401(k) Plans: A Sponsor’s Role in Default Investments and an Examination of Target Date Funds


Wesley Meyer (Editor)

Series: Retirement Issues, Plans and Lifestyles
BISAC: BUS050040

Employers who sponsor 401(k) plans report using a range of default investment types to automatically enroll employees in their plans based on each type’s design and other attributes. Department of Labor (DOL) created a regulatory “safe harbor” in 2007 to limit plan sponsor liability for investing contributions on behalf of employees into default investments when employees do not otherwise make an election. In addition, DOL identified three default investments that, if selected by sponsors, would qualify a plan for safe harbor protection. This book examines which options plan sponsors selected as default investments and why; how plan sponsors monitor their default investment selections; and what challenges, if any, plan sponsors report facing when adopting a default investment for their plan. Furthermore, this book determines what is known about the effect of automatic enrollment policies among the nation’s 401(k) plans, and the extent of and future prospect for such policies; and the potential benefits and limitations of automatic IRA proposals and state-assisted retirement savings proposals. (Imprint: Nova)

Table of Contents

Table of Contents


Chapter 1. 401(k) Plans: Clearer Regulations Could Help Plan Sponsors Choose Investments for Participants
United States Government Accountability Office

Chapter 2. Retirement Savings: Automatic Enrollment Shows Promise for Some Workers, but Proposals to Broaden Retirement Savings for Other Workers Could Face Challenges
United States Government Accountability Office

Chapter 3. Defined Contribution Plans: Key Information on Target Date Funds as Default Investments Should Be Provided to Plan Sponsors and Participants
United States Government Accountability Office

Chapter 4. Target Date Retirement Funds – Tips for ERISA Plan Fiduciaries
U.S. Department of Labor, Employee Benefits Security Administration


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