Summary Box: New disclosures proposed for target-date retirement funds following criticism
By APWednesday, June 16, 2010
Summary Box: Rules floated for target-date funds
NEW RULES FOR TARGET-DATE FUNDS: Federal regulators have proposed new disclosure rules for target-date retirement funds that would require sponsors to spell out how they are splitting the money among stocks, bonds, cash and other investments, and to warn about risks.
A POPULAR INVESTMENT: Target-date funds, pegged to a person’s expected retirement year, are an increasingly popular way to invest in 401(k) accounts. They shift to a more conservative mix of assets as the target retirement date approaches.
CRITICISM: Target-date funds drew criticism in the market meltdown of 2008 for wide variations in their returns, and excessive risks and high fees for some funds.
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