Target date funds and fiduciary duty – Examine your TDFs’ glide paths to ensure suitability
Abstract: Retirement plan fiduciaries generally are absolved from liability with respect to plan participants' selection of investments in plans that offer multiple investment choices with various levels of risk. This includes target date funds (TDFs). Fiduciaries' duties with respect to TDFs were fine-tuned under the Pension Protection Act. This article discusses TDF basics and why fiduciaries must still act prudently in selecting them. A sidebar cites a study showing that a disappointingly high number of plan participants - especially among baby boomers - are not managing their accounts, either by themselves or through third parties.