Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Tuesday, February 9, 2010

Target Date Funds: Pro or Con?

Regarding the ongoing debate over target date funds:  Apparently the Investment Company Institute has prepared a paper called "Dispelling Target Date Fund Myths with the Facts."  I say "apparently" because I cannot find it on the ICI website.  The BrightScope Blog offers a response to the ICI's paper called"Real Facts About Target Date Funds", which I could find.  BrightScope offers this Note:

Notes: It is important to note that the authors are generally supportive of the growth of target date funds. It is our belief that they hold great promise for the generation of American workers who will be dependent upon defined contributions plans for their retirement income security. But, if these instruments are to be the “number one savings vehicle in America” we think they should be held to a very high standard of quality. Like any new investment instrument they are not without their flaws, but it is up to market participants and the regulators to ensure that the funds, their regulation, and their disclosure are aligned in the best interests of American workers. BrightScope’s general views in the white paper are not shared unanimously by Target Date Analytics and Matthew Hutcheson.

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