A Vanguard news release said at the end of 2008, seven in ten such plans offered a target-date fund, and more than one-third of participants opted for them.
The report notes that three factors were fueling the adoption of target-date funds by plan sponsors and participants:
- the funds’ simplified approach to investment decisionmaking;
- the growing use of automatic enrollment within plans; and
- target-date funds’ designation as a qualified default investment option under the Pension Protection Act of 2006.
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