The Labor Department says it will revamp a 2007 regulation to require that employers provide more information to employees about target-date retirement funds used for automatic enrollment in participant-directed retirement plans.
That regulation details the steps employers must take when they automatically enroll employees in DC plans to allow the investment decisions employers make on behalf of employees to be shielded from fiduciary liability.
In its spring regulatory agenda, unveiled Monday, the Labor Department’s Employee Benefits Security Administration said it plans to publish an amendment to the 2007 regulation by August to ensure that the benefits and risks of investing in target-date funds are thoroughly disclosed.
This guidance will “ensure that plan participants are provided with comprehensive information to evaluate target-date or similar funds that have been selected as their plan’s default investment,” the Labor Department said in the regulatory agenda.
The Labor Department also said it will publish guidance this spring to assist employers in evaluating and selecting target-date retirement funds.
Jerry Geisel is editor at large of Business Insurance, a sister publication of Pensions & Investments.