Hearing on target date funds will focus on disclosure

The Securities and Exchange Commission and the Department of Labor will hold a joint hearing June 18 on the subject of target date funds.
MAY 22, 2009
The Securities and Exchange Commission and the Department of Labor will hold a joint hearing June 18 on the subject of target date funds. Target date funds, which are supposed to allocate investments based on investors’ age and risk tolerance, have come under attack for having widely varying investment strategies even when intended for investors retiring at the same time. Government regulators are considering new regulations to provide better disclosures to investors. “Target date funds are an increasingly popular investment for Americans focused on retirement planning,” SEC Chairman Mary Schapiro said in a statement. “If there’s any confusion or misunderstanding caused by these funds, then we need to clear that up.” The hearing will examine how target date fund managers determine asset allocations and changes to the allocations, how they select and monitor investments, how risks are disclosed and factors for comparing target date funds. The agencies are accepting requests to participate in the hearing at the Labor Department headquarters in Washington.

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