A Vanguard news release said at the end of 2008, seven in 10 such plans offered a target-date fund, and more than one-third of participants opted for them.
The report notes that three factors were fueling the adoption of target-date funds by plan sponsors and participants:
- the funds’ simplified approach to investment decisionmaking;
- the growing use of automatic enrollment within plans;
- target-date funds’ designation as a qualified default investment option under the Pension Protection Act of 2006.