Participants and sponsors continued to take advantage of target-date funds' built-in, professionally managed capabilities in the first half of 2015, even as global stock markets slowed from the feverishly hot returns seen over the past several years.
The funds' continued growth is largely attributed to sponsors' growing familiarity with TDFs, and their comfort as fiduciaries with the qualified default products.
Also, sponsors are using re-enrollment periods more often to communicate TDFs' value proposition to plan participants, who often can be allocated dangerously, with too much or too little risk. That's the type of uninformed retirement saving lawmakers hoped to address with the Pension Protection Act of 2006, which paved the way for TDFs' meteoric growth.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
