EBSA Ready for Public Comment on TDF Disclosue

The proposal, EBSA adds, includes more specific disclosure requirements for TDFs, based on evidence that plan participants and beneficiaries would benefit from additional information concerning these investments.

The proposal would specifically require an explanation of the TDF’s asset allocation, how the asset allocation will change over time and the point in time when the TDF will reach its most conservative asset allocation. The proposal would also require a chart, table or other graphical representation that illustrates the change in asset allocation.

The EBSA notice adds that the proposal would additionally require, among other things, information about the relevance of the TDF’s target date, assumptions about participants’ and beneficiaries’ contribution and withdrawal intentions following the target date; a statement that TDFs do no guarantee adequate retirement income; and indicate that participants and beneficiaries may lose money by investing in the TDF, including losses near and following retirement.