The new Target Retirement Funds from Vanguard (see Vanguard Launches Target Retirement Fund of Funds Offerings ) allow participants to choose from portfolios that readjust a diversified investment mix as participants approach their retirement date. Transamerica is one of the first retirement plan providers to offer the new Target Retirement Funds from Vanguard in a retirement plan platform, according to the firm.
The six funds are designed to serve as a participant’s primary retirement investment. Participants select a fund based on their target retirement date. The funds grow more conservative over time on a gradual, predetermined schedule.
Each of the Target Retirement Funds invests their assets in three to five broadly diversified Vanguard funds. These core investments are index funds that seek to track the performance of the broad US and international equity markets, as well as the bond market. As investors near the target retirement dates, the funds also incorporate inflation protected securities (eventually comprising 25% of the total investments) to help mitigate the negative impact of inflation.
Transamerica also introduced five investment options from American Century Investments, the first time funds from this underlying mutual fund company have been offered in a Transamerica product, along with additional investment options accessing underlying mutual fund companies such as AIM Investments, Neuberger Berman, Franklin Templeton Investments, and SSgA.