Employers should look carefully at mutual funds designed for retirement plan participants who are set to retire in a specific year.

In theory, managers of “target date” funds are supposed to shift toward more conservative asset allocations as participants get closer to their anticipated retirement dates, but some of the managers seem to keep high percentages of stock in the portfolios even when participants are getting ready to retire, according to retirement plan consultants at Watson Wyatt Worldwide, Washington.

Traditionally, the rule of thumb has been that investors could decide what percentage of their assets to invest in stock by subtracting their age from 100.

In the real world in 2006, stock allocations in funds aimed at employees about 10 years from retirement varied from 40% to 80%, according to Watson Wyatt consultants.

Allocations in target-date funds aimed at employees who were about to retire ranged from 20% to 65%, the consultants found.

“The lack of consistent philosophies in this area means that products with very similar names can have very different compositions,” says Robyn Credico, national director of Watson Wyatt’s defined contribution practice.