Maine RIA Issues eBook on TDF Best Practices

A new ebook discusses best practices for evaluating and selecting a TDF series for defined contribution plans. 



Guidance Point Retirement Services, a registered investment adviser based in Portland, Maine, has issued “Navigating the Target-Date Fund Evaluation Process,” an e-book for defined contribution (DC) plan sponsors containing best practices for evaluating and selecting a target-date fund (TDF) series for their participants. The book uses tips and information gleaned from the Department of Labor’s (DOLs) “Target-Date Retirement Funds – Tips for ERISA Plan Fiduciaries.” 

Benjamin Smith, Guidance Point’s principal and chief investment officer, notes that TDFs have become extremely popular with participants as well as plan sponsors. This high implementation rate means plan sponsors should be especially diligent when reviewing the options, Smith cautions.

Guidance Point’s eBook suggests a process for plan sponsors to comply fully with the DOL publication. Topics include: Understanding the core attributes of the TDF suite; analyzing the glide path and investments; and determining the best option for a plan.

The book emphasizes the critical steps for fiduciaries to keep in mind when selecting and monitoring TDFs:

  • Establish a process for comparing, selecting, and periodically reviewing the TDFs;
  • Understand the asset allocations, glide paths and expenses of the funds and compare them to other TDF strategies;
  • Factor in participant demographics, participation, salary levels, turnover rates, contribution rates and withdrawal patterns;
  • Inquire whether a custom or non-proprietary TDF would be a better fit;
  • Develop effective employee communications; and
  • Make sure to document the process.

The ebook is available for free download on Guidance Point’s website.