The Senate's Special Committee on Aging is expected to ask the Department of Labor today to establish regulations on the composition and advertising of target-date retirement funds, according to The Washington Post.
Target-date funds have increased in popularity as they eliminate the need to actively manage a 401(k), according to the Post, which cites statistics from consulting firm Greenwich Associates that plan sponsors using target-date funds jumped to 53 percent last year from 35 percent the year before. However, Dean Baker, co-director of the Center for Economic and Policy Research, tells the Post these funds "give people a sense of security that probably isn't warranted. They still can be taking on a lot of risk."
"Even though the funds were designed to limit aging workers' exposure to stocks, some are still invested heavily in the markets as a worker approaches retirement," writes Ylan Q. Mui for the Post.
The Senate Special Committee on Aging will discuss target-date funds along with other topics affecting boomer retirement in the volatile economy during a special hearing at 10:30 EST Wednesday morning entitled "Boomer Bust? Securing Retirement in a Volatile Economy."
To view a live Webcast of the hearing, click here.