In recent years, target-date funds have significantly changed the investment landscape of defined contribution retirement plans. The primary reason for this success is their unique design, which allows target-date funds to systematically reduce equity exposures over a plan participant’s working life. This helps simplify the asset allocation decision for participants, while helping plan sponsors meet fiduciary and QDIA requirements. Behind that simplicity, however, lie multiple allocation approaches among target-date providers, a lack of standardized practices and a wide dispersion in returns. Plan sponsors increasingly need to become familiar with the major differences among target-date funds in order to match the needs of a plan with the choices available. Voya Investment Management can help plan sponsors better understand the differences among target-date providers and choose a target-date fund that best meets the needs of participants.

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