If your DC plan members are after simplicity, a target date fund may seem like a good choice. After all, the member gets a diversified portfolio that adjusts over time, without the member having to take any action.
But not so fast, warns Michelle Peshko, senior advisor, pensions and investments, with Xstrata.
“If your objective fits that, it might be the right thing for you, but don’t just take that as the option,” she says. “It’s not a simple thing here. We really have to understand what we’re trying to accomplish.”
Watch the video to find out what Peshko has to say about target date funds and determining whether they’re right for your plan members.