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December 01, 2010 at 10:55 AM
The Department of Labor’s Employee Benefits Security Administration (EBSA) has released its proposed rule on ways to help workers better understand targe-date funds.
EBSA says that the proposed rule would amend the “qualified default investment alternative (QDIA) regulation” and the “participant-level disclosure regulation” to provide more specifics to participants and beneficiaries about investments in target-date funds. Comments on the proposal are due to EBSA by Jan. 14.
Patrick Cunningham (left), CEO of Manning & Napier Advisors, welcomes the EBSA's proposed rule and applauds the rule's requirement that fund companies provide their glide path, which is the asset allocation mix of a fund based on the number of years to the target date. Also, under the proposal, "plan sponosrs and their advisors and consultants will have a much better understanding of at what piont does [the fund] get to its most conservative positioning; fund providers had such different ways of approaching it."
Phyllis Borzi (left), assistant Secretary of Labor for EBSA, said in a statement that based on EBSA’s collaborative examination with the Securities and Exchange Commission (SEC), “it is clear that all participants in participant-directed individual account plans can benefit from better information about how target date investments are designed to meet their retirement savings needs.”