PLANSPONSOR - November 2011

What types of target-date funds does your DC provider/recordkeeper offer?

Target-date funds composed of funds from one firm (single-manager funds)

Target-date funds from multiple firms (multi-manager funds)

Target-date funds composed of funds from your plan's current fund lineup (customized funds)

Two or more of the above Not sure

All

35.4%

Micro

25.2%

Small

37.5%

Mid

45.2%

Large

49.8%

Mega

46.7%

12.0%

11.2%

14.1%

11.0%

10.9%

9.8%

7.5%

5.2%

8.6%

10.9%

7.6%

8.0%

Single-manager target-date funds are the most cited offering by target-date DC providers. However, many plan sponsors—especially smaller plans—are not sure what types of target-date funds their provider offers.

9.7%

8.8%

13.9%

10.2%

31.2%

46.4%

26.1%

15.3%

16.7%

18.7%

Other

4.1%

3.3%

4.8%

3.6%

4.9%

6.7%

given your employee population, do you believe that your recordkeeper/provider is offering you the most
appropriate target-date funds available?

All
Micro
Small
Mid
Large
Mega

Yes

79.3%

78.5%

80.4%

80.8%

79.2%

73.2%

No

4.7%

4.5%

4.6%

4.7%

4.6%

6.7%

Compared with 2010, plan sponsors are more confident in the target-date funds offered by their recordkeepers.

Not sure

16.0%

16.9%

15.0%

14.5%

16.2%

20.1%

have you considered building a customized target-date series for your plan utilizing your plan’s current fund lineup?

All
Micro
Small
Mid
Large
Mega

Yes

11.8%

5.7%

11.0%

17.3%

21.8%

32.1%

No

77.5%

86.2%

77.2%

70.8%

65.5%

52.7%

Custom target-date solutions are in place or are in consideration by more plans in 2011, particularly among larger plans.

Already in place

10.6%

8.1%

11.8%

12.0%

12.6%

15.2%

When thinking about your target-date fund series, when does each fund reach its lowest equity allocation/
exposure (i.e., the final, unchanging, most conservative allocation)? *

All
Micro
Small
Mid
Large
Mega

10+ years after stated date in fund name 10.4%

6.3%

10.2%

12.9%

16.2%

15.5%

1-10 years after stated date in fund name 15.4%

7.7%

13.5%

22.4%

24.3%

30.4%

At the stated date in the fund name

21.2%

18.1%

21.5%

24.6%

20.7%

27.1%

There remains a great deal of uncertainty among plan sponsors as to when their target-date funds reach their final allocation, with over 50% of all plans “not sure.”