The document says the guidance can also be used for other investment options in participant-directed individual account plans. The guidance includes a review of TDF basics.
In the guidance, the EBSA suggest fiduciaries:
- Establish a process for comparing and selecting TDFs;
- Establish a process for the periodic review of selected TDFs;
- Understand the fund’s investments—the allocation in different asset classes (stocks, bonds, cash), individual investments and how these will change over time;
- Review the fund’s fees and investment expenses;
- Inquire about whether a custom or nonproprietary target-date fund would be a better fit for the plan; and
- Develop effective employee communications.
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