May 23, 2013

Employee Benefits Security Administration Issues a Fact Sheet for ERISA Fiduciaries on Selecting Target-date Retirement Funds

The Employee Benefits Security Administration (EBSA) recently issued new guidance in the form of a fact sheet covering the basics of target-date funds and tips for selecting target-date retirement funds (TDFs).

The guidance offered by EBSA is intended to assist ERISA fiduciaries and plan sponsors who are considering offering target-date funds and are perhaps unfamiliar with the products. The fact sheet explains how TDFs work, including the difference between “to” and “through” glide path constructions. EBSA encourages plan sponsors to establish clear processes for the selection and ongoing review of TDFs and discusses some of the issues fiduciaries need to consider, such as the fee structure and employee communication.

While plan sponsors who are familiar with TDFs are not likely to find anything surprising about EBSA’s straightforward guidance, it is worth reviewing the brief, three-page fact sheet to become familiar with EBSA’s recommendations.

To read the fact sheet, visit