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Secretary of Labor Thomas E. Perez
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News Release

EBSA News Release: [11/29/2010]
Contact Name: Gloria Della
Phone Number: (202) 693-8666
Release Number: 10-1658-NAT

US Labor Department proposes rule to enhance target date retirement fund disclosures

WASHINGTON — The U.S. Department of Labor's Employee Benefits Security Administration today announced a proposed rule that will help America's workers better understand target date retirement funds and other similar investments offered in 401(k)-type pension plans. The proposed rule would amend the "qualified default investment alternative regulation" and the "participant-level disclosure regulation" to enhance and provide more specificity regarding the information that must be disclosed to participants and beneficiaries concerning investments in target date funds.

"Based on our collaborative examination of this issue with the Securities and Exchange Commission, 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," said Assistant Secretary of Labor for EBSA Phyllis C. Borzi.

The proposed amendments require new disclosures about the design and operation of target date or similar investments, including an explanation of:

  • The investment's asset allocation.
  • How that allocation will change over time, with a graphic illustration.
  • The significance of the investment's "target" date.

The proposed amendments also require a statement concerning the risk that a participant investing in a TDF may lose money in that investment, even close to retirement.

Comments on the proposed regulation should be directed to the U.S. Department of Labor, Employee Benefits Security Administration, Room N-5655, 200 Constitution Ave. NW, Washington, DC 20210, Attention: TDF Amendments; or electronically to e-ORI@dol.gov or at http://www.regulations.gov. Comments must be received by Jan. 14, 2011.

The proposed regulation is to be published in the Nov. 30 edition of the Federal Register. For a copy, visit http://www.dol.gov/ebsa.