A new Milliman Benefits Perspective article goes deeper into the details of target-date funds (TDFs) and considerations for plan sponsors, which we looked at in a previous blog entry.
Some of the issues addressed in the article:
- Growth in TDFs, especially in retirement plans, can in part be attributed to the qualified default investment alternatives (QDIAs) regulations released in 2006 and 2007.
- In 2008 and 2009, many TDFs decline in value significantly, even though they were close to or at their target dates.
- More on the “To versus Through” difference between funds.
- Some considerations for sponsors as they include TDFs in their plans: required disclosures, communications, and ongoing benchmarking.
You can find the article in the October edition of the Milliman Benefits Perspectives.