• A recent MFS survey of DC plan sponsors and advisors shows that performance is the most important criterion used to select target date funds. Factors that have a significant impact on performance, such as expenses, risk management and glide path design, are also cited as important criteria.
• Plan sponsors and advisors have a high degree of confidence in the ability of target date funds to meet participant needs, but there are also concerns regarding risks that could undermine participant success. Risks cited include volatility, as well as interest rate risk and liquidity risk.
• Survey respondents also report concerns about benchmarking performance and managing risks.
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