In the past year, plan sponsors and advisors have seen many retirement plan participants riding an economic rollercoaster, with some employees having to borrow from their 401(k)s, and others postponing dreams of retiring. How can plan sponsors and advisors help participants achieve their goal of having a secure retirement? One common strategy is the use of target-date funds, and their associated glidepaths. Where do we currently stand with TDFs and how do they fit in with a future we all know, after last year, can change in an instant?

"From the perspective of the plan sponsor and the participant, there is a common misconception that all glide paths are the same, and therefore all TDFs are the same," says John Ruth, cofounder and CEO of Build Asset Management, an asset management firm specializing in strategies focused on fixed income and options. "However, there's nothing in the statute that requires 10 TDFs in a family of TDFs, or that they have to be created around a five-year chassis. Conversely, not all funds with the same date in their name are equal—in fact, that is seldom the case. Educating the consumer on these differences and concerns is important—their voice will allow a plan sponsor to ask intelligent questions and try to find the right mix for their employees."