The Department of Labor and the SEC are working on a joint consumer alert about the way target-date funds work in retirement plans, according to a person familiar with the situation.
Separately, the Labor Department is planning to issue its own target-date fund guidance for retirement plan fiduciaries. In the long term, the agency is still discussing issuing regulations about what kind of disclosure target-date fund managers need to provide to retirement plan participants, the source said.
The Labor/SEC joint investor alert will center on what consumers need to know about target-date funds, said the source, who declined to be identified. Meanwhile, the Labor Department’s plan fiduciary guidance will focus on the issues plan fiduciaries should consider before adding target-date funds to their plans, the person said.
Long-term, the Labor Department is said to be discussing amending its regulations governing QDIAs and how much needs to be disclosed to plan participants.
The investor alert and separate Labor Department guidance are expected to be issued by the end of April. As of now, no timeline has been established for the proposed regulations, the source said.
Gloria Della, a Labor Department spokeswoman, and John Heine, a spokesman for the SEC, both declined to comment.
Jessica Toonkel Marquez is a reporter at InvestmentNews, a sister publication of Pensions & Investments.
