from objective third parties, while the smallest funds generally fail to receive positive marks.

Willis Towers Watson’s Thinking Ahead Institute says defined contribution plan designs and communications will leverage technology to deliver a far more customized experience for participants.

Participants who mix target-date funds (TDFs) with other investments appear to be more sophisticated, but "it can diminish (or eliminate) the target-date fund’s potential benefit,” says David Blanchett, head of Retirement Research at Morningstar Investment Management LLC.

The lawsuit accuses the retirement plan committee of CHS/Community Health Systems, Inc. Retirement Savings Plan and Principal defendants of imprudent management of the plan and its investments.