February 23, 2009

Senate seeks new target-date funds rules; Committee on Aging to hold special Webcast

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.

Reprints Discuss this story
This is where the comments go.